Quote from stockstr on September 6, 2023, 1:35 AM

The New York Stock Exchange is where icons and disruptors come to build on their success and shape the future. We’ve created the world’s largest and most trusted equities exchange, the leading ETF exchange, and the world’s most deterministic trading technology. Our data, technology, and expertise help today’s leaders and tomorrow’s visionaries capitalize on opportunities in the public markets.

The original Buttonwood Agreement was signed on May 17, 1792.

The New York Stock Exchange traces its origins to the Buttonwood Agreement signed by 24 stockbrokers on May 17, 1792, as a response to the first financial panic in the young nation. It set rules for how stocks could be traded and established set commissions. The Agreement aimed to promote public confidence in the markets and to ensure that deals were conducted between trusted parties.

Though the Buttonwood Agreement marks the official founding of the NYSE, the Exchange traces its roots back to the 1600s and the foundation of the U.S. Capital Markets. In 1624, the Dutch founded New Amsterdam on the southern end of Manhattan and built a stockade from which the street derives its name; running east from what is now Broadway downhill to the East River.

The Compromise of 1790 cemented Wall Street’s role as the nation’s financial capital. The agreement allowed Alexander Hamilton, the United States’ first Secretary of the Treasury, to implement his fiscal policy of paying Revolutionary War debt using federally issued bonds. Hamilton’s economic and financial vision included the federal assumption of the debt from the Revolutionary War, the creation of a central bank, and support for indigenous manufacturing. Together, these laid the framework for a strong economy that unleashed free enterprise, entrepreneurship, and credit that enabled markets and private institutions like the NYSE to flourish.

In the Exchange’s early years, stock trading continued on an informal basis in nearby coffeehouses where merchants typically gathered. By 1817, the stock market was active enough to encourage brokers to create a formal organization. A constitution was adopted on March 8, 1817, creating the New York Stock & Exchange Board, the forerunner of today’s NYSE. From the beginning, regulations governed trading. The constitution spelled out detailed rules for the transaction of business and imposed fines to keep disorderly brokers in check.

The new stock exchange rented a room at 40 Wall Street where the brokers gathered twice a day to trade a list of 30 stocks and bonds. From the podium, the president called out the name of each security in turn, while the brokers shouted bids and offers from the chairs assigned to them. This was the origin of the term “seat” which, ever since, has signified a membership on the NYSE.

The number and variety of securities traded at the NYSE steadily increased as America grew. States and municipalities issued bonds to finance the construction of turnpikes, canals, and bridges. Banks, insurance companies, and railroads issued stock to raise the necessary capital to develop and expand. By the end of the Civil War, more than 300 different stocks and bonds were traded at the NYSE. The Exchange moved into its first permanent home – on a portion of its present Broad Street site – in 1865.

Just a few years later, increasing trading volumes inspired the NYSE to switch from the old method of trading to a new system of simultaneous trading in all stocks in a continuous market. Stocks were assigned to specific locations – trading posts – and brokers abandoned their seats to roam about the large open trading floor to trade directly with one another in whatever stock they chose.

NYSE Trading Floor, 1881 with annunciator board pictured left.

The introduction of the stock ticker in 1867 revolutionized market communications by making it possible to quickly transmit market information across the United States, significantly narrowing the gap between Wall Street and Main Street. When telephones were installed at the NYSE in 1878, the market became even more efficient, and on December 15, 1886, trading volume topped 1 million shares for the first time.

One of the most familiar images of the NYSE, the loud ringing of a bell signaling the opening or closing of the day’s trading, was first used at the Exchange in the 1870s with the advent of continuous trading. Critical to ensuring the orderly functioning of the marketplace, the original bell of choice was a Chinese gong.

As the stock market continued to grow, the NYSE in 1903 moved into a new building with a much larger Trading Floor, designed by George B. Post. Post designed an impressive interior space, with paneled Georgian marble walls, huge windows, and a gilded ceiling that stands four stories above traders’ heads. The statuary pediment titled, “Integrity Protecting the Works of Man” was designed by the eminent sculptor, John Quincy Adams Ward. Today, the NYSE building is one of the most exclusive and sought-after event spaces in New York City, poised at the center of global financial markets.

