This week in trading history sees the birth of Ray Kroc, the business visionary who made McDonald's what it is today. There's also the Great Chicago Fire, and the Dow and NASDAQ take some rather big hits across history...
Ray Kroc was born on this day. Kroc started his career as an ambulance driver in World War I at the age of 15. He also worked in real estate, played Jazz music and sold paper cups. In the 1940s he entered the blender industry and sold a machine called the “multimixer”. During a sales trip he visited a restaurant that prepared food using an assembly-line system. Kroc sat down with the owners of the restaurant to work out a deal to franchise their restaurant. In 1955, Kroc opened the second restaurant in Illinois and by the end of the year had opened two more. In 1961 he bought out the original owners of the restaurant. By 1984 when Kroc died, he had opened 7,500 McDonalds restaurants all over the world and had a net worth of $600m.
Apple co-founder, Steve Jobs, died on this day after a long battle with pancreatic cancer.
A report by the UN-Habitat was published revealing that 3.5 billion, or 31.6%, of the world’s population was living in slum conditions. The highest percentage of those living in slums with no fresh water or sanitation was in Sub-Saharan Africa. In 2016 the UN-Habitat published a new report stating that in the world, one in eight people live in slums and although from 2000-2014 the percentage of people living in slums had dropped from 39%-30%, numbers continue to grow and the slum challenge remains critical.
Henry Ford needed to find a way to make his automobiles more affordable for the everyday American, so he took notes from the “father of scientific management” Frederick Taylor. Ford created the assembly line that reduced the time of manufacture from 12 hours to 93 minutes and so reducing the cost of the car.
The Great Chicago Fire began in the southwest, possibly starting in a barn owned by the O'Leary family. The flames raged for more than 24 hours and wiped out one-third of the city. Around 250 people were killed, 98,500 were left homeless and 17,450 buildings were destroyed.
The NASDAQ reached bottom from the tech bubble collapse. The day closed at 1,114.11 which was 78% down from its high of January 2000. It wouldn’t be until April 2015 when they finally closed above their peak level. The Dow also reached its bottom of the tech bubble on this day and was 37% down from its highs.
The Dow reached its pre-financial crisis peak of 14,164.53 on this day but, over the next year and half the index fell 57%.
Exactly a year from the Dow’s highs, the index had one of its worst days during the financial crisis and dropped 7.33%. This was one day in a 7-day stretch of drops that became the worst week in stock market history.
The Dow dropped 9.69 points, 2.15%, the largest drop since Eisenhower’s heart attack in 1955. The drop was suspected to be caused by the launching of Sputnik on the 4th October.
At this time, the Dow experienced the most volatile day in history, swinging 1019 points. This brought an end to its worst week in its history. At the lows on this day, the market was down nearly 25% for the week.
The Dow closed above 1000 for the first time in nearly a decade due to the effects of the 1973-1974 recession.
The S&P 500 reached an intra-day high of 1,579.09 and was the peak of the market before the great recession. Stocks fell more than 50% in the next 12 months.