Morning Brew - ☕ The outbreak of war

Why the Israel-Hamas war will reverberate...
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October 09, 2023 View Online | Sign Up | Shop 10% Off

Morning Brew

Masterworks

Good morning. Today is Columbus Day and Indigenous Peoples Day, which President Biden commemorated as a national holiday for the first time in 2021 and has become widely adopted around the US. Depending on where you live, your state or city might recognize one of the two holidays, both, or something else entirely.

As is the case with the 10 other federal holidays on the calendar, most banks will be closed, and the USPS won’t deliver mail.

Neal Freyman, Dave Lozo

MARKETS: YEAR-TO-DATE

Nasdaq

13,431.34

S&P

4,308.50

Dow

33,407.58

10-Year

4.804%

Bitcoin

$27,933.90

Oil

$86.06

*Stock data as of market close, cryptocurrency data as of 10:00am ET. Here's what these numbers mean.

  • Markets: Investors will be focused on the outbreak of war in Israel and Gaza, which could lead to volatility in global stock markets and oil prices, depending on the escalation of the conflict. US oil futures jumped as much as 5.4% last night. Later in the week, the consumer price index report will give an update on the Fed’s fight against inflation.
 

INTERNATIONAL

Israel at war with Hamas

Military vehicles are seen after Palestinian militants launched more rockets at Israeli border towns on the second day of the ongoing conflict between Israel and the Palestinian militant group Hamas Ilia Yefimovich/picture alliance via Getty Images

Israel is at war with Hamas after the terrorist group launched a surprise attack from Gaza into Israeli territory on Saturday morning, the Jewish Sabbath and a major holiday.

In the attack, militants broke through the border fence, stormed into Israeli towns, and fired on civilians, including attendees of an outdoor music festival, where 260 people were massacred. In total, more than 700 Israelis were killed by Hamas militants, and over 100 civilians and soldiers were taken to Gaza as hostages—children, the elderly, and American citizens among them, according to US and Israeli officials.

In response, Israeli Prime Minister Benjamin Netanyahu declared war on Hamas and retaliated with airstrikes that have killed at least 493 Palestinians, including 91 children, per Palestinian health officials. Israel, which, along with Egypt, maintains a blockade of Gaza, cut the flow of power, goods, and fuel to the territory Saturday night.

Hamas is an Islamist militant group that has been deemed a terrorist organization by the US and the EU. It seized control of Gaza in 2007 after Israel withdrew, and the two sides have fought several wars since—but Saturday’s attack was the biggest incursion Israel has experienced since the Yom Kippur War almost exactly 50 years ago.

The world reacts:

  • President Biden and other Western leaders condemned Hamas’s terrorist attack and reiterated Israel’s right to defend itself. The US directed an aircraft carrier strike group to the Eastern Mediterranean to support Israel’s counteroffensive, if necessary.
  • Iran praised Hamas, a group it has long backed with weapons and technology. The country’s Islamic Revolutionary Guard Corps helped plan Saturday’s attack beginning in August and gave Hamas the go-ahead last Monday, the WSJ reported.

The big picture

Foreign policy experts said Hamas’s sophisticated attack on Israel represented the country’s 9/11 or Pearl Harbor moment—a stunning failure of the country’s vaunted intelligence program that will impact its politics and society for decades to come.

The attack will also have seismic ramifications in the Middle East. It is widely believed that Hamas and Iran plotted it to derail a US-led effort to normalize relations between Israel and Saudi Arabia. Israel has established diplomatic and economic links with a number of its former enemies in the region in the past several years. One of those countries, the UAE, criticized Hamas for its “serious and grave escalation.”

What happens next? Netanyahu warned of a “long and difficult war” ahead, one that will likely result in a massive military response in Gaza and be shaped by the hostage crisis.

Stay in the know:

  • Major airlines, including United, American, and Delta, temporarily suspended flights to and from Tel Aviv.
  • Loads of misinformation spread on X and TikTok as the attack unfolded.
  • Cities in the US and Europe have boosted security at Jewish holy sites.
     

