The recent news and reality of the traumatic conflict in the Middle East triggers feelings of both sorrow and fear, including how this will impact financial markets. The U.S. and global economies were already rattled by inflation and rising interest rates. With the news of the surprise attack by Palestine’s Hamas group on Israel (and Israel’s subsequent declaration of war), there are certainly worries about how this could impact financial markets.
The fallout of this war will take time to be fully understood, but if the conflict spreads to the rest of the Middle East, there could be far-reaching concerns. Iran, specifically, supports Hamas and is a significant oil producer; if they become embroiled in this conflict, it will likely impact the price and availability of crude oil. Just after the Hamas attack, crude prices jumped by about 4%, but that’s a typical “fear premium” market reaction based broadly on the speculation of higher risk. It wasn’t a huge increase, and prices readjusted over the following days.
While none of us knows for certain how things will play out, investors are understandably watching closely to see the impact of these events on an already volatile market. And the potential for far-reaching and/or long-term effects can be especially worrisome for those who are following this crisis closely. Please know that we are continuously evaluating what it may mean for world and U.S. markets as well as your personal investments.
We strive to keep you regularly updated with important information and news.
Please find the current monthly whitepaper from Phil Blancato, Osaic’s Chief Market Strategist, attached below.
This paper provides research, analysis, and commentary about the markets and the economy.
As always, we’re here to answer any questions you may have, please don’t hesitate to reach out.
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War and the Markets
October 20, 2023