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Gaza militants' surprise attack on Israel last week has led to a shocking toll, with over a thousand casualties. Israel initiated a series of intense airstrikes on Gaza and officially declared a state of war against Hamas on Sunday in response to an unexpected assault by the militant group, which commenced on Saturday.
More than 700 Israelis and 400 Palestinians have lost their lives as the conflict escalates. The situation has been further worsened by Israel's decision to disconnect power in the region, making the provision of medical care more challenging. The assault included rockets, infiltrations, and the capture of soldiers, exacerbating tensions.
The investing world also responded to this attack. Below we highlight a few winning ETF areas amid the Israel-Gaza conflict.
ETF Areas to Win
Energy – United States Brent Oil ETF (BNO - Free Report)
Oil jumped back to toward $90 a barrel after Hamas’ surprise attack on Israel instigated fears of a supply crunch. Both West Texas Intermediate and Brent soared more than 5%, days after crude recorded its biggest weekly decline since March. The chaos in markets will likely be determined by whether conflict spreads to the rest of the Middle East region, as Iran – which is both a key oil producer and a supporter of Hamas – is involved in the picture.
Though chances are high the oil market rally is short-term nature, if Western countries now officially link Iranian intelligence to the Hamas attack, then Iran’s oil exports is likely to face downside risks (read: Top ETF Stories of September to Watch in October).
Gold is often viewed as a hedge against market risk. The precious metal has been subdued this year thanks to the rising greenback and reduced demand from the major consuming nations like China and India. The metal has seen some strength lately thanks to this market turmoil.
U.S. Dollar – Invesco DB US Dollar Index Bullish Fund (UUP - Free Report)
The U.S. dollar strengthened against most of its major peers as due to the sudden attack by Hamas within Israel. The greenback — seen as a haven in times of crisis — advanced 0.2% versus the euro and pound, while risk currencies such as the Aussie and kiwi slumped. A strong U.S. jobs report also gave a reason to greenback to shoot up as the Fed might enact another interest rate hike this year. The Norwegian krone was the best-performing major currency as oil jumped more than 5%, bolstering the outlook for Norway’s exports.
Yen – CurrencyShares Japanese Yen ETF (FXY - Free Report)
The Japanese currency yen is another asset class which is considered as a safe haven. Despite the bank of Japan’s relentless effort to pursue an easy money policy, yen has gained strength lately. Japanese yen should be under watch as long as the Israel crisis remains in focus.
Volatility investments are not meant for long-term traders. Prices for these types of products tend to lose value over time thanks to a contangoed market, and a steep roll cost. However, lately, thanks to broad market issues, volatility products delivered decent returns in the past one month. The ETF tracking the performance of the S&P 500 VIX Short-Term Futures Index – ProShares VIX Short-Term Futures (VIXY - Free Report) is also likely to gain in the short term on the Middle East crisis. In any case, the broader market is under stress due to sticky inflation and higher interest rates.
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5 ETFs to Gain on Israel Attack
Gaza militants' surprise attack on Israel last week has led to a shocking toll, with over a thousand casualties. Israel initiated a series of intense airstrikes on Gaza and officially declared a state of war against Hamas on Sunday in response to an unexpected assault by the militant group, which commenced on Saturday.
More than 700 Israelis and 400 Palestinians have lost their lives as the conflict escalates. The situation has been further worsened by Israel's decision to disconnect power in the region, making the provision of medical care more challenging. The assault included rockets, infiltrations, and the capture of soldiers, exacerbating tensions.
The investing world also responded to this attack. Below we highlight a few winning ETF areas amid the Israel-Gaza conflict.
ETF Areas to Win
Energy – United States Brent Oil ETF (BNO - Free Report)
Oil jumped back to toward $90 a barrel after Hamas’ surprise attack on Israel instigated fears of a supply crunch. Both West Texas Intermediate and Brent soared more than 5%, days after crude recorded its biggest weekly decline since March. The chaos in markets will likely be determined by whether conflict spreads to the rest of the Middle East region, as Iran – which is both a key oil producer and a supporter of Hamas – is involved in the picture.
Though chances are high the oil market rally is short-term nature, if Western countries now officially link Iranian intelligence to the Hamas attack, then Iran’s oil exports is likely to face downside risks (read: Top ETF Stories of September to Watch in October).
Gold – SPDR Gold Shares (GLD - Free Report)
Gold is often viewed as a hedge against market risk. The precious metal has been subdued this year thanks to the rising greenback and reduced demand from the major consuming nations like China and India. The metal has seen some strength lately thanks to this market turmoil.
U.S. Dollar – Invesco DB US Dollar Index Bullish Fund (UUP - Free Report)
The U.S. dollar strengthened against most of its major peers as due to the sudden attack by Hamas within Israel. The greenback — seen as a haven in times of crisis — advanced 0.2% versus the euro and pound, while risk currencies such as the Aussie and kiwi slumped. A strong U.S. jobs report also gave a reason to greenback to shoot up as the Fed might enact another interest rate hike this year. The Norwegian krone was the best-performing major currency as oil jumped more than 5%, bolstering the outlook for Norway’s exports.
Yen – CurrencyShares Japanese Yen ETF (FXY - Free Report)
The Japanese currency yen is another asset class which is considered as a safe haven. Despite the bank of Japan’s relentless effort to pursue an easy money policy, yen has gained strength lately. Japanese yen should be under watch as long as the Israel crisis remains in focus.
Volatility – ProShares VIX Short-Term Futures (VIXY - Free Report)
Volatility investments are not meant for long-term traders. Prices for these types of products tend to lose value over time thanks to a contangoed market, and a steep roll cost. However, lately, thanks to broad market issues, volatility products delivered decent returns in the past one month. The ETF tracking the performance of the S&P 500 VIX Short-Term Futures Index – ProShares VIX Short-Term Futures (VIXY - Free Report) is also likely to gain in the short term on the Middle East crisis. In any case, the broader market is under stress due to sticky inflation and higher interest rates.