NASDAQ

The Nasdaq is an American stock exchange located at One Liberty Plaza in New York City. It is ranked second on the list of stock exchanges by market capitalization of shares traded, behind only the New York Stock Exchange. The exchange platform is owned by Nasdaq, Inc., which also owns the Nasdaq Nordic stock market network and several U.S. stock and options exchanges.

History

1971–2000

Nasdaq" was initially an acronym for the National Association of Securities Dealers Automated Quotations.

It was founded in 1971 by the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA).

On February 8, 1971, the Nasdaq stock market began operations as the world's first electronic stock market. At first, it was merely a "quotation system" and did not provide a way to perform electronic trades. The Nasdaq Stock Market helped lower the bid–ask spread (the difference between the bid price and the ask price of the stock), but was unpopular among brokers as it reduced their profits.

The NASDAQ Stock Market eventually assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading, but there are still many securities traded in this fashion. As late as 1987, the Nasdaq exchange was still commonly referred to as "OTC" in media reports and also in the monthly Stock Guides (stock guides and procedures) issued by Standard & Poor's Corporation.

Over the years, the Nasdaq Stock Market became more of a stock market by adding trade and volume reporting and automated trading systems.

In 1981, Nasdaq traded 37% of the U.S. securities markets' total of 21 billion shares. By 1991, Nasdaq's share had grown to 46%.

In 1998, it was the first stock market in the United States to trade online, using the slogan "the stock market for the next hundred years". The Nasdaq Stock Market attracted many companies during the dot-com bubble.

Its main index is the NASDAQ Composite, which has been published since its inception. The QQQ exchange-traded fund tracks the large-cap NASDAQ-100 index, which was introduced in 1985 alongside the NASDAQ Financial-100 Index, which tracks the largest 100 companies in terms of market capitalization.

In 1992, the Nasdaq Stock Market joined with the London Stock Exchange to form the first intercontinental linkage of capital markets.

In 2000, the National Association of Securities Dealers spun off the Nasdaq Stock Market to form a public company.

2000–present

On March 10, 2000, the NASDAQ Composite stock market index peaked at 5,132.52, but fell to 3,227 by April 17, and, in the following 30 months, fell 78% from its peak.

In a series of sales in 2000 and 2001, FINRA sold its stake in the Nasdaq.

On July 2, 2002, Nasdaq Inc. became a public company via an initial public offering.

In 2006, the status of the Nasdaq Stock Market was changed from a stock market to a licensed national securities exchange.

In 2010, Nasdaq merged with OMX, a leading exchange operator in the Nordic countries, expanded its global footprint, and changed its name to the NASDAQ OMX Group.

To qualify for listing on the exchange, a company must be registered with the United States Securities and Exchange Commission (SEC), must have at least three market makers (financial firms that act as brokers or dealers for specific securities) and must meet minimum requirements for assets, capital, public shares, and shareholders.

In February 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Börse, speculation developed that NASDAQ OMX and Intercontinental Exchange (ICE) could mount a counter-bid of their own for NYSE. NASDAQ OMX could be looking to acquire the American exchange's cash equities business, ICE the derivatives business. At the time, "NYSE Euronext's market value was $9.75 billion. Nasdaq was valued at $5.78 billion, while ICE was valued at $9.45 billion."[1 Late in the month, Nasdaq was reported to be considering asking either ICE or the Chicago Mercantile Exchange to join in what would probably have to be, if it proceeded, an $11–12 billion counterbid.

In December 2005, NASDAQ acquired Instinet for $1.9 billion, retaining the Inet ECN and subsequently selling the agency brokerage business to Silver Lake Partners and Instinet management.

The European Association of Securities Dealers Automatic Quotation System (EASDAQ) was founded as a European equivalent to the Nasdaq Stock Market. It was purchased by NASDAQ in 2001 and became NASDAQ Europe. In 2003, operations were shut down as a result of the burst of the dot-com bubble. In 2007, NASDAQ Europe was revived first as Equiduct, and later that year, it was acquired by Börse Berlin.

On June 18, 2012, Nasdaq OMX became a founding member of the United Nations Sustainable Stock Exchanges Initiative on the eve of the United Nations Conference on Sustainable Development (Rio+20).

In November 2016, chief operating officer Adena Friedman was promoted to chief executive officer, becoming the first woman to run a major exchange in the U.S.

In 2016, Nasdaq earned $272 million in listings-related revenues.

In October 2018, the SEC ruled that the New York Stock Exchange and Nasdaq did not justify the continued price increases when selling market data.

