681 days after the Hamas attack, protests are escalating in Israel as hostage families demand the government halt the war. Cities like Tel Aviv and Jerusalem saw traffic paralyzed by a coordinated "People's Strike" (Folkets streik). Demonstrators, using banners, chants, and burning tires, demanded the government do more to bring hostages home from Gaza. Protests have extended to demonstrations outside the homes of Israeli ministers, with slogans like "Until they return, we are all hostages."

The actions began early Sunday morning and quickly spread across the country. Protesters see the 681 days since the October 7, 2023 attack as evidence of the authorities' continued failure. A recent Hamas propaganda video, showing hostage Eviatar David in a tunnel under Gaza, has sparked strong reactions in Israel and globally. Lishay Miran-Lavy, whose husband remains captive in Gaza, told Haaretz that the protests sweeping Israel this weekend are "just the beginning," stating that families have no other choice but to escalate. Vicky Cohen, mother of soldier and hostage Nimrod Cohen, also called for Israelis to take to the streets to demand a ceasefire and the release of hostages.

The families of hostages and victims from October 7 are behind the "People's Strike" action. They are also demanding the establishment of a state investigative commission to examine how the attack could have happened. The "Hostage and Missing Families Forum" will set up a camp near the Gaza border, where they will stay to continue pressuring the government. They described the government's "cold-bloodedness" as forcing them to "escalate the struggle," warning that "our loved ones are withering away. If we don't bring them home now, we will lose them forever."

Market Signals

Sector Impacts and Opportunities: Ongoing geopolitical tensions may lead to increased defense spending in the region, benefiting defense and aerospace sectors. Simultaneously, companies with business ties to Israel could face increasing challenges.
Price Volatility: Regional instability can cause volatility in energy and commodity markets, impacting businesses reliant on the stability of these markets.
Competitor Positioning Changes: Companies seeking to avoid geopolitical risks may develop strategies to distance themselves from conflict zones, influencing competition in other markets.

Winners & Losers

Winners: Israeli defense sector companies, particularly those involved with military aircraft and related technologies, may benefit from increased government spending. Norwegian energy companies may see continued demand and potentially higher revenues due to their role in European energy security.Losers: Israeli companies, especially those linked to the military or West Bank settlements, face divestments and potential loss of access to capital from Norway's sovereign wealth fund and other Norwegian investors. Businesses with significant exposure in the Middle East may experience heightened operational and financial risks due to regional instability.

Action Timeline

Immediate (24-48h): Review investment portfolios with exposure to Israel or the Middle East, and assess supply chains for potential disruptions.
Short-term (1-2 weeks): Monitor Norwegian government statements and defense spending developments, and prepare for potential shifts in business relations.
Long-term: Evaluate structural changes in international investments based on ethical and geopolitical considerations, and track defense spending trends.

Risk Assessment

Regulatory and Ethical Risks: Norwegian companies operating internationally may face increased scrutiny regarding ethical conduct and adherence to international humanitarian law, mirroring the divestment criteria of the sovereign wealth fund.
Market Volatility: Geopolitical events can trigger volatility in global financial markets, commodity prices, and currency exchange rates, impacting business profitability.
Geopolitical Tensions: The ongoing conflict and broader geopolitical instability in the Middle East pose risks to businesses with operations, investments, or supply chains in the region.

Key Indicators

Signals for Market/Industry: Increasing divestments by sovereign wealth funds indicate a trend toward integrating ethical and geopolitical considerations into investment decisions.
Leading Indicators and Data Points: Companies are monitoring announcements of future divestments by the Norwegian sovereign wealth fund, statements from the Norwegian government, and defense spending trends.

Regional Perspective

In Israel, protests by hostage families are escalating, highlighting growing domestic pressure on the government to end the war. This situation reflects the internal political challenges facing the government, as well as broader regional tensions.

Immediate Implications

What Happens Next: Protests are expected to continue and intensify, increasing pressure on the Israeli government to make decisions regarding a ceasefire and deals.
Time-Sensitive Opportunities or Risks: Companies with operations in the region may experience local market volatility or supply chain disruptions.

What to Watch

Leading Indicators to Monitor: Announcements of future divestments by the Norwegian sovereign wealth fund, statements from the Norwegian government regarding the conflict, and defense spending trends.
Expected Developments: Pressure on the Israeli government is expected to continue, with potential policy shifts towards a ceasefire or negotiations.
Key Decision Points: Decisions by the Israeli government regarding the war, potential negotiations, and hostage-related deals.

Analysis

The escalating protests in Israel, led by hostage families, demonstrate a deep dissatisfaction with the government's handling of the crisis. This internal pressure, combined with international ethical and geopolitical considerations, presents significant challenges for the Israeli government. Furthermore, divestments by the Norwegian sovereign wealth fund signal a global trend of integrating humanitarian concerns into international investment decisions, which could impact Israeli companies and those operating in conflict zones.