The history of US and Hong Kong stocks

The U.S. -Hong Kong stock index refers to the stock markets of the United States and Hong Kong. The two stock markets have different historical and developmental backgrounds.
The U.S. stock market, one of the largest in the world, traces its origins to Wall Street in the late 18th century. The U.S. stock market includes Nasdaq and the New York Stock Exchange (NYSE), as well as a number of other stock exchanges. It has attracted many domestic and foreign investors, provided a wide range of investment opportunities, and provided a channel for capital financing for a large number of companies.
Phase I: late 17th to early 19th century
1790 The Philadelphia Stock Exchange, the first stock exchange in the United States, was established, the official start of the American capital market. The Philadelphia Stock Exchange dates back to 1754.
In 1754, more than 200 merchants invested 348 pounds to establish a coffee house, which became the center of Philadelphia at that time. Later, a city tavern replaced the coffee-house as the commercial center of Philadelphia, later renamed the Merchant's Coffee-House, the precursor to the exchange.
1790 The Philadelphia Stock Exchange was founded. At first, the U.S. stock market mainly traded Treasury bonds, state bonds, and stocks of bank and insurance companies.
First Bank of America's $10 million IPO, the U.S. stock market ushered in investment. The boom in the securities market has brought more business to securities brokers. The Agreement between 24 New York stock brokers on May 17, 1792, under a Buttonwood tree outside 68 Wall Street, is known as the Buttonwood Agreement, and is considered the origin of the New York Stock Exchange's regulations. The Buttwood Agreement provided for a fixed commission system, essentially to avoid a price war among brokers. This fixed system continued for 183 years until the introduction of the Securities Act Amendment of 1975. Twenty-five years after the Buttonwood Agreement, the New York Stock Exchange was established, marking the completion of a more formal securities market system in New York and Wall Street.
Stage 2: Early 19th century to 1930s
In 1825, the first bull market in the United States stock market was ushered in, which further promoted the development of stock markets in New York and other places.
In the 1830s, New York became the largest stock exchange in the United States, and local markets such as Philadelphia and Boston were able to maintain considerable independence due to the limitations of instant messaging.
In the 1850s, the invention and development of the telegraph helped the price information of the New York stock exchange to be transmitted to other markets in a short time, and New York's position as the center of the American stock market began to be gradually established.
After the end of World War I, the American economy entered a fast era, and the booming economy naturally pushed up the stock market. With the gradual slowdown of economic growth, the stock market bubble became increasingly serious, a large number of leverage trading, credit trading crazy speculation eventually collapsed, the US economy fell into the Great Depression. The rampant speculation in the stock market, which further deteriorated the economy, made the government realize the importance of supervision of the financial industry. In the following decades, the US financial regulatory system was constantly improved and upgraded, forming a dual-track banking system and a dual-track financial regulatory model with American characteristics. Different financial entities, businesses and products correspond to different regulatory agencies, and different levels of government (federal/state) have different regulatory agencies. This regulatory framework evolved through a series of reforms represented by the Banking Act of 1933 (Glass-Steagall Act), the Financial Services Modernization Act of 1999, and the Dodd-Frank Act of 2010.
Stage 3: After the Great Depression
The stock market bottomed out in mid-1932 and continued to rise until early 1932, gaining 324%.
Between 1937 and 1942, the United States experienced the longest bear market in history. In the meantime, in 1939, World War II broke out.
In early June 1942, the Battle of Midway broke out, and the United States gained the initiative in the Pacific theater at one stroke. This battle also became the turning point in the Pacific theater of World War II.
At the same time, as the U.S. Navy took the initiative in the Pacific theater, the fog of war cleared, and the four-year bull market in U.S. stocks officially began. After 83 years, government regulation was relaxed and enterprises were revitalized. With the effect of earlier economic reforms gradually appearing, the US economy entered a new period of development. In March 2000, due to the Nasdaq bubble, the US stock index, especially Nasdaq, fell sharply, which also brought the bear market of the US stock market from 2000 to 2002. By September 2000, the Dow index and S&P 500 basically reached the pre-fall level, while the Nasdaq index did not really bottom out until October 2002.
The risks of continued leverage in financial property are finally coming to light as the US enters a cycle of interest rate rises. As the mortgage interest rate rises, home buyers are unable to pay the loan, and the mortgage default rate continues to rise, leading to an increase in the default of the mortgage portfolio with the mortgage as the bottom. After the capital chain breaks, the subprime mortgage lending institutions begin to go bankrupt, and the investment funds are forced to close down. The gradual spread and expansion of the crisis leads to insufficient liquidity in the major financial markets around the world. It eventually evolved into a systemic financial crisis on a global scale.
As a result, the U.S. stock market suffered the third-biggest decline in history, after the Great Depression and World War II. In September 2008, the financial crisis began to spiral out of control and led to the failure or government takeover of a number of sizable financial institutions, triggering a recession. On Sunday, September 14, Lehman Brothers filed for bankruptcy after the Federal Reserve refused to provide financial support, while Merrill Lynch announced its acquisition by Bank of America on the same day. These two events marked the beginning of the great global stock market crash of September 2008 the following week, which took place on Monday, September 15, and Wednesday, September 17. This round of US stock market crash began in late October 2007 and ended in late March 2009, lasting one year and three months. In the second half of 2009, the U.S. economy began to recover after nearly a year and a half of recession, and the stock market subsequently emerged from a decade-long bull market. The bull market has been driven by two main factors: a surge in buybacks and earnings growth.
After the financial crisis, technology companies in the US stock market have made great progress and gradually become an important driving force, leading the wave of technology stocks and boosting the super bull market of the US stock market for nearly a decade. All that was interrupted in 2020 by the COVID-19 pandemic.

The Hong Kong stock market also has a long history, with origins dating back to the 19th century. As an international financial center, Hong Kong has always played an important role in connecting Eastern and Western markets. The main stock exchange in Hong Kong is the Stock Exchange of Hong Kong (HKEx), and many domestic and foreign companies choose to list in Hong Kong to access a broader investor base and capital flows.
Phase I: Late 18th and early 19th centuries
The establishment of the Stock Brokerage Association in 1891 marked the birth of the Hong Kong stock market. However, before the 1960s, the development of the stock market lagged behind for a long time due to internal and external political reasons. In the 1960s and 1970s, with the increasingly strong demand for listing of Hong Kong enterprises, the Far East Society, the Gold and Silver Society and the Kowloon Society were born to meet the demand, forming the situation of "four divisions". During this period, the Hong Kong stock market became increasingly active, and the stock market became the norm.
Stage 2: Regulatory transaction unification
In 1986, the Stock Exchange was established, unifying the supervision and trading system of Hong Kong stocks. In September of the same year, the Stock Exchange was admitted as a member of the International Securities Federation. Since then, the Hong Kong stock market has gradually become mature and internationalized. Since the 1980s, the valuation center of Hong Kong stocks has gradually tended to be rationalized, and the correlation with the US stock market has significantly increased, and the market pricing drive has turned into EPS dominant.
After the return of Hong Kong in 1997, the proportion of Chinese stocks gradually increased, Hong Kong stocks started the process of Chinese capital, and the linkage between the Hong Kong stock market and the mainland was greatly enhanced.
The emergence of stock trading in the United States and Hong Kong is mainly due to the interconnection mechanism between the two markets. Through the connect mechanism, investors can trade and buy stocks in each other's region directly from their own location. The Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, for example, allow investors in mainland China to trade Hong Kong stocks on the Hong Kong stock exchange, while the Connect program also allows investors in Hong Kong to trade U.S. stocks on U.S. markets.