Russia is breaking market rules left and right

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.The latest: Russia’s stock market reopened on Thursday after it was shuttered for a month. Under normal circumstances, there wouldn’t be much demand for shares in Russian companies considering they do most of their business in an economy that some expect to contract by more than 20% this year.But, surprise! The benchmark MOEX index surged by as much as 10% in early trading. The index was up roughly 5% in afternoon trade in Moscow.Here’s why: Russia’s stock market isn’t operating under normal rules. The central bank has blocked foreign investors from selling their shares and banned short selling. Only 33 stocks were allowed to trade on Thursday.Context: Foreign funds held more than 80% of shares trading on the Moscow Exchange in the first half of 2021, according to Reuters. The United States and Canada accounted for 54% of the total, with 22% from the United Kingdom and 21% from the rest of Europe.The Biden administration wasn’t very impressed with the “reopening.” “Russia has made clear they are going to pour government resources into artificially propping up the shares of companies that are trading,” deputy national security adviser Daleep Singh said in a rare White House statement on another country’s financial markets. “This is not a real market and not a sustainable model — which only underscores Russia’s isolation from the global financial system,” added Singh. Preventing foreign investors from selling stocks isn’t the only way Moscow is breaking traditional market rules. President Vladimir Putin said Wednesday that “unfriendly” countries would have to pay for Russia gas in rubles. That’s not going to go down well with countries and companies that have contracts stipulating they will pay for gas in euros or US dollars. The German government has argued that any demand to pay for gas in rubles would represent a breach of contract. “It’s unclear how Western countries will be able to access sufficient rubles to fund gas imports, or even whether they’d be willing to pay in rubles,” said Liam Peach, emerging Europe economist at Capital Economics.It’s not the first time that Moscow has suggested that it will ditch its financial commitments. Russian finance minister Anton Siluanov said earlier this month that Moscow will repay creditors from “countries that are unfriendly” in rubles until the sanctions are lifted — even if contracts call for payment in dollars.Big picture: Credit rating agencies have responded to Moscow’s apparent willingness to disregard the rules by downgrading the country’s debt rating. Fitch has warned that a default is “imminent.”Preventing foreign investors from selling shares and attempting to rewrite contracts will further isolate Russia, according to analysts. “The longer-term implication is that [this] accelerates Russia’s strategy of de-dollarisation and reinforces the idea that Russia will continue to drift towards autarky,” said Peach.Good news for the economy can be found in these stocksHere’s a promising sign from Wall Street: Transportation stocks are leading the market this year. That could bode well for the broader economy, reports my CNN Business colleague Paul R. La Monica.The Dow Jones Transportation Average, a group of 20 stocks that includes major railroads, truckers, airlines and freight companies, is up about 7% this month and is flat for the year.Meanwhile, the more widely known Dow Jones Industrial Average, which includes blue chips like Apple, Coca-Cola and Disney, is down 5% in 2022, as investors grow nervous about rising interest rates and inflation.When the Dow transports outperform the rest of the market, that is often viewed as a positive macroeconomic indicator.It means consumers are buying lots of stuff from Amazon and Walmart that needs to be shipped to warehouses and retailers. And it’s a sign that people are traveling again, for both leisure and business.Rental car firm Avis Budget, railroad Union Pacific, trucking company JB Hunt and the airlines Alaska Air, Southwest and JetBlue are among the top transportation stock performers this year.The strength in transportation stocks is even more remarkable given the surge in energy prices. Oil has soared more than 50%, to around $115 a barrel in the United States.Potential problems remain for the sector, of course. They include supply chain woes, trucker labor shortages and the resulting need to raise wages and a recent surge in Covid cases.Meme stocks are backShares of GameStop and AMC, two companies beloved by traders on Reddit and other social media platforms, are surging again.Shares of GameStop rose more than 30% on Tuesday and were up another 16% on Wednesday. AMC soared 15% on Tuesday and gained 20% on Wednesday.GameStop popped after the company’s board chairman Ryan Cohen, co-founder of online pet supplies retailer Chewy, bought another 100,000 shares. “I put my money where my mouth is,” he tweeted Tuesday. His RC Ventures now owns 9.1 million shares, an 11.9% stake in the retailer.Cohen is hoping to turn GameStop around with investments in NFTs and other cryptocurrency and blockchain initiatives. He has brought in two former Amazon executives to be the new CEO and chief financial officer. AMC is also benefiting from some executive chatter on Twitter.The theater chain’s CEO, Adam Aron, tweeted Tuesday about his excitement for the upcoming spring and summer movie slate and defended the company’s purchase of a more than 20% stake in miner Hycroft.”So amusing. Narrow-minded call our Hycroft investment… ‘stupid’…’idiotic.’ AMC so understands how to raise cash and stretch out debt,” Aron wrote, referring to his company’s recent plans to refinance.”Tons of crow eating ahead, and it won’t be by me!” the CEO added.Both GameStop and AMC have fallen this year, along with the broader market. AMC shares are still down nearly 20% in 2022, despite a nearly 45% surge in the past five days. GameStop’s stock has fallen about 3% this year, even after skyrocketing 65% in the past week.Darden Restaurants, TD Synnex and NIO report earnings on Thursday.Also today:US unemployment claims at 8:30 a.m. ET.EIA data on natural gas inventoriesComing tomorrow: US pending home sales data and consumer sentiment from the University of Michigan.