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
1. Starbucks Corp. 2. (SBUX) 3. Volume: 16,990,1024. Last Trade: 8.455. Change: +0.62
(+7.92%)6. Day's Range: 8.01-
8.50Now you get to pick your
own stocks!
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