Under the contract terms, Elbit will deliver these systems over the next eight years, guaranteeing a steady and continuous revenue flow for the company.

The company's stock surged on the Tel Aviv Stock Exchange by more than 6% following the announcement of the deal, with trading volume exceeding 55 million shekels ($15.5 million). The company currently holds a market value of 76.5 billion shekels ($21.6 billion), and the stock has climbed impressively by more than 60% since the year began.

Elbit operates at a price-to-book ratio of 5.4 and a price-to-earnings ratio of 50 – an elevated multiple that captures the company's substantial order portfolio and anticipates future deals. Investors are factoring in the company's growth potential amid aggressive worldwide defense budget expansions.

The contract adds to a string of major agreements Elbit has secured over the past year, largely driven by the evolving global security landscape and sharp increases in defense spending. In Europe, for instance, numerous countries plan to increase their defense budgets to approximately 5% of GDP, generating substantial business opportunities for leading defense industry firms, such as Elbit Systems.

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According to the report from the US, Meta is seeking to raise the funds at a yield 1.4% above the equivalent US Treasury bonds, translating to an annual interest rate of nearly 6%. The proceeds are intended to ramp up investments in data centers, with a particular focus on artificial intelligence infrastructure.

The announcement triggered investor concerns that Meta may be lagging behind in the AI race, prompting fears that it must now catch up with competitors. The steep drop in Meta's stock reflects those worries.

In a late-night earnings call, Meta CEO Mark Zuckerberg said the company planned to be significantly more aggressive in its AI investment strategy over the coming year. His comments appeared to reinforce concerns that Meta is playing catch-up in this rapidly growing sector. Investors are also worried that failure to scale up AI capabilities could ultimately threaten Meta's core business lines.

"We want to make sure we're not underinvesting in AI," Zuckerberg said during the call with analysts, adding that even if it meant taking on new debt, the long-term returns from AI investment would be worth it.

The company also released its latest financial results overnight, showing a 26% jump in quarterly revenue to $51.2 billion. Advertising remained the main driver of revenue, and Meta said it was increasingly using AI tools to optimize ad performance across its platforms.

Still, some investors voiced concerns that overinvestment in computing infrastructure could burden the company. In response, Zuckerberg argued that even if Meta ends up with excess computing power, it could later sell or repurpose it to generate profits.

Regardless, Meta is betting that its advanced computing resources will ultimately boost its bottom line through improved AI-driven advertising efficiency.

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Major indices saw steep declines after the opening bell, falling by nearly 3%. This represents a very steep drop for the major stocks, for which every fraction of a percent entails the liquidation of significant capital. The TA-90 index, the most popular index on the exchange in recent years, is shedding almost 3% and is thereby completing a decline of over 5% since Prime Minister Benjamin Netanyahu's warning on Monday that Israel should brace for international isolation and make sure it won't have to rely on the world for trade, to the point of adopting some autarkic economic postures. Netanyahu's speech was full of pessimism, with warnings that 'Israel is facing diplomatic isolation, we will have to deal with a closed economy," referring to the ongoing attitude by some countries to limit trade with Israel over the war in Gaza. But several hours later, after the surprise among the public in the media, he stressed that he was very optimistic about the prospects of Israel's economy, saying "Israel is the best place to invest" and that he was opposed to Israeli severing its trade ties with the world. "Israel's stock market is the strongest in the world; the shekel has become stronger and the deficit has shrunk despite the war...investing in Israel is the smart thing to do." He said that he meant to sound the alarm to the efforts by Iran and other countries to place an economic siege on Israel, "but we broke free."

In the trading rooms of the large banks, it is said that mutual funds, reflecting the activity of the general public, are particularly active on Tuesday. Sources in the trading rooms indicate that a substantial number of sell orders built up overnight in the mutual funds, and investment managers are liquidating assets to prepare for continued offerings until the afternoon, which is when the window closes for submitting additional sell or buy orders for the day.

