Russia’s Wagner Group Sends Gold & Oil Higher
While some momentary support to equity markets from the Wagner Group mutiny is possible, the fundamental pressure I am sorry to say, again continues to crumble away at the foundations of recent equity strength.
The former leader of the Wagner group is being exiled to Belarus. Thank goodness his army is not going with him, because then they would suddenly be much, much, closer to Kiev? This is not something anyone would want.
Instead the Wagner Group will be quickly incorporated into the Russian armies. It is unlikely this force will do anything other than return to the front lines. Hopes of this being the start of an earlier end to the Ukraine conflict may have been overly optimistic.
Stocks could get a momentary lift on such hopes, but really the weight of the current economic slow-down in the USA and the continuation of higher rates, are likely to again see lower stock prices later in the day.
After eight weeks of strong market gains, a correction in US equities was most definitely due. However, as you know, I believe there is more going on than just a technical correction here.
The latest S&P Global PMI for the USA has seen a drop from 54.3 to 53.00. This is still expansionary, but this index does not cover as much ground as other key indicators. We know manufacturing has been in recession for some time, and now services are rolling over too. Even contracting.
The potential impact of an earlier end to the war on equity markets, gold prices, and oil prices cannot be overlooked.
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