The U.S. stock market and economic recession over the past 50 years

1970S: The 1970s marked a period of economic uncertainty and troubled relations between the United States and certain Middle Eastern countries. The energy crisis of the 1970s was a prelude to a catastrophic economic climate, stagflation, high unemployment and high inflation. However, in a short relief in the long bear market, on November 14, 1972, the average closing price exceeded 1,000 points for the first time, closing at 1,003.16. Between January 1973 and December 1974, the average lost 48% of its value in the 1973-1974 stock market crash, and closed at 577.60 on December 4, 1974. In 1976, the index was repeated several times. To reach 1,000, 1,004.75 at the end of the year. Although the Vietnam War ended in 1975, the 1979 Iranian Revolution created new tensions around Iran. From a performance perspective, the index actually remained unchanged in the 1970s, rising from a level of around 800 to 838, an increase of less than 5%.

1980S The NBER considers a very short recession to have occurred in 1980, followed by a short period of growth and then a deep recession. Unemployment remained relatively elevated in between recessions. The recession began as the Federal Reserve, under Paul Volcker, raised interest rates dramatically to fight the inflation of the 1970s. The early 1980s are sometimes referred to as a "double-dip" or "W-shaped" recession.

The Iranian Revolution sharply increased the price of oil around the world in 1979, causing the 1979 energy crisis. This was caused by the new regime in power in Iran, which exported oil at inconsistent intervals and at a lower volume, forcing prices up. Tight monetary policy in the United States to control inflation led to another recession. The changes were made largely because of inflation carried over from the previous decade because of the 1973 oil crisis and the 1979 energy crisis.

Early 1990S Recession

After the lengthy peacetime expansion of the 1980s, inflation began to increase and the Federal Reserve responded by raising interest rates from 1986 to 1989. This weakened but did not stop growth, but some combination of the subsequent 1990 oil price shock, the debt accumulation of the 1980s, and growing consumer pessimism combined with the weakened economy to produce a brief recession.

Early 2000S Recession

The 1990s were the longest period of economic growth in American history up to that point. The collapse of the speculative dot-com bubble, a fall in business outlays and investments, and the September 11th attacks, brought the decade of growth to an end. Despite these major shocks, the recession was brief and shallow.

Great Recession

The subprime mortgage crisis led to the collapse of the United States housing bubble. Falling housing-related assets contributed to a global financial crisis, even as oil and food prices soared. The crisis led to the failure or collapse of many of the United States' largest financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, and AIG, as well as a crisis in the automobile industry. The government responded with an unprecedented $700 billion bank bailout and $787 billion fiscal stimulus package. The National Bureau of Economic Research declared the end of this recession over a year after the end date. The Dow Jones Industrial Average (Dow) finally reached its lowest point on March 9, 2009.

Covid-19 Recession

The first documented case of COVID-19 emerged in Wuhan, China in November 2019. The government in China first instituted travel restrictions, quarantines and stay-at-home orders. When efforts to contain the virus in China were unsuccessful, other countries instituted similar measures in an attempt to contain and slow the spread of the virus, which prompted many cities to close. The initial outbreak expanded into a global pandemic. The economic effects of the pandemic were severe. More than 24 million people lost jobs in the United States in just three weeks. Official economic impact of the virus is still being determined but the stock market responded negatively to the shock to supply chains, primarily in technology industries.

Conclusion

1)    As the world's largest financial market, the United States gathers the world's top 500 listed companies. About 40% of the world's funds are in the United States. On the one hand, the continuous growth of these companies drives the rise of the stock market. On the other hand, commodities are denominated in U.S. dollars, which has increased the demand for U.S. dollars worldwide. These funds have also entered the stock market, creating a century-old bull market in U.S. stocks.

2)    There will be cyclical bear markets during the long-term bull market in the U.S. stock market, and the appearance of a bear market usually has an harbinger. This has been verified by the two recent financial market crashes. The US financial tsunami occurred in September 2008 when Lehman Brothers went bankrupt. However, in July 2007, some small and medium-sized banks had already experienced a wave of bankruptcy, including New Century Bank. In January 2008, all major American banks suffered huge losses, of which Citibank lost 10 billion in the fourth quarter. In March 2008, Bear Stearns, one of the five largest investment banks, declared bankruptcy. Judging from the recent economic recession caused by the Covid-19 pneumonia, the Covid-19 pneumonia first appeared in Wuhan, China. Although the Chinese government has adopted strong measures, it has not prevented the virus from spreading to the world.

3)    The recovery of the stock market also follows a certain pattern. There is always a process from economic recession to economic recovery. 1.The recovery of the stock market usually requires three conditions to ensure that the economy will recover in the next 3-6 months. The stock market usually represents the future trend of the economy, and it usually has an early effect. 2. The Fed's interest rate must be near zero. During the economic recession, business operations have encountered great difficulties, so reducing borrowing costs is very important for a company, which can make the company's capital turnover and help the company tide over the difficulties. 3. The Federal Reserve repurchases bonds to help companies in difficulty extend loans. In an economic recession, banks usually do not intend to lend funds to risky companies in order to protect themselves. This will lead to a credit crisis and ultimately bankrupt the companies. In this case, the Fed actually acts as a bank.

US dollar trend analysis

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