At the same time, it is important to note that at this point, there were almost no visible activity from the institutional investors, which typically acquire assets when the public sells them off. In theory, should the declines deepen, an investment opportunity would arise for investment managers, known as "strong hands," but this remains theoretical, as a common adage in the capital market suggests that "one should not attempt to catch a falling knife." The Israeli stock market, despite the almost two-year war since Oct. 7, 2023, has largely outperformed the rest of the world since then.

Insurance stocks were leading the declines at the opening, having already been trading with volatility of late, with Harel's stock dropping by almost 1.5% and Clal Insurance decreasing by more than 1%. The stock of Azrieli, one of Israel's largest shopping mall operators, has also slipped by approximately 1% amid fears of a negative impact on Israelis' purchasing power.

Teva is down 2.4%, extending the stock's recent falls, which are driven by concerns that insurance companies worldwide will, for diplomatic and political considerations, favor recommending prescriptions from rival firms. Conversely, shares of Elbit Systems are up by nearly 1%, based on the belief that for the weapons maker, such days are actually beneficial for business.

In the bond market, price decreases were also noted, aligning with the working hypothesis that mutual funds are accumulating cash Tuesday out of concern for significant redemptions by the end of the day.

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"We may find ourselves blocked not only in research and development, but also in production itself. Our defense industries could be blocked, and we will have to be Athens and super-Sparta, adapting to an autarkic economy. We have no choice. At least for the coming years, we will have to cope with these attempts at isolation, and we must first develop the ability to manage on our own."

Netanyahu's remarks drew two main interpretations. The first is that he was referring to economic resilience – ensuring Israel's economy can sustain itself under extreme conditions. Lessons from the October 7 Hamas massacre and the subsequent war with Iran point to the need for redundancy in critical systems and the ability to maintain essential functions even under massive missile barrages or ground combat. Bank of Israel Governor Prof. Amir Yaron has raised similar points in the past.

The second, more troubling interpretation is that Netanyahu was warning of a potential geopolitical scenario in which Israel could face sanctions. Such measures could severely disrupt Israel's economic and trade ties with the world, a scenario that would have significant consequences not just for Israel but for the global economy as well.

Meanwhile, Finance Ministry Director General Ilan Rom said the overall threat level to Israel had decreased significantly. He criticized what he described as the military's "wasteful" use of reserve duty days, suggesting that the defense establishment must be more efficient in its use of resources.

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In 2024, trade between Israel and the EU reached €42.6 billion, with Israeli exports to the EU totals at about €16 billion.

If Israel's trade agreements with the European Union are indeed reconsidered, Israel's exports worth €16 billion could theoretically be at risk. Trade with EU member states accounts for about one-third of Israel's global commerce, and Israeli exports to the EU include a substantial volume of products for the automotive and chemical industries, among others.

A major challenge for the Israeli economy

In practice, it is difficult to imagine the EU limiting civilian trade with Israel other than by imposing tariffs on imports of Israeli goods, but even that poses a significant challenge for the local economy. Israeli imports from the EU totaled about €27 billion in 2024, and it is unlikely that the bloc would act against its own basic interest in exporting goods to Israel. However, the picture looks different when it comes to imports from Israel into the EU.

For now, it remains unclear exactly what sanctions European Commission President Ursula von der Leyen has announced, and there is no certainty that they will cause significant disruption to Israel-EU trade. However, when it comes to research partnerships, the EU's move carries weight. One notable example is Horizon Europe, a major research initiative in which Israel participates. The program provides funding for Israeli research and links Israel's databases and studies with those of global projects, enhancing the quality and competitiveness of Israeli research.

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Under the agreement, natural gas from Israel's Leviathan reservoir will be sold to Egypt in two phases. The first is expected to begin in the first half of 2026, while the second will commence after the planned expansion of the Leviathan field is completed. The deal is a key step in boosting output from Leviathan, enabling a significant increase in available gas for Israel's domestic market and enhancing Israel's long-term energy security.

Following the announcement, shares of Delek Group and NewMed Energy rose by approximately 4% on the Tel Aviv Stock Exchange.

