After Hamas militants stormed into Israel in an unprecedented attack likely to prompt violence in Israel

Investors are moving towards safe assets as they closely monitor developments in the Middle East to anticipate risks geopolitics of the markets

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Edited by| Christian Megan

 

Economy section -  CJ journalist

 

Tel Aviv- October,8,2023

 

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Analysts say that the escalation of geopolitical risks may prompt a wave of purchases of assets such as gold and the dollar and may also boost demand for US Treasury

bonds.

Peter Cardillo, chief market analyst at Spartan Capital Securities, said: "This is a good example of why people should have gold in their portfolios . It is an ideal hedge in the

face of international turmoil" and predicted that the dollar would also benefit from this situation.

"Every time there is international turmoil, the dollar gains strength,"he said.

The markets have been reacting in the past few weeks to expectations that US interest rates will remain high for a longer period. Bond yields rose while the dollar made a

series of gains. At the same time, stocks suffered sharp losses in the third quarter but stabilized last week.

"Whether this is a watershed moment for the market or not depends on how long the conflict lasts and whether other parties are immersed in the conflict,"Brian Jacobsen,

chief economist at ANX Wealth Management, said about the situation in Israel.

The morning after the unprecedented Hamas attack, the Tel Aviv Stock Exchange woke up to a decline as investors prepared for an unstable and unpredictable period.

The TA-35 major company stock index fell by 4.8%, the TA-125 benchmark index fell by 5%, and the TA-90 index, which tracks the top-valued stocks not included in the TA-

35 Index, fell by 5.8% Pence.

The TA-Bank index of the five largest banks fell by 6.3%.

Jacobsen asked about the possible impact of what is happening on oil prices despite Iran's recent increase in its production.

Both Iran and the Lebanese Hezbollah praised the Hamas attack.

"Iranian oil production is increasing, but any progress they make behind the scenes with the United States of America will be greatly undermined by Iran celebrating the

actions of Hamas,"Jacobsen said. "The possible loss of production is important, but it will not be devastating (for Tehran),"he added.

Jacobsen pointed out the importance of waiting for the Saudi reaction to what is happening, at a time when Washington is trying to reach an agreement that would normalize

relations between Israel and Riyadh.

 

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