Today’s market action in the Middle East can best be reflected by the perceived panic being reflected in the Egyptian stock market and why this might not just be a follow through from Wall Street’s nightmare this past Friday:
If any nation can not afford an expansive conflict between the Arabs, Persians, and Israel with a dash of the US involved, it is definitely Egypt. The economy is in tatters, the revenues from the Suez Canal transits are collapsing thanks to the Houthi selective blockade, and there is still underlying concerns about the Muslim Brotherhood making one more attempt to usurp the current system in Cairo.
Meanwhile in Tel Aviv, the concerns that Intel might shut down or greatly reduce the staff of its plant in Israel along with the constant state of war is starting to wear down investors.
In Saudi Arabia the concerns are of a direct confrontation between the US and Israel with Iran and the Saudis trapped in the middle. Despite US reinforcements being flown into Kuwait and an additional F-22 squadron being moved into the region, the devastation a regional conflict would cause is a major concern to Saudi investors.
The one nation that is trying to play both sides, including hosting terrorist organizations like Hamas, also is feeling a chill from the winds of a possible war.
If a conflict does erupt with the US military involved, the large military base outside of Doha would become a primary target. Qatar only wishes for return to the status quo, however it would appear the actions by Hamas, Hezbollah, and Israel have pushed the region to the brink.
Stay tuned as tonight’s Asian open along with US futures could be very interesting to watch.
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