CVX - Iran Attacks Israel: What Middle East Turmoil Means For Markets

2024-04-14 23:30:56 ET

Summary

• Iran launched missile and drone attacks against Israel over the weekend, stoking fears of escalation in the Middle East.
• Media reports indicate that the Iranian attacks were largely unsuccessful.
• Do investors need to worry? Conflict in the Middle East has little fundamental effect on overall stock market performance in developed markets but can impact the price of commodities, particularly oil.
• Continued tensions may benefit oil stocks, while gold also is seen as a hedge against potential geopolitical chaos.
• A pair of merger arbitrage plays in the oil space that investors may want to consider (with exposure to rising oil prices).

As most of you are probably aware, Iran launched missile attacks on Israel over the weekend. The attacks are the latest in a series of escalations between Iran and its various proxies on the one hand, and Israel and the United States on the other. Media reports indicate that the missile attacks were largely unsuccessful, and as of my writing this, Israel has yet to directly retaliate. In this article, I'm briefly going to cover the investment implications. The main takeaway is that conflict in the Middle East has little effect on overall stock market performance, but can have a bigger effect on the price of commodities, particularly oil....

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