Russian Bear is Back
Russia may be the Bear eating away at Ukraine, but Putin’s pride and aggression are causing a Bear market to manifest in his own country as the currency and stock markets start to break down further.
Using Russia’s stock market (RTS) as a wealth indicator we can see the 2 year sideways pattern held and stocks even rallied after the Ukraine invasion by Putin. While the US and Europe would like to take credit with their sanctions upon Putin in causing stocks to fall, much more importantly has been the fall of Oil from $108 a barrel in late June to $76 today. To the tick Russian stock market wealth and dependency on energy sales has coincided with the movement of Oil prices. Maybe we should thank Merkel of Germany for unwittingly being too stubborn to allow fiscal and monetary stimulation in Europe which has kept Europe teetering on another recession, kept Chinese growth subdued and expectations for Oil consumption lower. As long as oil stays under $80 and keeps hitting new lows, then the Russian bear market in stocks will continue.
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