"NewMed Energy is once again reshaping the rules of the regional energy game," said NewMed CEO Yossi Abu. "Leviathan is a tool for strategic transformation, and I believe this deal will pave the way for additional agreements with more countries in the region."

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"The chief of staff isn't demanding clear orders for nothing," Ram Aminach told Israel Hayom. Aminach, who once served as the IDF's de facto financial advisor and is regarded as one of Israel's foremost experts on military economics, adds: "How you define the military mission is crucial. Each mission dramatically affects budgeting and costs."

Senior officials involved in decision making echoed this sentiment. "This is currently under discussion in the Cabinet. It's a very broad issue and ultimately up to the political echelon. It's not even clear whether they fully understand what all this entails," one senior official tells Israel Hayom.

Crunching the numbers

Initial estimates suggest the military's rush to secure all areas of Gaza where it currently lacks control, driven largely by fears that hostages may be held there, would cost between 10 and 20 billion shekels ($2.9 to $5.8 billion).

But that's just the beginning. The real question is what happens once the tanks stop. This includes holding the territory, clearing it, and addressing the needs of the civilian Gazan population.

"We're talking about incomprehensible costs," said Aminach. "Look at the international pressure Israel faces today and multiply that by five, at the least. To ease that pressure, we'll need to take care of the population in Gaza. No international player is going to help pay for that, not while Israel is seen the way it is right now."

The working assumption is that full control over the Gaza Strip, even without full reconstruction but with Israel taking responsibility for the population, would require a one time cost of 100 billion shekels ($29 billion). This would cover waste removal, basic housing construction, infrastructure for sewage, water, and electricity, and the establishment of healthcare centers.

Beyond the initial spending, the annual cost of maintaining full control over Gaza is estimated at between 60 and 130 billion shekels ($17.4 to $37.6 billion). This includes assuming partial responsibility for the education system, enough to satisfy international scrutiny, full-scale food supply, and stationing IDF divisions with periodic rotation of reservists.

In essence, the largest financial burden would be keeping the IDF in the Strip, to maintain order and ensure troop safety.

The human cost

Aminach also highlighted a major factor often left out of economic calculations: the Defense Ministry's Rehabilitation and Families Department. This agency handles payments to the families of fallen soldiers, medical rehabilitation for the wounded, and lifelong stipends for disabled veterans, a number that continues to grow.

The department currently represents a financial obligation of 120 billion shekels ($34 billion), a sum that will only increase if Israel enters Gaza in full force.

Finally, it's important to note that these figures do not include one critical element: the mission definition. For Finance Minister Bezalel Smotrich and National Security Minister Itamar Ben Gvir, "full sovereignty" means rebuilding Israeli settlements in Gaza. That would add the costs of residential construction, security, and ongoing maintenance for a civilian population, none of which is yet factored into current estimates.

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Fischer, whose Hebrew name was Shlomo Ben Pesach Hacohen, was born in Northern Rhodesia (now Zambia) and grew up in Southern Rhodesia. In his youth, he was active in the Habonim Dror movement, and his connection to Israel remained a constant throughout his life.

His academic career began at the London School of Economics, followed by a doctorate from MIT, where he later became a professor and chaired the economics department. Among his students was Ben Bernanke, who went on to serve as Federal Reserve chairman and win a Nobel Prize. In the 1980s, Fischer contributed to Israel's economic stabilization plan as part of an American advisory team.

Fischer held prominent global positions, including deputy managing director of the IMF, chief economist of the World Bank, and vice chairman of Citigroup. His work in these institutions faced scrutiny, notably from Nobel laureate Joseph Stiglitz, who criticized Fischer's independence in Globalization and Its Discontents due to his ties to the US government.

In May 2005, Fischer moved to Israel to lead the Bank of Israel for eight years. During his tenure, a new law broadened the governor's authority, a change Knesset member Shelly Yachimovich said was designed around Fischer's exceptional leadership. Both Global Finance and Euromoney named him among the world's top central bank governors, and in 2013, he was awarded the Herzog Prize for his contributions to Israel.

