Dear valued client,
Markets posted gains this week despite war breaking out in the Middle East. I will refrain from commenting on the history of the Israeli-Palestinian conflict as my ignorance far surpasses my knowledge on the subject. I will share the objective facts as I have read them and comment on how the conflict may affect markets in the near future.
Early Saturday, Hamas – which has been the ruling body in Palestine since 2007 – launched a surprise attack from Gaza into Israeli territory. Militants ravaged over 20 towns, killing over a thousand Israeli civilians (including a handful of Canadians and nearly 30 Americans) and taking hundreds of hostages. On a per capita basis, the loss of life was greater than that of 9/11. Israel launched several missiles into Gaza in retaliation, killing hundreds of Palestinians. Casualties continued to mount on both sides throughout the week.
This war, as with any other war, has the potential to escalate geopolitical tensions and consequently increase volatility in global markets. Hamas is largely funded by Iran, a big player in the region. President Biden sent an air carrier to the Eastern Mediterranean to support Israel’s counteroffensive. When there’s heightened conflict in the Middle East, the oil industry is often quick to react given fears of supply distributions. Israeli PM Benjamin Netanyahu warned this could be a “long and difficult war.” Investors will be mindful of how this war as well as the ongoing war in Ukraine will impact returns moving forward.
In economic news, the U.S.’s inflation report for September came in at a steady 3.7%, unchanged from a month prior. Strong earnings figures from the financial sector including banks such as JP Morgan and Wells Fargo also helped bolster gains for the week.
“History does not repeat, but it rhymes.” – Mark Twain
Have a terrific weekend,
PW
