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Mazzei Minute: 10/13/23

The horrific and tragic assault on the people of Israel tears at our hearts and minds. How can terrorists commit such barbaric acts against innocent civilians? Israel is America’s friend and ally—and the only true land of democracy and freedom in the Middle East. American citizens in Israel are among the victims, so we must stand with Israel in both word and deeds.

As to the financial markets, certain geopolitical conflicts like this current one are relatively unimportant because the risk to systems of oil and gas production and consumption from those conflicts are narrow. For example, Islamic groups operating in Africa and other areas of the Middle East for several years have not had a significant impact on energy prices and U.S. corporate earnings.

In fact, the Abraham Accords established during the Trump administration and recent discussions between Israel and Saudi Arabia have raised the prospects of a new level of stability for the region. Stability is, of course, what financial markets prefer. One can only surmise that these new relationships between Israel and Arab states led to the heinous acts of Hamas to derail progress in the region.

Energy prices are no higher than they were before the attack. The U.S. stock market declined immediately after the assault but quickly reversed and turned to gains. For now, the events in Israel and Gaza should not have any impact on global markets. The risk for further destabilization in the region, should Lebanon or Iran escalate the conflict, however, requires careful attention.

Our prayers will be for the peace and safety of our Israeli friends and allies.


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