Core Viewpoint - Despite the ongoing conflict and missile attacks, the Israeli market is thriving, with the TA-125 index reaching new historical highs and showing resilience compared to global markets [1][4][5] Group 1: Market Performance - The TA-125 index has seen a continuous rise, with an increase of approximately 8% since the outbreak of conflict on October 7, 2023, while the S&P 500 has slightly declined [7] - The total return of the TA-125 index from the onset of the Gaza conflict to June 12, 2023, was about 46%, outperforming the S&P 500's 40% increase during the same period [5] - Local investors in Israel are showing confidence, with the market remaining stable even after significant military actions, indicating a pattern of quick rebounds following initial declines [5][6] Group 2: Investor Sentiment - Israeli investors have developed a familiarity with conflict, often viewing wartime conditions as buying opportunities rather than reasons to sell [5][6] - The recent market uptrend suggests that investors are not only buying on dips but are also willing to chase higher prices, indicating strong bullish sentiment [6] - Analysts believe that local investors are betting on the weakening of Iranian influence in the region due to Israeli military actions, which has contributed to the market's positive performance [7][8] Group 3: Economic Resilience - Despite the ongoing military mobilization and conflict, Israel's economy has shown remarkable resilience, with a low unemployment rate near 3% and continued economic growth [5][8] - The chief economist at IBI Investment Company noted that while the budget deficit has widened, the overall economic stability remains intact [5] - The changing security landscape around Israel has led to a decrease in perceived geopolitical risk, potentially paving the way for increased foreign investment once the situation stabilizes [8][10] Group 4: Long-term Considerations - There are concerns regarding the sustainability of the current military actions, with estimates suggesting that the conflict could be costly, potentially limiting Israel's ability to engage in prolonged warfare [9][10] - The former governor of the Bank of Israel highlighted that the economic impact of the conflict will largely depend on its duration, with short-term engagements being manageable but longer conflicts posing significant challenges [10] - Unresolved issues related to the Palestinian conflict and the potential for Iran to rebuild its nuclear program remain long-term risks for the Israeli market [10][11]