WORLD

Tour de headlines

The US Capitol Building in Washington, DC. Mikhail Makarov/Getty Images

Urgency to choose a House speaker grows. Republicans are hoping to choose a new House speaker this week in an effort to restore order in Congress after Israel declared war against Hamas this weekend. The House cannot pass legislation without a speaker—and the Biden administration’s hands are tied when it comes to providing additional assistance to Israel—while the role of Speaker Pro Tempore Patrick McHenry remains unclear regarding national security meetings. The two leading contenders to replace ousted Kevin McCarthy appear to be Ohio’s Jim Jordan, who received an endorsement from Donald Trump, and Louisiana’s Steve Scalise. A vote is expected to take place on Wednesday.

Hackers target 23andMe. More than 7 million 23andMe customers were the victims of a data breach, with the hackers specifically targeting users of Ashkenazi Jewish ancestry. The data includes users’ names, profile photos, genetic ancestry results, date of birth, and geographical location. The hackers are attempting to sell the data, asking for between $1 and $10 per account, depending on how many accounts a buyer wants to purchase. How’d they do it? By “credential stuffing”—acquiring the login credentials from one site and using them on other sites in order to gain access to sensitive information. 23andMe reported the incident to law enforcement and is asking all customers to change their passwords and use two-factor authentication.

Alexa, who won the 2020 election? Alexa, the voice assistant from Amazon that’s in an estimated 70 million homes, has been falsely telling users the 2020 election was rigged, the Washington Post learned. Alexa has said incorrectly that Joe Biden’s presidential victory over Donald Trump was “stolen by a massive amount of election fraud” and that Trump won Pennsylvania. An Amazon spokesperson said these were isolated incidents that were quickly fixed. However, even after the WaPo brought these issues to the attention of Amazon, Alexa was still answering questions about the 2020 election with fake news.

PRESENTED BY MASTERWORKS

Painting nets $8 million…everyday investors profit

Masterworks

When a painting by master Claude Monet (you may have heard of him) was bought for $6.8 million and sold for a cool $8 million just 631 days later, investors in shares of the offering received their part of the net proceeds.

That’s all thanks to Masterworks, the award-winning platform for investing in blue-chip art. To date, every one of its 16 sales from its portfolio has returned a profit to investors. With 3 recent sales, Masterworks investors realized net annualized returns of 17.6%, 21.5%, and 35%.

Shares of every offering are limited, but Morning Brew readers can skip the waitlist with this exclusive link.

TECH

Technology levels the football field for deaf players

Gallaudet University football player AT&T

Gallaudet University, a school for students who are deaf or hard of hearing in Washington, DC, deployed a unique football helmet in a game Saturday that allowed communication with coaches like never before. Thanks to an augmented reality screen inside his helmet, the quarterback was able to see plays relayed by coaches via a tablet as opposed to the customary hand signals.

While the NFL allows for communication devices in the helmets of select players, the NCAA does not permit any radio equipment in helmets—but approved the helmet for use in one game as a trial. The helmets and their 5G technology could help reduce injuries resulting from deaf players continuing the action because they did not hear a whistle.

Earlier in the week, an NCAA spokesperson said officials “look forward to seeing the results of this new technology,” which was developed through a partnership between AT&T and Gallaudet.

So far, so good. Division III Gallaudet defeated Hilbert College, 34–20.

Gallaudet has a history of football innovation. The university is already credited with pioneering a football communication advancement: the huddle. In 1894, quarterback Paul Hubbard was worried an opposing team would see him using sign language, so he gathered his team in a tight circle formation to relay the play call.

     

CALENDAR

The week ahead

Lays potato chips Creative Touch Imaging Ltd./NurPhoto via Getty Images

Earnings season is back: PepsiCo, Delta, Dominos, and big banks headline the start of earnings season, one that will have investors looking at how slowing inflation has affected the ability of companies to pad their profit margins. Pepsi’s report will be closely watched as its snack division, Frito-Lay, could be tested by the increasing popularity of weight-loss drugs like Wegovy. Major banks like JPMorgan are expected to post strong results.

The Eras Tour movie arrives: Taylor Swift: The Eras Tour hits theaters around the world on Friday the 13th after selling a staggering $100+ million in advance tickets globally. Should Swift’s movie break the $100 million mark in North America this weekend, it would be just the sixth movie to do so in 2023, and it would surpass Miley Cyrus’s Best of Both Worlds as the highest-grossing concert film ever.

