Stock

exchange
 stock exchange

•The stock exchange also called the stock market or in continental

Europe bourse, is an organized market for selling and purchasing

securities such as shares, stocks, and bonds issuing shares of public

companies that you want to be done with a certain order and planning

are located in this market

Biggest historical stock market falls
• The Crash of 1929

• Black Monday 1987

• The dotcom bubble burst 1997-

2000

• Financial crisis 2008

• COVID-19 crisis
The Crash of 1929
• The Wall Street Crash of 1929, also known as the Great Crash,
was a major American stock market crash that occurred in the
autumn of 1929.

• Most devastating stock market crash in the history of the United

States, when taking into consideration the full extent and
duration of its aftereffects.
The Crash of 1929

• During the decade of the roaring 20s, the US economy grew

incredibly to position itself as the world's leading economy.
Investors became more speculative and saw that the stock
market did not stop rising, so they dedicated themselves to
buying shares.

• The stock market grew much faster than the economy, thus
creating a bubble, which would crash on October 24, popularly
known as Black Thursday, the Dow Jones collapsed.
The Crash of 1929
• The bear market lasted for 989 sessions, bottoming out in
January 1932 with a cumulative decline of 86%. During this
stock market crash we found two days in the TOP5 of daily falls
of the Dow Jones. After the previously mentioned black
Thursday, October 24, the following two falls of the TOP5
followed one another, the black Monday of October 28 with -
12.82% (position 3) and the black Tuesday of October 29 with -
11' 73% (position 4)
Black Monday 1987
• Inflation was high and the United States was suffering from oil
supply problems. What started in Hong Kong went all over the
world until it reached the largest market.

• There are no clear causes of this crash, although the cocktail of

the rise in crude oil and raw materials, together with the
depreciation of the dollar, were what led to a situation
characterized by volatility.
Black Monday 1987
• A fall of 508 points, with a percentage in a single session of
22.61% are the visible faces of Black Monday, October 19,
1987. Investors rushed to sell, and the New York market lost
the gains it had had accumulated over the years. The session
on Monday, October 19, was the consequence of a previous
one, also bad, in which the devaluation of the dollar was in the
air.
Black Monday 1987
So, the Dow Jones had the
biggest fall in its history in
one day, TOP1, on Monday
19th October 1987 with -
22.61% and it infected the
big world stock exchanges,
London, Frankfurt, Hong
Kong... The bear market
only lasted 5 sessions and
accumulated a decline of
28.5%.
 The dotcom bubble burst
• Between 1997 and 2000, there was strong stock market growth in
technology companies' shares, particularly those related to the
Internet. So a bubble was generated in very specific stock market
assets, thanks to narratives that preached that these companies
were the new economy.

• Over time, many of these companies went bankrupt or ceased to

exist, and they all fell on hard times. Then companies such as
Amazon, Google or Microsoft consolidated.
The dotcom bubble burst
In March 2000, the downturn
began, which greatly affected
the NASDAQ, which
depreciated by 78% in
October. It was clear that fear
took its toll on investors as
they saw declines, which
triggered a "pullback" effect.
Financial Crisis 2008
• In the 2000s, the US real estate market experienced
tremendous growth and a real estate bubble was generated.
Extreme credit facilities were given to finance the purchase of
such assets, even to people without resources (subprime
mortgages).

• In 2006, the US housing market collapsed, creating a chain

reaction through a banking/financial crisis, which then spread
rapidly throughout the economy, leading to the global financial
crisis of 2008. The stock market crash began in September of
the same year with the bankruptcy of Lehman Brothers.
Financial Crisis 2008
• But unbelievably no daily fall is in the TOP5 of the Dow Jones.
This bear market lasted 517 sessions, bottoming in March
2009.
COVID-19 Crisis
• To stop the pandemic, exceptional quarantine measures have had to be
taken, stopping the economy, which the stock markets have been quick
to reflect.

• This has become a historic decline and in 26 days the Dow Jones
accumulated a fall of almost 30%. Specifically, in two of those days
there have been falls that enter the TOP 5 in the history of the index: a
fall of 12.93% and another with a fall of 9.99%.
COVID-19 Crisis
• Obviously it has not fallen as much as on the other two
occasions given the short time that has passed and the scale of
these crises, which are probably the two biggest in history (for
the moment), but the aggressiveness of the speed with which it
is doing so on this occasion is impressive.
TOP 5 daily falls of the Dow Jones

CRISIS Daily fall

Black Monday, 19 October 1987 -22´61%

COVID-19, 16/03/2020 -12´93%

Crash of 29, 28/10/1929 -12´82

Crash of 29, 29/10/1929 -11´73%

COVID-19, 12/03/2020 -9´99%

Types
EQUITIES

• Dividends and capital gains

• Limited liability to creditors
• Claim on assets in bankruptcy cases
• Vote and preference in the future actions of the business
EQUITIES II
DOW JONES SECTOR
BREAKDOWN 2022
Ranking of the
companies with
the largest
market
capitalisation in
Spain (IBEX 35)
in September
2022
DEBT SECURITIES

➔ Low risk
➔ Little speculation
➔ The longer term, the greater the gain
➔ Strong liquidity
➔ Guarantee of solvency, transparency and prestige (for a
company)
Public Debt Securities
Consequences of public debt

Public spending

Fiscal policy

Private Sector
Other securities

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