NYSE facade in 1903.

When the current NYSE building opened in 1903, the gong was replaced by a brass bell — electrically operated and large enough to resonate throughout the voluminous main trading floor. Today, each of the four trading areas of the NYSE has its bell, operated synchronously from a single control panel.

Modulating the temperature of the open-air space stretching nearly 100 feet above the Trading Floor required the services of engineer Alfred Wolff. Wolff designed and installed three ammonia-absorption machines, each with a cooling capability equivalent to one hundred and fifty tons of ice. This industrial feat made the NYSE the first air-conditioned building in North America. In addition, the room had some of the newest trading technologies including modern tickers, telephones, and a pneumatic tube system to send orders and market data throughout the building.

Trading Floor and office space was expanded further in 1922 with the construction of the 11 Wall Street addition. The trading posts, dotted through the center of the room began as simple signposts but expanded over time. The NYSE also held its inaugural Christmas Tree Lighting, a Wall Street community event that has been celebrated annually, since 1923. In 1928, the Quotation Department was developed to provide the most recent stock quotations to member firms. Uniformed clerks wearing headsets were in continuous contact with the trading floor and posted the current bid and asked for quotes on the board above the seated telephone operators. Around 35,000 stock quotations were furnished daily in 1931. An automated quotation system replaced the department in 1960.

1929 Stock market “crash.”

On Tuesday, October 24, 1929, the market “crashed.” Prices plummeted as brokers sold their customers’ stocks to cover losses when investors could not meet the calls for more margin. Over 16,000,000 shares were traded, a record that would not be surpassed for 39 years. The crash focused attention on the securities industry and led to several important reforms. To supplement the NYSE’s self-regulatory activities, the U.S. Congress in 1934 created the Securities and Exchange Commission to regulate the operation of the nation’s securities markets.

In the 1930s, new trading posts were installed that allowed market makers to stand outside the posts and coordinate the trading of multiple stocks at each location. Initially, a group of clerks, tube men, and runners would work inside the horseshoe transmitting orders and recording stock quotes and sales.

The market languished during World War II and encouraged investing in victory through the purchase of bonds via the war loan of the United States. Due to a shortage of male employees, women worked as pages and reporters on the trading floor for the first time in the Exchange’s history. The market recovered its vitality in the post-war years. The NYSE’s educational efforts to acquaint potential investors with the long-term benefits of owning “Your share of American business” broadened stock ownership considerably during the 1950s and 1960s.

Although the appearance of the Trading Floor seemed unchanged from the 1930s, automation systems installed in other parts of the building began to assist traders during the 1950s. The introduction of technology over the next decade enabled the rate of trading to increase substantially from just over a billion shares traded in 1960 to over three billion in 1970. The first computers made by IBM (NYSE: IBM) were installed at the NYSE. During the 1960s, computer data processing technologies were first applied to the NYSE’s market operations. Electronic capture of trading data and dissemination of market information via high-speed data networks greatly increased market efficiency. In the following decade, the NYSE launched its SuperDot system which electronically delivered an order from the broker’s office directly to the NYSE trading post and then sent an execution report back within seconds.

The first permanent female member, Muriel Sibert in 1967.

The technological advancements of the Trading Floor from the 1960s-1970s were met by its diversification. The first permanent female member, Muriel Sibert was inaugurated on December 28, 1967. Siebert’s entry to the Floor was followed by the first Black member, Joseph L. Searles III, on February 12, 1970, the first Black member firm, Daniels & Bell Inc, in 1971, and the first Black female member, Gail Pankey in 1985.

In the 1970s, computer display monitors showing current market data were added atop the old trading posts in a transitional program to modernize trading floor technology. The floor underwent its first major renovation in five decades starting in 1979 to incorporate the latest technologies to the trading posts. The space frame that is still visible was added above the floor, distributed power, data cables as well as air conditioning, and supported the trading post superstructure.

Construction on the New York Futures Exchange Trading Floor also began in 1979. NYSE Futures became the most modern futures trading environment of its time. Simulated trading sessions were conducted before the opening of the New York Futures Exchange in the Spring of 1980. At the time of its opening, the New York Futures Exchange had 1,569 members, making it the largest membership of any financial future exchange in the nation.

