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- War And Wealth: What’s Next? 💸
War And Wealth: What’s Next? 💸
Did you know that during times of geopolitical instability, certain sectors of the economy can remain remarkably resilient?
Did you know that during times of geopolitical instability, certain sectors of the economy can remain remarkably resilient?
It all boils down to the fact that despite the doom-and-gloom, most financial institutions tune out this noise and focus on cold, hard numbers, and you should too.
In this issue, we’ll look at the following topics:
Israel Getting Closer To Defeating Hamas, But Hezbollah Awaits: First, we’ll look at the current state of conflict in Israel ⚔️
The Impact Of War On Financial Markets: Next, we’ll examine how ongoing conflicts influence global financial markets 💣
Sell In May And Go Away? Finally, we’ll explore the historical trend suggesting lower stock market returns from May through October 📅
Stay informed and make strategic decisions with our expert analysis and market insights. Are you ready?
Israel Getting Closer To Defeating Hamas, But Hezbollah Awaits ⚔️
Israel is probably three to four weeks away from completing the main part of the war against Hamas, the terrorist organization that has pledged to continue to murder Jews again and again until it destroys Israel.
Once the war is complete, Israel will need to maintain a strong presence in Gaza to run “mop-up” operations to wipe out any remaining terrorist elements and to ensure the terrorist movement doesn’t reconstitute itself.
But the struggle isn’t over ❌
Iran’s main proxy is Hezbollah and it essentially took over Lebanon in the 1990s, and it has launched approximately 5,000 missiles into Israel since October 7, 2023, forcing 80,000 Israelis to abandon their homes in the north of Israel.
Israel is a tiny country, the size of New Jersey, and it cannot tolerate having a sizable portion of the country being uninhabitable.
Furthermore, Hezbollah and Iran are bent on Israel’s destruction 💥
In the coming months, Israel will have no choice but to fight an all-out defensive war against Lebanon.
The Impact Of War On Financial Markets 💣
War only impacts financial markets on a sustained basis if key resources for the global economy are negatively impacted.
Oil prices today are well below the levels that prevailed prior to the start of the war with Hamas.
Just as oil production was not impacted by the war with Hamas, it is not likely to be impacted by the war against Hezbollah 🛢️
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Sell In May And Go Away? 📅
The adage “sell in May and go away” comes from the idea that trading volumes are lower during the summer months, particularly in August, and stock market performance is worse in the May through October period compared to the November through April period.
Since 1990, returns have averaged 7% in November through April while rising by 2% on average from May through October.
Additionally, lower volumes create less predictable moves that can be harder to trade.
So brace yourself for the possibility of a pick up in volatility, and perhaps more subdued returns in the coming few months 💰
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