Ellison to testify in SBF trial: Sam Bankman-Fried’s criminal fraud trial enters its second week. Caroline Ellison, the former CEO of SBF’s hedge fund, Alameda Research, and his former girlfriend, is expected to testify as the star witness as soon as tomorrow.

Everything else…

  • Sports fans really can have it all this week. The feast includes MLB playoffs, the WNBA finals, the Rugby World Cup, the Cricket World Cup, and the start of the NHL regular season.
  • Birkenstock is planning to start trading publicly on Wednesday.
  • Syzygy alert: A “ring of fire” solar eclipse will be visible on Saturday in parts of the Western US.
  • Saturday Night Live returns for its first show since the writers strike began. Pete Davidson will host with musical guest Ice Spice.

TOGETHER WITH IMPACT.COM

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GRAB BAG

Key performance indicators

Man with bear smiling up from his computer, holding a mug ImgFlip

Stat: US consumer spending has remained surprisingly strong despite rising interest rates, and a senior spending spree could explain it. According to the Department of Labor, Americans aged 65 and older accounted for 22% of consumer spending last year, the highest percentage since records began in 1972. It also helps that 17.7% of the US population is 65 and older, the highest on record dating to 1920. Better health, longer lifespans, and changes in attitude toward saving for a rainy day after the pandemic have boomers feeling OK about their finances.

Quote: “That is a very tragic amount of birds to find dead at all, especially from one building.”

That’s Annette Prince, director of Chicago Bird Collision Monitors, responding to ~1,000 birds being killed in one night after they collided with the city’s McCormick Place Lakeside Center during fall migration. Birds rely on the moon and stars to travel, and bright lights at night from glass structures like McCormick Place throw off their navigation. Birds often can’t perceive the glass and think they can fly straight through. Chicago passed an ordinance in 2020 requiring all new buildings to be designed with bird-safe features, but it’s yet to be implemented.

Read: How author Michael Lewis got a backstage pass to the fall of Sam Bankman-Fried. (The Guardian)

NEWS

What else is brewing

  • California Governor Gavin Newsom vetoed a bill that would make his state the first to explicitly ban caste discrimination, calling it “unnecessary” because existing laws already cover it.
  • More than 2,400 people were killed by an earthquake in western Afghanistan, the Taliban said.
  • Employees at hundreds of Walgreens stores in the US could walk off the job today to protest high-stress working conditions, CNN reports.
  • The Powerball jackpot climbed to $1.55 billion after (once again) no one won the prize in Saturday’s drawing.
  • Kenyan runner Kelvin Kiptum broke the record in the men’s marathon with a time of 2:00:35 in Chicago. It was only his third competitive marathon.

RECS

Monday to-do list image

List: The Hollywood Reporter ranks this century’s 50 best TV shows. We don’t think about No. 1 at all.

Learn: Native Land Digital maps indigenous lands to teach people about territories, treaties, and colonialism across the world.

Watch: The Michelangelo of Microsoft Excel.

Browse: The best mice and mouse pads for gamers.

Sleep soundly: Natrol’s 10mg melatonin gummies help you fall asleep faster and stay asleep longer†. Make the most of your zzz’s.*

*A message from our sponsor.

GAMES

The puzzle section

Turntable: There’s just one vowel among the seven letters in today’s Turntable. How creative can you get to find the 31 hidden words? Find out here.

International sports trivia

As we mentioned in the Week Ahead section, the Cricket World Cup and the Rugby World Cup are currently taking place. There are four countries pulling double duty and competing in both events. Can you name the four?

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ANSWER

England, Australia, New Zealand, and South Africa.

Word of the Day

Today’s Word of the Day is: syzygy, meaning “an alignment of three celestial objects, as the sun, the Earth, and either the moon or a planet.” Thanks to Jane from Hawaii and many others for the suggestion. Submit another Word of the Day here.

✢ A Note From Masterworks

Past performance is not indicative of future returns. Investing involves risk. See disclosures at masterworks.com/cd.

✤ A Note From Natrol

†These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease.

         
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