Despite lingering global economic risks from the Covid-19 pandemic and geopolitical tensions, Wednesday saw the S&P 500 and Nasdaq both notch record highs.
by Elliot Smith
Asset prices could be on the cusp of a sharp collapse known as a “Minsky moment,” and may retest lows last seen in March, according to Ron William, market strategist and founder of RW Advisory.
Markets have experienced a broad bullish period in recent months as investors bet on further stimulus from governments and central banks, and the prospect of a coronavirus vaccine. Despite lingering global economic risks from the Covid-19 pandemic and geopolitical tensions, Wednesday saw the S&P 500 and Nasdaq both notch record highs, while the Dow Jones Industrial Average closed above 29,000 points for the first time since February.
A “Minsky moment,” named after economist Hyman Minsky, refers to a sudden market collapse following an unsustainable bull run, which in this case could be fueled by the “easy credit” environment created as a result of unprecedented fiscal and monetary stimulus measures.