Influence of Hamas Conflict on Post-3-Day Weekend Market Turbulence? Check Economic Indicators Now

■ Hamas Conflict and GAFAM+T 3Q Earnings

The Israel-Hamas conflict is expected to cause a surge in oil prices and market turmoil in Western countries.

Additionally, the third-quarter earnings reports of major American companies, collectively known as “GAFAM+T” (Google, Apple, Facebook – now Meta Platforms, Amazon, Microsoft, and Tesla), are approaching in the latter half of October.

(Note: Amazon and Apple’s earnings reports are on November 2nd.)

In Japan, tomorrow is Sports Day, and the markets will be closed. It’s a public holiday, and some markets will not be open for trading.

Now is the time to gather information about the upcoming economic indicators for both Western countries and Japan, in light of the Israel vs. Hamas conflict, as well as touching upon the diplomatic issues between the United States and Saudi Arabia.

There’s a possibility that a situation could emerge resembling the alignment of the United States and Israel against Hamas and Middle Eastern countries.

Below are details of economic indicators from the 9th of October onwards.

■　October 9th (Monday)

Domestic Economy: The domestic market will be closed on this day due to the celebration of Sports Day, resulting in the closure of some markets and no trading activity.

International Economy: In the United States, Columbus Day will result in the closure of the U.S. bond market and foreign exchange market.

In Taiwan and South Korea, Hangul Day will be celebrated, leading to market closures. On the other hand, Germany will release its August industrial production data, and the IMF and World Bank Annual Meetings will be held in Morocco.

■　October 10th (Tuesday)

Domestic Economy: Significant economic indicators related to Japan’s domestic economy will be announced.

These include the international balance of payments data for August, the status of monthly securities transactions for both foreign and domestic securities for August, the dynamics of specific service industries for August, and the results of the September Economy Watchers Survey.

International Economy: In the United States, August wholesale sales data will be released, and there will be an auction of 3-year bonds.

Furthermore, the IMF will announce its World Economic Outlook. Overseas, companies such as PepsiCo in the United States and LVMH in Europe will report their earnings.

■　October 11th (Wednesday)

Domestic Economy: In Japan, the focus will be on September machine tool orders data, and there will be an auction of 5-year bonds.

International Economy: Germany will release its consumer price index for September (confirmed value), and in the United States, the MBA Mortgage Applications Index and the wholesale price index for September will be announced. Additionally, the minutes of the FOMC (Federal Open Market Committee) meeting held on September 19-20 will be disclosed.

There will also be an auction of 10-year bonds in the United States. Overseas, Tata Consultancy Services in India will report its earnings.

■　October 12th (Thursday)

Domestic Economy: In Japan, the domestic corporate price index for September will be released, and August machinery orders data will be closely watched.

Data on office vacancy rates in central Tokyo will also be announced. Additionally, the “Japan Open” golf tournament will be held in Osaka.

International Economy: The market will be closed in Brazil, while the UK will release its GDP data for August. In the United States, the consumer price index for September will be closely watched, along with weekly initial jobless claims, weekly petroleum inventory statistics, and monthly fiscal balance data for September.

The G20 Finance Ministers and Central Bank Governors Meeting will be held in Morocco, and there will be an auction of 30-year bonds in the United States. Overseas, companies such as Delta Air Lines, Walgreens in the United States, and Infosys in India will report their earnings.

■　October 13th (Friday)

Domestic Economy: In Japan, there will be an Option SQ (Special Clearing) and the M2 money stock data for September will be released.

Additionally, data on the status of weekly foreign and domestic securities transactions and surveys on consumer attitudes toward life will be announced.

There will also be a report on monthly investment trusts for September.

International Economy: The market will be closed in Thailand, and China will release its consumer price index and producer price index for September.

In the Eurozone, August industrial production data will be published, and in the United States, the import and export price indices for September and the University of Michigan Consumer Sentiment Index for October will be closely watched.

Furthermore, data on China’s trade balance for September will be released. Overseas, companies such as UnitedHealth, JP Morgan Chase, Citigroup, and Wells Fargo in the United States will report their earnings.

■　October 14th (Saturday)

International Economy: General elections will be held in New Zealand. There are no notable events related to economic indicators.

■　October 15th (Sunday)

International Economy: General elections will be held in Poland, and the International Olympic Committee (IOC) General Assembly will take place in Mumbai. There are no notable events related to economic indicators.

■ Biden Administration’s Middle East Diplomacy and the Palestinian Issue

The Biden administration aimed to resolve the Palestinian issue through the normalization of relations between Israel and Saudi Arabia in its Middle East diplomacy.

However, the recent large-scale conflict between the Islamic fundamentalist organization Hamas and Israel has made this goal more challenging.

President Biden approached his foreign policy with the goal of securing diplomatic achievements and promoting stability and peace in the Middle East. However, the reality has proven to be challenging.

