History of Stock market in Timeline
A stock market, or equity market, is where stocks are bought and sold. Stocks represent ownership in companies. This can include public stock exchanges and private trades, such as equity crowdfunding. Investing in the stock market typically involves a predetermined investment strategy.
October 24, 1929: Black Thursday: The Onset of the Wall Street Crash
October 24, 1929, infamously known as Black Thursday, marked the beginning of the Wall Street Crash. The Dow Jones Industrial Average plummeted dramatically, losing 50% of its value during the crash, ushering in the Great Depression.
1929: Regulation of Margin Requirements
After the Crash of 1929, the Federal Reserve implemented regulation of margin requirements to prevent excessive speculation. This included measures like prohibiting free-riding to stabilize the market.
1929: Stock Market Crash of 1929
In 1929, the stock market experienced a massive crash, which is often referred to as Black Monday and Black Tuesday on October 28-29, 1929. This crash marked the beginning of the Great Depression and had a profound impact on global economies.
1929: Wall Street Crash of 1929
The Wall Street Crash of 1929 marked a devastating collapse in the stock market, leading to the Great Depression and having long-lasting economic and social consequences.
1960: Worker to Beneficiary Ratio at 5:1
In 1960, the worker to beneficiary ratio stood at 5:1, signifying a different economic and social landscape compared to later decades.
1973: Stock Market Crash of 1973-74
The stock market crash of 1973-74, triggered by a combination of factors including an oil crisis and economic instability, resulted in a significant decline in stock prices.
1980: Global Stock Market Capitalization at US\$2.5 Trillion
In 1980, the total market capitalization of all publicly traded stocks worldwide reached US\$2.5 trillion, marking a significant point in financial history.
1986: Paris Bourse Implements CATS Trading System, Embracing Automation
In 1986, the Paris Bourse, now integrated into Euronext, adopted the CATS (Computer Assisted Trading System), marking a pivotal step towards automation. This electronic system transformed the exchange's operations, transitioning from its previous open outcry format.
October 19, 1987: Black Monday Crash
On October 19, 1987, known as Black Monday, a significant stock market crash began in Hong Kong and quickly spread across the globe. This day marked a major event in financial history, signaling a worldwide economic downturn.
1987: Black Monday (1987)
Black Monday, October 19, 1987, witnessed the largest single-day percentage drop in the Dow Jones Industrial Average, causing widespread panic and uncertainty in financial markets.
1987: Black Monday Stock Market Crash Challenges Efficient Market Hypothesis
The "Black Monday" stock market crash of 1987, which saw the Dow Jones Industrial Average plummet by a record 22.6%, challenged the "hard" efficient-market hypothesis. This theory posits that stock prices fully reflect all available information, making such a dramatic drop difficult to explain.
1987: 1987 Market Crash Analysis
The 1987 market crash raised several questions regarding the assumptions of modern economics, such as the theory of rational human conduct and market equilibrium. In response, worldwide trading was temporarily halted, and the SEC introduced new market control measures.
1992: Direct Stock Ownership Rates and Indirect Participation through Retirement Accounts
In 1992, direct stock ownership by individuals in the United States stood at 17.8%, while indirect participation through retirement accounts was at 39.3%. The median value of direct holdings was \$14,778, and \$22,000 for retirement accounts.
2000: Dot-com Bubble Burst
The dot-com bubble, characterized by speculative investments in internet-based companies, burst in 2000, wiping out trillions of dollars in market value and leading to the closure of numerous tech companies.
2003: Fixed Costs and Social Factors Influence Stock Market Participation
A 2003 study by Vissing-Jørgensen highlighted the impact of fixed costs associated with investing, suggesting that even a modest annual cost of \$200 could deter nearly half of U.S. households from participating in the stock market.
October 2007: Start of the Great Recession
October 2007 marked the beginning of the Great Recession, a severe economic downturn that affected global markets. The S&P 500 fell significantly during this period, and the recession lasted until 2009.
