The brief insurrection in Russia by the Wagner Group over the weekend has had only a minor net impact on the markets today. U.S. and European stocks are mildly higher. Gold is just slightly higher, indicating no major flight-to-safety.
Benchmark ICE Dutch TTF natural gas futures prices today are just slightly higher after giving back an early +14% rally. U.S. nat-gas prices are up +1% this morning, while crude oil is little changed.
Russia’s Deputy PM Alexander Novak said today in a televised governmental meeting that Russia’s energy industry operated normally over the weekend. He said that oil, oil product, and natural gas production remained normal.
There was a flurry of concern on Saturday when Wagner Group leader Prigozhin and a large group of his mercenaries moved north towards Moscow with no significant resistance from the regular Russian military. That sparked concerns that key elements of the Russian military and intelligence apparatus might support a Prigozhin coup attempt against Vladimir Putin. Outright global panic could have ensued if Prigozhin got control of Russia’s nuclear weapons.
However, Prigozhin decided to pull back his troops and accept a purported deal whereby he would go into exile in Belarus, ending his brief military threat. Mr. Prigozhin has not been heard from publicly since Saturday, which raised the possibility that Putin’s forces apprehended the leader of the group that reportedly shot down some Russian aircraft and killed a number of regular Russian troops during their stampede towards Moscow.
The latest chapter in Russia’s long history of internal strife ended quickly with little net effect for the markets. Yet, this weekend’s insurrection made clear that the Russian risks remain high for the markets.
The insurrection exposed Vladimir Putin’s internal weakness and possible fault lines within the Russian military. The insurrection might cause Mr. Putin to take even more drastic moves to try to quickly end the Ukraine war, such as using nuclear weapons or causing a nuclear disaster at Ukraine’s nuclear power plant. There also remains the possibility of an eventual military coup against Mr. Putin, which would put the Russian nuclear codes into the hands of an unknown group of military strong-men.
Suffice it to say that the markets will be watching Russia even more carefully in the coming weeks to gauge the big risks that could emanate from that rogue country.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
