- Stocks will rally, rather than plunge, if Israel sends troops into Gaza, according to one market veteran.
- “That would be a signal to the market that it’s going to be very sharp, very quick, and then we’re going to be at the end of it,” Tim Anderson said Wednesday.
- Anderson’s view clashes with the consensus on Wall Street, where investors are worried the Middle-Eastern crisis could escalate into a wider conflict.
Wall Street is fretting about Israel launching a ground invasion of Gaza – but one veteran investor thinks it could set the stage for a stock-market rally.
TJM Investments managing director Tim Anderson, who’s been trading for over three decades, said Wednesday that Israeli troops moving into the territory could signal that the conflict in the Middle East is nearing its end, which would help power equities higher.
“The history of these Israeli conflicts… is that they don’t really go on for very long, and I think that the market is on edge here,” he told Fox Business’ “Cavuto: Coast to Coast”.
“It seems a little funny to say it, but when the ground war into Gaza does start, I think that that’s when the market will rally sharply because that would be a signal to the market that it’s going to be very sharp, very quick, and then we’re going to be at the end of it,” Anderson added.
“As long as the market can see the light at the end of the tunnel, it will applaud the beginning of that action.”
Stocks have dipped since Hamas’ first strike on Israel on October 7, with the benchmark S&P 500 index sliding 4% over the past two-and-a-half weeks.
Investors have instead turned to so-called “safe haven” assets that tend to retain their value in times of geopolitical instability, driving up the value of both gold and the US dollar.
Anderson’s view clashes with the consensus on Wall Street, with many investors fretting that a ground invasion raises the risk of the Middle-Eastern crisis spiraling into a broader conflict involving other countries, including Iran.
Benchmark oil prices could surge to $150 a barrel and market volatility could skyrocket in the most severe scenario of an uncontained war between Israel and Hamas, EY chief economist Greg Daco warned earlier this week.
