Russia: How Financial “Complacency” Morphed into “Crisis”
by Bob Stokes
Updated: June 02, 2020
It's been a tough year for Russia financially.
Of course, there's been the big collapse in oil prices, plus -- just like many other global stock indexes -- Russian stocks are well off their highs.
That's quite in contrast to 2019, when the RTSI index, a U.S. dollar-based index of 50 Russian companies, climbed 29%.
Shortly after registering that performance, our January Global Market Perspective showed this chart and said:
Complacency toward financial risk stands at unprecedented extremes.
Our global analyst's comment suggested that a change of trend was afoot, given that extremes in financial markets are akin to a rubber band that is stretched to the breaking point.
Well, here's an update on the RTSI from our just-published June Global Market Perspective. Our analyst notes:
The RTSI index... did worse than Europe's broader indexes, losing more than half of its value from February to March. The stunning crash was followed by [a] rally that has since retraced about 50% of the decline.
In addition to stock prices being well off their highs, Russia's economic output will contract at 6% this year and the jobless number is expected to double.
Plus, in April, the government projected that the budget deficit will hit 4% of GDP.
As our June Global Market Perspective also notes:
Russia's last financial crisis in 2014-15 also came on the heels of a decline in oil prices, and the crisis culminated on December 15, 2014, when the ruble suddenly plummeted against the euro and dollar... Russia is entering its current crisis from a much weaker financial position.
So, does this mean that the rally in Russian stocks is nearly over, or might the RTSI index climb the proverbial "wall of worry"?
Well, a March 27 Barron's headline suggests that investors will eventually be rewarded:
Russia's Stocks Are a Buy Only for Very Patient Investors
Now is the time to learn what the RTSI index's Elliott wave pattern suggests. After all, as you've just seen, our global analyst anticipated the dramatic change of trend in Russian stocks, and now is the time to learn what is expected next.
Get our complete analysis of Russia, plus our outlook on many other global financial markets (including energy), risk-free for 30 days.
Follow the link below this video to get started.
Use Your Roadmap to Global Investment Opportunities
That "roadmap" is Elliott Wave International's monthly Global Market Perspective: the new June issue has just published.
Many of the 40-plus worldwide financial markets it covers are at pivotal junctures -- in other words, their chart patterns show price trends that are likely on the verge of an abrupt and dramatic change.
Get ready to avoid risks and embrace opportunities in the second half of 2020.
As you look through the Global Market Perspective's 50-plus pages, you'll find in-depth coverage of major financial assets in the U.S., Asian-Pacific, Europe and other geographic regions.
You get our forecasts for global stock markets and economies, currencies, bonds, metals, crude oil and more.
This global "roadmap" is available for your review without any obligation.
Follow the link below to get started with your risk-free trial.
Oil prices are soaring and the world's biggest oil ETF, the USO, hit a 1-year high on October 20. Now, energy markets have won the hearts of traders and... robots alike! But before AI "bet big" on energy, Elliott wave analysis set the stage for USO's advance -- two months ago!
After a four-month sideways trend, the Invesco Commodity Index ETF shot up in September on the way to its highest level since late 2014. See the chart and forecast that anticipated the big move.
"Mortgage-backed securities" is a phrase that sends shivers down the spine of investors who remember the 2008 financial crisis. MBB is an ETF that tracks these securities -- watch our Interest Rates Pro Service editor walk you through MBB's 10-year wave pattern to see what's likely next.