S&P 500 plunges, possible “Minsky moment”

Markets fell on Thursday.

The S&P 500 plunged 3.5 percent, the STOXX Europe 600 tumbled 1.4 percent and the Shanghai Composite fell 0.6 percent.

“Tech stocks, and the overall market, hadn’t really had a bad day since June, so this is a healthy breather,” said Esty Dwek, head of global macro strategy for Natixis Investment Managers.

Pershing Square Capital CEO Bill Ackman said: “It’s certainly not the beginning of the end, but I would say we’re coming upon one of the more uncertain periods in American history.”

Less sanguine is Ron William, market strategist and founder of RW Advisory, who told CNBC on Thursday of a possible “Minsky moment” amid the “ongoing story of tech street, Wall Street and Main Street all diverging”.

In addition, with low ETF flows and a spike in VIX, William suggested that assets could fall by “20 to 30 percent or more”.

Indeed, Matt Egan at CNN noted that the VIX just hit its highest level ever at an all-time high for the S&P 500.

Daryl Jones, director of research at Hedgeye Risk Management, said that it is “a significant red flag”, suggesting that a “higher stock market on higher volatility is telling you that risk is increasing”.