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- The Week Ahead: Big Earnings Week
Hi Everyone 👋,
Welcome to our Sunday newsletter! Here’s what we’re discussing this week:
GRIT’s BIG News of the Week:
Hottest News This Week 👉 TRUMP
Matt Allen’s Corner 👉 TULIP MANIA
Comin’ Up 👉 EARNINGS AND ECONOMIC DATA
1. Hottest News This Week
📣 Donald Trump Shot
Former President Donald Trump has been released from the hospital following an assassination attempt at a rally in Pennsylvania. On Saturday, Secret Service rushed Trump off the stage after shots grazed his ear. The FBI identified the shooter as 20-year-old Thomas Matthew Crooks from Pennsylvania, who was killed by law enforcement. One attendee died, and two others are in critical condition.
📣 Powell Speaks
Federal Reserve Chair Jerome Powell will join a "fireside chat" with the Economic Club of Washington, D.C., on Monday. This event allows him to elaborate on last week's message to Congress about closely monitoring the labor market as inflation decreases.
📣 Amazon Prime Day
Tuesday and Wednesday mark the 10th year of Amazon Prime Day. Last year, Amazon achieved its highest single-day sales ever on the event's opening day. The e-commerce giant's summer sales event promises significant deals and discounts for shoppers.
2. Matt Allen’s Corner
Tulip Mania
Tulip Mania is often cited as one of the earliest recorded speculative bubbles in history, a fascinating episode that took place in the Dutch Golden Age during the early 17th century. This remarkable event revolves around the unexpected and dramatic rise and fall of tulip prices, offering timeless lessons about the nature of markets and human psychology.
The Blooming Market
In the early 1600s, the Netherlands was one of the wealthiest and most sophisticated economies in Europe. Among the many luxuries enjoyed by the Dutch elite were tulips, which had been recently introduced from the Ottoman Empire. Tulips quickly became a status symbol, admired for their beauty and rarity.
The fascination with tulips grew, and by the 1630s, the trade of tulip bulbs had become a booming market. The most sought-after varieties, such as the rare “Semper Augustus,” were prized for their unique and vivid colors. Speculators began to enter the market, buying and selling tulip bulbs with the expectation that prices would continue to rise. Tulip bulbs were traded on exchanges and even changed hands multiple times in a single day, much like modern stocks.
The Peak of the Frenzy
By the winter of 1636-1637, the frenzy had reached its peak. Tulip prices skyrocketed to extraordinary levels, with some bulbs selling for the equivalent of a skilled craftsman's annual salary. Ordinary citizens, not just wealthy traders, began to invest heavily in tulips, often leveraging their homes and savings to do so. The market was driven by a speculative fever, with buyers convinced that they could sell the bulbs at even higher prices.
Source: Linkedin
The Collapse
However, like all speculative bubbles, Tulip Mania was unsustainable. In February 1637, the market suddenly crashed. Buyers vanished, and tulip prices plummeted almost overnight. Bulbs that had sold for thousands of guilders became practically worthless. Panic ensued as people realized that the astronomical prices had no basis in reality.
The collapse left many investors, from wealthy merchants to common artisans, in financial ruin. Contracts for the purchase of tulips were often not honored, leading to widespread legal disputes and financial instability. The economic impact was significant, although it did not lead to a long-term downturn in the Dutch economy.
The story of Tulip Mania is a fascinating chapter in financial history, serving as a cautionary tale about the perils of speculative bubbles.
Cheers,
Matt Allen
3. Comin’ Up
EARNINGS AND ECONOMIC DATA
💰 Earnings:
Monday: Goldman Sachs, BlackRock
Tuesday: UnitedHealth, Bank of America, Morgan Stanley, Charles Schwab
Wednesday: Johnson & Johnson
Thursday: Taiwan Semiconductor, Netflix
Friday: American Express
📈 Major Economic Events:
Monday: Fed Chair Powell speaks
Tuesday: U.S. retail sales
Wednesday: Housing starts
Thursday: Initial jobless claims
Friday: N/A
Will Netflix Beat Earnings? |
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Warren Buffett
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