“While the fog of war makes any predictions on what might happen next impossible, the situation should be at the centre of our attention as we hope for peace, while also considering the possible impact on financial markets and our portfolios.”
News stories this past week have been accompanied by footage of rockets fired by Hamas militants into Israel getting intercepted by the Tamir missile, the business end of the Iron Dome air defence system. Each successful intercept probably means some lives on the ground have been saved; each successful intercept also means a US$40,000 ($54,993) piece of military hardware has been expended. And with thousands of missiles being lobbed over, the dollar figure adds up quickly.
When Hamas militants attacked Israel last weekend, some described it as Israel’s 9/11. Just like how the US 9/11 spurred two decades of spending on weapons, global spending on arms and security — already rising because of the Russian invasion of Ukraine last February — are likely to reach new levels. “The dramatic situation in Israel after this weekend’s attacks could prove a geopolitical game changer,” says Steen Jakobsen, Saxo’s chief investment officer.