Other milestones include February 8, 1980, when the market capitalization of NYSE-listed topped $1 trillion. On October 19, 1987, “Black Monday,” the market had one of its most dramatic falls in history. The Dow Jones Industrial Average plunged 508 points, losing a record 22 percent of its value, on a volume of 604 million shares. In the following months, the NYSE introduced nearly 30 changes aimed at dampening price volatility, streamlining procedures, and bolstering the capacity of NYSE electronic systems to handle sustained trading in hundreds of millions of shares.

Ronald Reagan visited the floor of the NYSE in 1985.

Trading floor facilities were re-engineered during the 1980s and 1990s to streamline market processes and keep ahead of the NYSE’s mounting trading volumes. The first handhelds were introduced on the Trading Floor in 1992. Technology improvements in 1995 included adding flat panel data display screens on the trading posts. This was the country’s first large-scale use of this new technology. By 1996, the Epson Handheld Computer allowed brokers to access the NYSE Wireless Data System that was introduced. This emerging technology allowed increased volume leading to the first one billion share day on October 28, 1997.

In 2005, NYSE Hybrid Market was launched, creating a unique blend of floor-based auction and electronic trading, a “high tech, high touch” model. Major advances occurred in market data display and handheld technology, leading to the elimination of the open outcry system on the floor, in 2006, when the NYSE merged with Arca, short for Archipelago Exchange, the first all-electronic exchange in the U.S. on which stocks and options are traded.

In the early 2000s, changes occurred across the NYSE. On November 16, 2005, Intercontinental Exchange (NYSE: ICE) was listed on the NYSE. In 2006, the New York Stock Exchange (NYSE), Archipelago (Arca), and the Pacific Exchange (PCX) merged to form the publicly traded NYSE Group, ending membership ownership of the Exchange. In 2008, the NYSE acquired the American Stock Exchange, becoming the third-largest U.S. options market. By 2013,remains the parent organization of the Exchange today.

ICE listing on NYSE in 2005.

The current floor began to take shape in 2011 with the addition of new broker booths that offer enhanced functionality to floor broker firms and new trading posts that feature high-definition data display screens and the most current workstations. A host of new systems, such as the electronic Specialist Display Book, Broker Booth Support System (BBSS), and wireless e-Broker System, provide powerful tools to the NYSE broker.

In 2016, Phase 1 Pillar, a new integrated trading technology platform to enable member firms to connect to all NYSE equities and options markets using a standard protocol and improve efficiency and reduce complexity for customers, while enhancing consistency, performance, and resiliency, was completed. By 2019, the NYSE marked the successful migration of its trading technology to the NYSE Pillar. To date, NYSE, NYSE American Equities, NYSE Arca Equities, NYSE Chicago, and NYSE National have been migrated to NYSE Pillar matching engines, and NYSE Pillar Gateways are available for order entry on each market.

Sample of Stock Analysis

AI has surged in popularity throughout 2023 and has gripped the imagination of the markets. Unlike many of the exciting new horizons that have emerged over recent years, from NFTs to the metaverse, companies are already finding game-changing applications using AI that are influencing the world today, and it is a market already worth hundreds of billions of dollars.

With that in mind, Joshua Warner, market analyst for City Index has revealed the most exciting AI stocks to watch, as part of their AI stock index.

Highlights from the research:

• NVIDIA is one of the major players already reaping significant financial rewards from AI.
• Palantir has promise, but stock prices will need to stabilise.
• Investors have bought into C3.ai’s story, but it is yet to convince Wall Street.
• IonQ has a bright future, but markets have got ahead of themselves.

The best AI stocks to watch

NVIDIA is the leading provider of chips that are needed for data centres to run powerful AI and machine-learning applications, and it is the poster child of the AI world after earning a $1 trillion valuation this year. Palantir’s software solutions help government and financial firms better understand data, they are now pivoting these systems towards AI models so that they can be continually improved, which has caught the attention of the stock market.

Unlike Palantir, C3.ai has seen the potential in the AI market long before it became a reality this year. They provide over 40 AI software solutions, from tools that can analyse banking transactions to a Customer Relationship Management system. Quantum computer manufacturer IonQ is a small player in the market but has recently quadrupled in value. Their most recent IonQ Forte quantum computer utilises cloud services, carving a niche in an AI-focused industry.

