I remember the 1998 Russian crisis well. It was near the end of the summer, and threatened to put a real damper on an otherwise excellent stock market year. The “Moscow meltdown” bled over the S&P 500, which plunged 20%.
There are reasons 1998 and today are different
- Tough sanction in place have somewhat isolated Western investors
- Russia has a war chest of $416 billion in currency reserves today, versus very little in 1998
- Russia’s currency is free floating, and not pegged to the US Dollar like in 1998. External shocks can be absorbed by the currency markets.
There are other worries in the world we can be concerned about, but Russia collapsing and spilling over to us like 1998 isn’t one of them.