Dear valued client,
Markets lost ground in a shortened trading week to kick off 2024.
Israel pulled back from their offensive in Gaza to redirect their efforts in other parts of the region with the killing of Saleh al-Arouri, Hamas’ deputy political leader and co-founder of its military wing, in a drone strike this week in Lebanon’s capital city. The assassination of al-Arouri (who had a $5 million bounty from the U.S. in 2015) was the first targeted strike against Hamas outside of Palestinian territory since the war broke out at the beginning of October. The killing could intensify military activity along the Israel-Lebanon border where Hezbollah is stationed. It would be in Hamas’, Hezbollah’s, and Iran’s best interest, however, to not ignite a larger war in the region that would draw the United States more forcefully into the conflict.
In supply-chain-related news, the U.S. Navy sank three Houthi-lead ships in the Red Sea last weekend while responding to a distress call from a Maersk cargo ship. The Houthis, who are based in Yemen but supported by Iran, began attacking commercial ships traveling through the Red Sea in November in response to Israel’s retaliation. With roughly 12% of global commerce flowing through this particular body of water, the U.S. has vowed to secure the trade route.
Japan has had a less-than-ideal start to the new year. Nearly 100,000 people were evacuated from their homes as the East-Asian country was shaken by a series of earthquakes at the beginning of the week, the largest of which registered at a 7.6 magnitude. The death toll stands at nearly 100 as of now. Then, a collision at the Tokyo airport made matters even worse. A passenger plane hit a Japanese Coast Guard plane on Tuesday; all 367 passengers and 12 crew members were safely evacuated from the fiery Japan Airlines plane. Unfortunately, five crew members died on the Coast Guard aircraft, which was scheduled to deliver aid to the region affected by the earthquakes.
Important developments to keep an eye on in 2024:
- America will choose its next president in November. The campaign process and results will likely affect market performance.
- Paris will host the Olympic Games this summer.
“It’s your reaction to adversity, not adversity itself that determines how your life’s story will develop.” – Dieter F. Uchtdorf
Have a terrific weekend,
PW
