Understanding the Stock Market

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Presentation transcript:

Understanding the Stock Market 11.6.1 Describe the monetary issues of the late nineteenth and early twentieth centuries that gave rise to the establishment of the Federal Reserve and the weaknesses in key sectors of the economy in the late 1920s.

Important Terms Stock Market/Stocks—384 Buying on a Margin—384 Interest—385 Speculator—385 and US Glossary The Federal Reserve—237 Tariff—US Glossary and 388 Bull Market/Bear Market—384-385

New York Stock Exchange

Inside the NY Stock Exchange

History of the New York Stock Exchange 1792—formed by 24 stock brokers who took an oath on Wall street 1867—first stock ticker 1914—shuts down for 4 months due to World War I 1929—Black Tuesday, October 29th

Reading a stock market table Starbucks Corp. (SBUX) Volume: 16,990,102 Last Trade: 8.45 Change: +0.62 (+7.92%) Day's Range: 8.01- 8.50 Now you get to pick your own stocks! P/E ratio—lower is better!

The Federal Reserve System Created in 1913 12 regions—each with Federal Reserve Bank Provide safety net for banks Regulates money in circulation Sets interest rates

Hidden Economic Problems in the 1920s Americans buy goods on credit Debt (1921-1929: personal debt doubles from 3.1 billion to 6.9 billion) Americans buy stock! Buying on Margin Overproduction Underconsumption

Dow Jones Industrial Average Today

Comparing the Great Depression to Today

Opening Bell