2007: Stock Market Participation and Holdings Across Income Groups
In 2007, stock market participation and the value of holdings varied considerably across income levels. The top income decile showed significantly higher participation rates and median values for both direct and indirect stock ownership compared to the bottom quintile.
2007: Shift in Stock Ownership Trends: Direct vs. Indirect Participation
By 2007, direct stock ownership had inched up slightly to 17.9%, with a median value of \$17,000. However, indirect participation through retirement accounts saw a significant increase to 52.6%, with a median value of \$45,000. This difference in growth was attributed to tax incentives favoring indirect investments in the United States.
2008: Impact of the Great Recession on Stock Market Participation
Following the Great Recession of 2008, households in the lower income brackets reduced their stock market participation, both directly and indirectly. In contrast, participation among the highest income group remained relatively stable.
2008: Stock Market Crash of 2008
The 2008 stock market crash, sparked by a housing bubble and subprime mortgage crisis, precipitated a global financial crisis and led to government bailouts and economic recession.
March 2009: Great Recession Ends
By March 2009, the Great Recession began to show signs of ending, with the S&P 500 starting to recover. This period saw significant government intervention to stabilize the financial markets.
2009: Worker to Beneficiary Ratio Shrinks to 3:1
By 2009, the worker to beneficiary ratio had decreased to 3:1, reflecting changes in demographics, retirement patterns, and social safety net programs.
2011: Racial Disparities in Stock Market Participation
In 2011, data revealed significant racial disparities in stock market participation within the United States. White households were notably more likely to participate in the stock market, both directly and indirectly, compared to Black and Hispanic households.
February 2012: Introduction of Circuit Breakers in Canada
In February 2012, the Investment Industry Regulatory Organization of Canada (IIROC) introduced single-stock circuit breakers to help manage trading volatility. This was part of a broader trend towards electronic trading and updated market controls.
2012: Stock Markets' Role in Economic Growth
A 2012 study by Padhi and Naik emphasized the crucial role of stock markets in fostering economic growth. By facilitating the flow of funds from savers to borrowers, stock markets enable industries to grow, ultimately influencing the overall economy.
April 2013: S&P 500 Recovery
In April 2013, the S&P 500 finally recovered to its 2007 levels, marking a significant milestone in the recovery from the Great Recession.
2013: Stock Market Participation and Holding Value Trends Post-Recession
By 2013, the average value of stock holdings across all income groups was \$269,900. While the lower income groups saw a slight decrease in both participation and holding value since 2007, the highest income group experienced a decrease in the mean value of their holdings.
2016: 60 Stock Exchanges Worldwide, with 16 Exceeding US\$1 Trillion Market Cap
As of 2016, there were 60 stock exchanges operating globally. Notably, 16 of these exchanges boasted a market capitalization exceeding US\$1 trillion, collectively accounting for 87% of the global market capitalization. With the exception of the Australian Securities Exchange, these influential exchanges were all based in North America, Europe, or Asia.
February 2020: 2020 Stock Market Crash
In February 2020, the global stock market experienced a major crash due to the outbreak of the COVID-19 pandemic. This crash, lasting until April 7, had significant repercussions on global economies.
2020: Global Stock Market Cap Surges to US\$93.7 Trillion
By the end of 2020, the total market capitalization of all publicly traded stocks worldwide had soared to an impressive US\$93.7 trillion, reflecting substantial growth in the financial markets over the preceding decades.
January 2022: United States Dominates Global Stock Market Share
As of January 2022, the United States emerged as the leader in stock market size, commanding approximately 59.9% of the global share. Japan secured the second position with about 6.2%, followed by the United Kingdom at 3.9%.
2030: Projected Worker to Beneficiary Ratio of 2.2:1
Projections indicate that by 2030, the worker to beneficiary ratio could reach 2.2:1, potentially impacting social security systems and retirement planning.