There are no words. The entire Jewish nation is in mourning. It feels insensitive to write an article in the aftermath of the barbaric acts of cruelty that occurred in Israel this past week. I am forcing myself to write to briefly take my mind off the pain and suffering we have faced.
Perhaps for the first time ever, the world shares in our sorrow, with most civilized countries standing united with Israel in the face of such heinous violence. Unfortunately, history has shown that empathy towards the Jewish nation has been fleeting. We fervently hope and pray that the world’s solidarity endures this time.
History also shows that global markets have exhibited varying reactions to geopolitical turmoil. Events that shake the foundations of nations often ripple through economies, influencing investor sentiment and market trends. Particularly in a region as strategic as the Middle East, global stock markets often react with heightened volatility. The primary driving factor is uncertainty. Disruptions or anticipated disruptions in trade, fears of broader conflict, and potential impacts on global economic growth can weigh down investor sentiment.
Government bonds, especially those from major economies like U.S. Treasuries, are frequently viewed as “safe-haven” assets. When geopolitical tensions escalate, there’s a tendency among investors to reallocate capital from riskier assets like equities to the relative safety of bonds. Essentially, bonds serve as shelters during times of uncertainty in the financial world. Gold is another classic “safe-haven” asset, especially if the stability of fiat currencies might be threatened, as gold often sees increased demand. Investors flock to the precious metal to hedge against uncertainty and potential inflation.
The Middle East holds the lion’s share of the world’s oil reserves. Conflicts in this region, especially involving significant countries, can lead to concerns about potential disruptions in oil supplies. Even if there’s no direct impact on oil production, the mere perception of possible supply shortages can drive oil prices higher. Additionally, any damage to infrastructure, blockades, or concerns about the safety of transporting oil can further exacerbate these price increases. During times of already high prices, this will only cause further inflationary concerns and pressures.
Real estate markets often exhibit reduced demand and potentially lower prices due to heightened risk aversion among investors and homebuyers. Regions directly affected by conflict or perceived instability may particularly experience a decline in foreign investments. Conversely, ‘safe-haven’ locations like the U.S. might attract more attention, potentially boosting property values. Additionally, while purchase activity may dampen, the rental market could surge as people opt for short-term housing solutions over long-term commitments. As economies weaken, central banks might adjust interest rates in response to geopolitical events, influencing borrowing costs. Still, the overall impact on real estate will vary based on local factors and the duration of the conflict.
Nonetheless, more than speculating about market movements, such tragedies remind us of the fragility of life and the importance of cherishing every moment. We eagerly hope for a future where peace and harmony overcome hate and divisiveness. As we grapple with the shock and grief of the moment, our collective strength, compassion, and unity are a testament to the indomitable spirit of the Jewish people. Each of us needs to do our part in whatever manner possible to participate in this global war against evil and speed up the arrival of Moshiach.
Shout out and happy birthday to Lonny Bardash, Rabbi Aharon Ciment, Gedalyah Eisenberg, Reuven Escott, Alan Finkelstein, Efrona Hagler, Miriam Kaminetzky, Deena Katz, Michal Krug, Sylvia Nachtigal, Arun P. Thomas, Shalom Vegh, and Stacey Younger.
Shmuel Shayowitz (NMLS#19871) is a highly regarded Real Estate & Finance Executive, Writer, Speaker, Coach, and Advisor. He is President and Chief Lending Officer of Approved Funding, a privately held national mortgage banker and direct lender. Shmuel has over twenty years of industry experience, holding numerous licenses and accreditations, including certified mortgage underwriter, licensed real estate agent, residential review appraiser, and accredited investor, to name a few. Shmuel has successfully navigated through many changing markets and business landscapes, making his market insights and experience well-coveted within the real estate industry. He can be reached via email at [email protected].