1. NVIDIA

Joshua Warner, market analyst for City Index has said:

“NVIDIA’s shares have been undergoing a correction since peaking at all-time highs in July. We have seen the stock set lower highs since then to suggest we could be seeing a reversal, although the 7-week low hit a few days ago remained above the trough we saw in June.”

“A slip below $401 would mark a new lower-low, making this a key price to watch that could signal a reversal in fortunes. We can see buyers have happily returned to the market when the price has fallen from $401 to $406, having rejected a selloff below here on seven consecutive occasions in the last two months alone. Notably, we could see a potential head and shoulders pattern form if it sinks back toward this level, although it is too early to tell.”

2. Palantir

Joshua has said:

“Palantir hopes to pivot its data-driven systems toward enhancing and accelerating existing AI models. Its shares have been undergoing their sharpest correction in over a year since hitting a 19-month high at the start of August, following the unsustainable rally we saw begin in early May.

“We can see that sellers have struggled to push the price below $15 without prompting buyers into action, suggesting this is currently providing support. It has slipped to as low as $14.60, but any move below here could trigger a sharper fall that could initially take it down to the June low of $13.60.”

“The stock will need to regain significant ground if it wants to set new highs and get back on the right path after the 19-month high of $20 proved to be too irresistible for sellers, which appear to have been gradually accepting lower prices throughout this month. The rise in volumes during the recent correction suggests a lot of selling pressure was relieved considering we have seen the price stabilise since volumes have fallen back to more normal levels.”

3. C3.ai

Joshua has added:

“We saw C3.ai shares break the rally that saw it more than quadruple in value after it hit a 20-month high back in June, having set a lower high at the start of this month.

 

“We are now waiting to see whether it sets a lower low compared to the trough in June of $31.69. Interestingly, we saw a fierce battle between buyers and sellers last week (16th August) and neither side could gain the upper hand as the stock closed at the same price it opened ($31.69), which is also aligned with the 100-day moving average. This suggests strong demand on both sides at this level, although there have been reduced trading volumes over the past two months. A close below here could trigger a sharper decline, potentially toward $28.50 or possibly toward $25 if it comes under severe pressure.

 

“On the upside, a return above $37 will reclaim the floor held throughout July. It would then need to break $42.50 and then surpass the last high of $44 to show the bulls are back in charge.”

4. IonQ

Joshua said:

“IonQ’s shares almost quadrupled in value between the end of March and the 20-month high hit at the start of August. It has since undergone a steep correction, setting lower lows and lower highs to suggest a reversal could be on the cards as markets temper their lofty expectations.

“The stock is currently testing the 50-day moving average for the first time in over three months. It could continue to fall toward a range of $13.50 to $12.50, which was as low as sellers could push the price in July. Below here, we could see it slip back toward the ceiling of $11 that held throughout May and the majority of June.

“The stock would need to set a higher high and move back above $16.50 in order to show that buyers are back in control before the 20-month peak comes back into the crosshairs.”

Joshua Warner, market analyst for City Index, outlines what you should consider when trading AI stocks

Do:

“Research Thoroughly: Study a company's technology, market presence, and financial health before investing, so you know what you’re getting yourself into.

Diversify: Although trading individual AI stocks can provide better returns, it’s recommended that you don’t solely focus on one stock. Trading a basket of AI stocks requires less research and is less risky than trading individual stocks.

Focus on Innovation: Prioritise companies with genuine technological advancements.

Stay Informed: Keep up with AI developments, breakthroughs, and regulatory changes as well as broader economic trends, so you’re better informed.

 

Don't: 

Chase Hype: Avoid investing solely based on popularity; actual value matters more.

Ignore Ethics: Be cautious of companies with questionable AI practices or reputations.

Put All Your Eggs in One Basket: Avoid concentrating your investments on a single AI stock.

Neglect Due Diligence: Don't skip researching a company's fundamentals and competitive landscape.

Overlook Regulations: Be mindful of how regulations can impact AI companies.

Disregard Economic Factors: Consider how broader economic conditions can affect the AI sector.”