The Israel-Palestine Conflict

Around 6:30 am local time on Saturday, Palestinian militant organization Hamas launched the largest attack in 50 years against Israel. [The Daily Peel... ]() October 9, 2023 | Peel #559 In this issue of the Peel: - On Friday, all eyes were on the September jobs report, which came in so Dwayne Johnson-strong that it’s seemingly still The Rock of the economy. - Pioneer Natural Resources and Liberty Media Corp had an absolute day for themselves, whereas Aehr Test Systems and Domino's Pizza struggled to remain green. - Around 6:30 am local time on Saturday, Palestinian militant organization Hamas launched the largest attack in 50 years against Israel. Market Snapshot Happy Monday, apes. Let’s start off this Monday by pouring one out for all those involved in the conflict between Palestine and Israel. Yes, we all know Mondays suck, but at least there aren’t rockets being launched at your office (at least we hope). Prior to this flare-up in the ongoing conflict, equity markets closed Friday on a rather upbeat note. The initial panic in response to Friday’s jobs report was quickly beaten out by bullishness driven by a reduction in fears of a looming recession. Every sector outside of consumer staples printed green on the day, with the Nasdaq’s 1.6% gain leading the way. Treasuries, for their part, were volatile but mostly rose to close out last week. However, overnight trading this weekend saw rates spike, likely in response to the reignition of all-out war in Israel-Palestine. The 10-year is back at highs not seen since pre-GFC above the 4.8% line, while the 2-year briefly hit as high as 5.2% before coming back to ~5.1%. The Dollar initially spiked as well but settled lower back in the 106 territory. Let’s get into it. The Ultimate Program to Land a 6-figure Job in High Finance [image]() With over 17 years of experience, 900k+ members, and an insane network, WSO has cracked the code to making 6 figures right out of undergrad. We’ve helped over 1k students from all backgrounds break into these careers. WSO Academy is a 12-week program (with many lifetime benefits) that puts everything we’ve learned on a silver platter for you—to dramatically improve your odds at landing a high finance offer. The waitlist for WSO Academy just opened again, and we’re only accepting 20 students into the next cohort. So if you’re serious about breaking into high finance, you need to sign up for the waitlist asap because we are opening applications next week (people on the waitlist will be the first to know). [Get on the waitlist -> Applications opening next week and capped at 300](=) (so we can review all of them carefully). No reason for you to be sleeping on this. Banana Bits - Just 2-days into the War’s reignition, oil experts are trying to see through the mist on how this could [impact energy prices.]() - For the first time in just about *checks notes* ever, [serious concerns]() over demand for U.S. debt are hanging over Mr. Market’s head. - The Biden Admin is already rolling out plans to send some [aid over to Israel.]( Macro Monkey Say Dwayne Johnson’s Job Market Someone grab the steroids, and let’s hit the gym—the labor market is jacked, and we’ve got some catching up to do. On Friday, all eyes were on the September jobs report, which came in so Dwayne Johnson-strong that it’s seemingly still The Rock of the economy. Following the report, the selling in stocks was so Fast and Furious at the open that we almost grabbed our go-bag and set out for the nuclear bunker, but by the end of Friday, it was all sunshine and rainbows. Driving this reaction was the massively unexpected 336k jobs added in September, while economists were looking for only ~170k. "... but by the end of Friday, it was all sunshine and rainbows." In addition, the August and July reports saw some hefty upward revisions as well. To highlight the important stuff, September saw: - 336k non-farm payroll additions vs 170k expected - July’s +79k revision was a 50.3% jump from original reporting, from 157k to 236k - August’s +40k was a slightly less insane 21.4% jump from the OG report, from 187k to 236k - Unemployment was unchanged at 3.8% - The labor force participation rate and employment-to-population ratio were both unchanged at 62.8% and 60.4%, respectively. - Average hourly earnings grew 0.2% monthly and 4.2% annually, outpacing inflation. Damn. Not bad, America. But, it might be bad for America, at least according to our tarot card reading of what the Federal Reserve and Chair JPow’s reactions might be. Since rate hikes began back in March ‘22, strong non-farm payroll reports have been reason to sell as it was little more than a signal of additional rate hikes on the horizon. But nowadays, everyone seems to be in agreement that inflation is moving in the right direction and that the Fed won’t—or can’t—raise any further as the risk of recession has become the primary catalyst for market moves. Recessions risks also certainly seem to be on top of the minds on Main Street as well. Recent surveys indicate that despite Americans feeling good about their own situation, their outlook on the economy is the [exact opposite.]() "Fed won’t—or can’t—raise any further as the risk of recession has become the primary catalyst for market moves." The good news is that with student loan repayments coming back online, excess savings coming offline, skyrocketing deficits and long-term bond yields, increasing consumer debt levels, a sh*tshow housing market, slowing new orders and industrial production, etc. (we could go on for a while), Americans still have their jobs. [image] [Source]() Consumer spending drives ~70% of U.S. GDP, and as long as people aren’t getting laid off en masse, it’s really hard to have a recession with sub-4% unemployment. With wages still growing, that bodes well for the [see above] 2/3rds to 70% of the U.S. economy despite the 4.2% annual growth rate coming in lower than the 4.3% growth estimate. That’s real growth of 0.7% using last month’s 3.5% PCE figure, but we don’t have to wait too long for the next one, with the next consumer inflation dropping on Thursday. Anyway, hope you kept/found your job and will continue contributing to the wonderful charity that we call the U.S. GDP. If