Background of Biden Administration’s Foreign Policy

The central focus of the Biden administration’s Middle East foreign policy was to promote the normalization of relations between Israel and Saudi Arabia.

This normalization was seen as an ambitious effort that also considered the eventual realization of a “two-state coexistence” between Israel and Palestine.

In September 2023, President Biden met with Israeli Prime Minister Netanyahu and urged concessions in the Palestinian issue as a condition for peace with Saudi Arabia.

In the same month, he secured the release of five American citizens detained in Iran in exchange for the release of an Iranian held in the United States and the unfreezing of some Iranian assets abroad.

Furthermore, discussions were underway for a security treaty between the United States and Saudi Arabia.

These diplomatic efforts led to speculation early in the year that a “major deal in the Middle East” was in the works, with an optimistic atmosphere within the administration that “today’s Middle East is more peaceful than the past 20 years.”

However, the large-scale attack by Hamas has led to unexpected results.

Max Boot, a columnist for The Washington Post, warned, “The attack is spreading in an unpredictable direction, much like the September 11, 2001, attacks.”

If the conflict prolongs, President Biden may be pressured to increase arms supplies to Israel.

Experts in Middle Eastern affairs believe that the merits of normalization for both Israel and Saudi Arabia have evaporated in the current situation.

Former President Trump, who announced his candidacy for the U.S. presidential election, criticized President Biden for being “soft” on Iran, claiming that Biden’s actions in the prisoner exchange with Iran prompted Hamas to launch its attacks.

In this challenging diplomatic landscape, how will the Biden administration address the Middle East issue? This will be discussed in detail in the next chapter.

■ Iran’s Influence and the Perceived Weakness of the Biden Administration

One of the diplomatic challenges the Biden administration faces is Iran’s influence.

Iran influences the Middle East situation through its relationship with Hamas, and the Biden administration has been criticized by the opposition Republican Party for being “soft” on Iran.

Iran’s support for Hamas is seen as part of its exertion of influence in the Middle East. Iran provides weapons and funds to Hamas to pursue its strategic objectives in the Middle East. As a result, Hamas follows Iran’s directives, becoming a destabilizing factor in the Middle East situation.

Former President Trump, a candidate for the U.S. presidency, criticized President Biden, alleging that Biden’s “soft stance” led to Hamas’s attacks, exposed through the “prisoner exchange” with Iran.

Former President Trump maintains a position that pressure should be increased on Iran without engaging in dialogue and has openly expressed his opposition to President Biden’s policies.

How will the Biden administration advance its relationship with Iran and contribute to stability in the Middle East? This will be discussed in the next chapter, focusing on the prospects and challenges of Middle East diplomacy.

■ Prospects and Challenges of Middle East Diplomacy

In Middle East diplomacy, current developments and future prospects are of utmost importance.

While the Biden administration continues its diplomatic efforts to promote stability and peace in the Middle East, it faces numerous challenges.

If the conflict persists, the Biden administration may be pressured to increase arms supplies to Israel.

The instability in the Middle East situation could lead to increased pressure from both domestic and international sources on U.S. Middle East policy, making diplomatic solutions more difficult.

Furthermore, the perceived benefits of normalization have diminished.

Israel and Saudi Arabia had intended to pursue mutual interests through normalization, but the current situation has reduced those benefits and dampened enthusiasm for diplomatic progress.

The Biden administration must address these challenges and continue its diplomatic efforts to achieve stability and peace in the Middle East.

The uncertain nature of the Middle East situation could increase international economic instability and reduce the motivation of companies and investors if uncertainty escalates. Such uncertainty could negatively impact economic growth and lead to market instability.

Therefore, while striving for stability and peace in the Middle East, the Biden administration needs to remain attentive to economic indicators.

The realization of stability and peace in the Middle East has the potential to contribute to economic stability, emphasizing the importance of harmonizing foreign and economic policies.

■ Future Outlook and Leadership

International leadership and cooperation are essential for achieving stability and peace in the Middle East.

Major nations need to collaborate and establish frameworks to support stability and peace in the Middle East.

It is crucial for key countries, including the United States, to unite and seek diplomatic solutions to the Middle East situation.

Promoting diplomatic solutions is also a vital aspect. The Middle East situation is complex and multifaceted, and many aspects cannot be resolved through military means alone.

Through diplomatic dialogue and cooperation, a path towards stability and peace in the Middle East must be explored.

To fulfill this mission, the Biden administration needs to harmonize its foreign policy and economic policy and move forward towards a hopeful future for the Middle East.

■ Conclusion

The Biden administration faces numerous challenges in Middle East diplomacy, but it is determined to work towards stability and peace in the Middle East.

Factors such as Iran’s influence, the impact on economic indicators, international cooperation, and more are influencing the Middle East situation.

The Biden administration must address these challenges and demonstrate leadership to achieve stability and peace in the Middle East.

The outlook for the Middle East situation remains uncertain, but with international cooperation and diplomatic efforts, there is the potential to build a brighter future.