Will Trump’s Apparent Tougher Stance Against Kremlin Hurt Russia ETFs?

From Damir Kaletovic: In an apparent eleventh-hour attempt to head off a scandal over secret talks with Russian officials that have led to the resignation of his national security advisor, Donald Trump today accused Russia of taking Crimea by force, using Twitter as his medium.

Crimea was TAKEN by Russia during the Obama Administration. Was Obama too soft on Russia,” Trump tweeted.

Trump is now under pressure to demonstrate a tougher stance against Russia.

Russia has said it will never return Crimea to Ukraine, noting that in a 2014 referendum, a majority of Crimeans voted to become part of Russia. The Ukrainian perspective is that Russian troops illegally annexed the peninsula, and the referendum was a fraud.

We don’t give back our own territory. Crimea is territory belonging to the Russian Federation,” Maria Zakharova, spokeswoman for the Russian Foreign Ministry, told a news briefing on Wednesday.

In what sounded more like a warning, Russian Senator Oleg Morozov told RIA Novosti Wednesday that “One should not create an impassable barrier that Russia will not accept. Russia’s rejection of its sovereignty over the Crimea cannot be seriously considered.”

Another Russian official suggested that Moscow was not taking the statements seriously.

Viktor Ozerov, head of the Russian Federation Council’s Defense and Security Committee, told Russian media that the recent White House statements about Crimea were likely intended to “mute” the discontent of the American establishment with Trump because of his alleged pro-Russian stance.

The harsh words for Russia on Crimea began on Tuesday, as US National Security Advisor Michael Flynn resigned over his failure to disclose secrets talks with a Russian diplomat, which were wiretapped by U.S. intelligence services and leaked to the media, sparking an intensifying national security controversy and the beginnings of a war between the White House and the intelligence services.

The statements also come as Russia is becoming emboldened in the Black Sea, offshore Crimea. Earlier this month, a Ukrainian military plane made two low passes over Russian oil rigs in the Black Sea, with Russia calling the incident a clear provocation, and Ukraine claiming that its aircraft was fired on. The Russian oil rigs are in the Odessa gas fields, where Russia hijacked two drilling rigs in Ukrainian waters in December 2015, claiming them as part of the new Russian Crimea.

The Market Vector Russia ETF Trust (NYSE:RSX) was unchanged in premarket trading Thursday. Year-to-date, RSX has gained 1.89%, versus a 5.10% rise in the benchmark S&P 500 index during the same period.

RSX currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #5 of 77 ETFs in the Emerging Markets Equities ETFs category.


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