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: 16,990,102
4. Last Trade: 8.45
5. Change: +0.62
(+7.92%)
6. Day's Range: 8.01-
8.50
Now 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