Understanding the Stock Market

1. 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.

2. 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

3. New York Stock Exchange

4. Inside the NY Stock Exchange

5. 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

6. 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!

7. 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

9. 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

10. Dow Jones Industrial Average Today

11. Comparing the Great Depression to Today

12. Opening Bell