FLASH FRIDAY is a weekly content series looking at the past, present and future of capital markets trading and technology. FLASH FRIDAY is sponsored by Instinet, a Nomura company.
As the tagline states, Flash Friday is about the past, present and future of trading and technology in capital markets.
What can be learned from the past? What patterns recur? What does the past portend about the future?
We try to mine much of the past directly from Traders Magazine’s own archives, which includes a deep reserve of articles, information and people profiles from the 1990s onward. But that means there will be a certain recency bias in Flash Friday – at least to the extent that 20 and 30 years ago can be considered recent.
Naturally, the further back we look, the less information we find, especially as the media landscape wasn’t exactly digital decades ago. But some of the more interesting stories are from way back when, for example, a 1917 “heat holiday” that closed the New York Stock Exchange.
Today we go even further back to draw a remarkable parallel to the current-day stock market, which has been on edge amid conflict in the Middle East and what might come next.
On April 15, 2024, a CNN headline blared “US stocks tumble as investors await Israel’s response to Iran’s attack.” The article led: “US stocks were rocked by hot economic data and worries about an escalation of tensions in the Middle East, with the Dow swinging through 600 points Monday.”
To be sure, the market steadied since then as concerns about all-out war subsided, at least for the near term. But the underlying theme was registered: war anywhere in the world that may hold implications for US involvement means uncertainty, and uncertainty is bad for stocks.
Flash back 127 years – quite possibly the furthest back Flash Friday has ever ventured. According to This Day in Stock Market History, on April 19, 1897, “The Dow Jones Industrial Average closes at its lowest level in history – 38.49. The index was first published by Charles Dow beginning May 26th, 1896 at a level of 40.94. At this time, the index was made up of just 12 industrial stocks.”
The website posted a New York Times front page article from April 19, 1897, which reported: “Wall Street gave attention yesterday to nothing but foreign war news. Quotations were down throughout the list. Stocks most largely traded in declined generally the most, though in a few instances inactive shares dropped exceptionally. Nervousness ruled throughout the day.”
The “foreign war news” concerned the commencement of the 1897 Greco-Turkish War, which was fought between the Kingdom of Greece and the Ottoman Empire. Among other things, the war was notable in that it was the first to be filmed on camera, though the footage has since been lost, according to Wikipedia.
Presumably the stock market soon righted itself, as the 1897 Greco-Turkish War lasted just 32 days. But many more conflicts of all stripes lay ahead, up to and including the 2024 Iran-Israel standoff – all of which continue to hold implications for stock markets.