not, steroids aren’t that expensive, and with Dwayne Johnson at 51 years old, Hollywood might need a new strong man soon. What's Ripe Pioneer Natural Resources (PXD) ↑ 10.45% ↑ - It’s fine when a grocery store puts “natural” in the name of something, but when giant oil conglomerates do the same thing, it’s bad? Just can’t win these days… - Unless you’re Pioneer Natural Resources, that is. This giant fossil fuel producer announced plans to be acquired by Exxon Mobil, one of the few even larger giant oil companies, for $60bn in the biggest deal of the year. - Nothing is certain yet, but the deal could be finalized as soon as next week, with likely months or years-long process to actually integrate. Once again, this is an example of giants like ~$430bn Exxon gaining territory in the Permian Basin, one of the U.S.’s most important shale deposits. Liberty Media Corp Series A (FWONA) ↑ 3.63% ↑ - We’re not even gonna attempt to explain Liberty Media’s corporate structure (because we don’t fully understand it either), but just believe me when I say this stock is a company with shares in everyone’s new favorite “sport”: Formula One. - The Google Trends data says it enough, but in case you don’t believe them, just know that each race draws [almost the same](=) viewership globally as the Super Bowl. And now, analysts at Citi are buying into the hype. - According to the Wall Street bank, alleged “issues” with next month’s Las Vegas race—seen as a key driver of growth for the sport in the U.S.—are overblown. - Either way, we’re just glad to see some professional speeding come to the Streets of Las Vegas instead of reserving that right strictly for drunk bachelor parties. What's Rotten Aehr Test Systems (AEHR) ↓ 12.60% ↓ - Take a deep breath—shareholders in this stock could use some fresh air… and a fresh portfolio. - Aehr Test Systems, a manufacturer of testing equipment for the semiconductor industry, plummeted on a really not-bad earnings report. The lack of a guidance upgrade did Aehr dirty. - If chips are a “[pick-and-shovel]()” play on AI, this stock is like a pick-and-shovel play on that pick-and-shovel play. Makes enough sense, right? But, what doesn’t make sense to investors is why full-year guidance was left standing. - EPS of $0.18/sh on $20.6mn in sales handily beat estimates for $0.16/sh on $19.2mn. That’s an insane 93% jump in Q1 sales, but like your parents looking at your transcript, nothing is ever good enough for Wall Street. Keeping full-year guidance in the same range—which is still +90% ‘22 profits—is apparently now a death knell for chip-related stocks. Domino’s Pizza (DPZ) ↓ 5.97% ↓ - What, we don’t like drunk food anymore? Sure seems like it, based on Domino’s share price action on Friday. - The chain pizza maker that everyone “hates” until it’s 1 am and the only place that still delivers has actually been one of the best stocks around over the last decade. Shares are up almost 400% since this week back in 2013, and that’s not even including their hefty dividend. - A sizable float of shares was recently sold by hedge fund QCM Cayman, and shares went ex-dividend for the quarter recently with the payment date just a few weeks ago, but otherwise, there’s not much fundamentally driving the selloff. Thought Banana War in the Middle East Around 6:30 am local time on Saturday, Palestinian militant organization Hamas launched the largest attack in 50 years against Israel. Hundreds—by now, maybe even thousands—are already dead, and as of Sunday, an all-out war has been declared. By mid-afternoon Sunday (time of writing), the Israeli Defense Force (IDF) put the total number of rockets fired at ~2.2k. Hamas claims it was more like 5k, but regardless, compared to the 4k fired in total throughout the latest flare-up on the conflict in the 50-day war, this is already huge. "Let’s hope this one doesn’t last very long." Whether you’re #FreePalestine or #OneWithIsrael, one thing we can all agree on is that any killing of people is a tragedy. Let’s hope this one doesn’t last very long. In response to the invasion, international markets have already traded up oil prices by at least 3% and sent equity futures down the drain. Surprisingly, war doesn’t tend to be good for economies… at least when it starts. I mean, just look at the S&P when World War II started compared to the decade after that nightmare ended. Israeli President Benjamin Netanyahu has already vowed a “mighty vengeance” along with delivering a grave speech to his country on the current state of affairs. Rocket strikes have been recorded from Tel Aviv to near Jerusalem, and as seen in [this video](, festivalgoers are fleeing the party from outside Israel’s second city. For their part, Hamas leader Mohammed Deif has made clear that to the Palestinians in the enclave of the Gaza Strip, actions including naval blockades, various IDF attacks over the years, and plenty more have justified this attack. "... on Wall Street, all eyes will be peeled on defense contracts both stateside and over in the Middle East." The never-ending conflict continues to rage, and on Wall Street, all eyes will be peeled on defense contracts both stateside and over in the Middle East. We hope it doesn’t last long, but for now, stay tuned. The big question: How long will this attack in the never-ending Israel-Palestine conflict rage for? What will be the ending resolution, if there is one? What questions are we not asking that we should be? Banana Brain Teaser Friday — Which is larger, infinity or infinity + 1? Answer Neither. If you add one to infinity, you still have infinity. Today — What is the first number in this series? ?, 14, 15, 92, 653, 5897, 9323 Shoot us your guesses at vyomesh@wallstreetoasis.com Wise Investor Says “In the case of a war, you can become bearish, but you can't opt-out. You've got to transform your assets into something that will hold value.” — George Soros How would you rate today’s Peel? [All the bananas]() [Decent]() [Rotten AF]() Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? [Be smart like your friend](=). [ADVERTISE]() // [WSO ALPHA]() // [COURSES](=) // [LEGAL](=) Don't want The Daily Peel? [Unsubscribe here](. Click to [Unsubscribe]( from ALL WSO content IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States