Amid the eurozone crisis, Fischer cautioned that Israel's economy faced potential challenges but commended the fiscal discipline of Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz. "They will enable us to manage the economy in a way that supports continued growth," he stated. In 2011, he sought the role of IMF chairman but was ruled ineligible due to age limits.

After leaving Israel, Fischer served as vice chairman of the Federal Reserve under Janet Yellen from 2014 to 2017. He briefly joined Bank Hapoalim as a director, stepping down in June 2021 for personal reasons.

Fischer lived in Herzliya. His wife, Rhoda Fischer, whom he met in the youth movement, died in 2020. He later formed a relationship with Dr. Anna Krassiko-Trev. His three sons reside in the United States: Michael Fischer is a doctor, David Fischer was vice president of marketing at Facebook, and Jonathan Fischer leads the production company Groundswell. In 2014, Fischer's wealth was estimated between 14 million dollars and 56 million dollars (44 million shekels to 176 million shekels).

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Gold is traditionally considered a "safe haven" for investors worldwide, and some view it as a hedge against inflation. Demand for gold remains relatively stable, and here we're talking about the real economy - Main Street. Gold is the most efficient natural conductor of electricity, which means it's found in every smartphone and nearly every electronic device.

Why is it considered a safe haven? Essentially, as long as the world operates within familiar terms - demand for electronics, chips, computers, and the like - there will be a consistent need for gold. Why a hedge against inflation? Because as demand for electronics and electrical conductors grows, gold prices tend to rise accordingly. At least theoretically, the price of gold should rise in tandem, or at the very least keep pace.

To get a sense of gold's role in the tech world, one need only look at Apple's ESG reports. The company details its gold recycling efforts - your trade-in device gets dismantled, and the materials, including gold, are reused. This process saves Apple tens of millions of dollars each year, around $50 million annually.

Now add to that the rest of the phone manufacturers, computer makers, and semiconductor producers, and you get an ever-growing demand for gold as a conductor. And this is without considering gold's role as a "tradable currency" in large parts of the world - India, China, and Africa, for instance. What emerges is an asset tied to growth, inflation, or any factor that reflects the pace of the real economy.

In any case, when financial markets become volatile and investment decisions harder to make, one of the more reasonable strategies is to turn to commodities - and here, gold takes the spotlight. At least in theory.

If we examine who's investing in gold, it's unlikely we'll find major institutional players like pension funds. Who will we find? Hedge funds and speculators. When we talk about gold, we're talking about the world's biggest speculators, and that means a lot of money is in play.

Analysts covering the commodities market have told international financial outlets that the gold rally since the start of the year is seen as an alternative to exposure in stocks or traditional bonds. In recent days, those looking to take a "time-out" from market volatility have turned to gold. But again, this is just the economic theory explaining the sharp rise in gold prices this year.

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Trading analysts explained the dollar's behavior this morning as follows: Trump's "ambush" meeting with Netanyahu gave the impression that Trump had pulled a "Zelensky move" on the Israeli prime minister. If previously one might have expected a deal to dismantle Iran's nuclear capabilities to reduce Israel's risk premium, the current sentiment is the opposite - that Netanyahu's government could end up complicating relations with the supportive US administration.

What does this mean? For now, it suggests that Israel's risk profile has actually increased, since Trump has shown no intention, at least for the moment, of removing tariffs on Israel. On the contrary, he appears to be moving toward a deal with Iran over Israel's head, as if Netanyahu were Zelensky and Israel were Ukraine.

It is unclear how these developments will impact internal dynamics within Netanyahu's government. However, given the lack of confidence in Israel's economy under the current administration, the risk of someone making a wrong move is perceived as greater than the likelihood of a right one. This has led investors to one conclusion: pull back from Israel for a while.

Attempting to impose some economic logic on the chaos, some analysts suggest the following interpretation: new long-term opportunities have emerged in the US market, making it more feasible to start taking risks there.

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