Israel-Hamas war shoots defense stocks and oil prices higher

The Israel-Hamas war shook financial markets on Monday, with concerns of growing Middle East conflict pushing defence and oil stocks higher.

Hamas militants on Oct. 7 surged into Israel from the Gaza Strip in a surprise attack, during which hundreds of Israelis were killed or taken hostage. In response, Israel declared war on Hamas and began retaliatory strikes on Gaza, also killing hundreds. Fatalities on each side have topped more than 1,000.

U.S. defense stocks jumped, along with energy stocks like Occidental Petroleum and Marathon Oil, while travel stocks slipped as companies canceled flights to Israel.

Lockheed Martin (LMT:NYSE) shares finished 10.06% higher

Rising oil prices lifted energy shares.

Brent crude futures, the global oil benchmark, logged their biggest daily gain since April, rising 5.7% to close at $90.89 a barrel. Energy producers APA Corporation (APA:NASDAQ) and Marathon Oil (MRO:NYSE) posted weekly gains of 9.7% and 14.5% repectively. Diamondback Energy (FANG:NASDAQ), which drills in West Texas’s prolific Permian Basin, climbed 10.14% to a new all-time high.

The Israel-Hamas conflict has ratcheted up concerns that the fighting may affect regional energy production. The Middle East accounts for more than one third of global seaborne trade.

Fed rate hikes helps Wall Street banks rake in profits.

U.S. banks on Friday reported better-than-expected earnings, with JPMorgan (JPM:NYSE) posting a 35% rise in its third-quarter profit.

BlackRock’s (BLK:NYSE) profit rose in the third quarter from a year ago, despite the overall market slump that weighed on flows to its investment products. Citigroup’s (C:NYSE) profit and revenue both rose, topping expectations in its third quarter.

Banks have continued to benefit from the Federal Reserve’s rapid increase in interest rates, charging more on loans while increasing payouts for deposits more slowly.

JPMorgan shares rose 3.6% for the week, while Citi and Wells Fargo finished the week 3.06% and 4.38% higher, respectively. Shares of Blackrock declined 2.3%

After 20 months, Microsoft closes acquisition of Activision Blizzard

After 20 months of regulatory stalling, Microsoft (MSFT:NASDAQ)has closed its $69 billion acquisition of video game publisher Activision Blizzard (ATVI:NASDAQ).

The acquisition is the software company’s largest deal in its 48-year history and comes after the company quelled concerns about competition from U.K. and European regulators and gained a favourable ruling from a U.S. district judge.

The U.K.’s Competition and Markets Authority gave its nod to the deal earlier Friday, clearing the way for the close.

The deal, announced in January 2022, gives Microsoft a hefty portfolio of video game franchises, including Call of Duty, Crash Bandicoot, Diablo, Overwatch, StarCraft, Tony Hawk Pro Skater, and Warcraft.

Shares of both Microsoft and Activision Blizzard posted modest gains of 0.14% and 0.24% respectively,or the week

PepsiCo beats Q3 expectations

PepsiCo beat expectations for its third-quarter earnings and raised its full-year guidance after shoppers digested higher prices for Doritos, Lay’s, and Gatorade.

Investors are watching for signs of consumers cutting back spending amid inflation exhaustion and rising interest rates. Chief Financial Officer Hugh Johnston said on a conference call Tuesday that PepsiCo expects consumers to remain cautious as some trade down to cheaper items.

PepsiCo shares fell 0.18% for the week.

Domino’s beats profit, but sales weaker from a year before

Despite a profit beat, Domino’s Pizza Inc. (DPZ:NYSE) posted weaker-than-expected revenue for its third quarter as inflation-weary consumers pulled back on ordering pizza.

The pizza chain posted revenue of $1.03 billion, which was down almost 4% from a year ago as U.S. same-store sales and supply-chain revenue, from selling pizza-making ingredients to its franchisees, fell.

Sales at company-owned U.S. restaurants fell more than 23% from a year ago to $86.3 million, dragged down by lower order volumes. Those at franchised locations fared better, rising 7% to $138.3 billion.

Domino’s shares finished the week 1.54% higher