Russia's Wagner Group Reportedly Aligns With Hezbollah, IDF Gains Ground In Gaza City Ahead Of Blinken's Middle East Visit

Russia’s Wagner Group is reportedly considering supplying an air defense system to the Lebanese militant group Hezbollah, marking a potentially game-changing development in the war between Israel and Hamas.

The Wall Street Journal reported Thursday that American intelligence agencies are closely monitoring ongoing conversations between Wagner and Hezbollah. Unnamed U.S. officials told the Journal the Russian mercenary organization might be contemplating the transfer of the SA-22 system to Lebanon.

Sources from South Korea’s intelligence agency also told the WSJ that North Korean leader Kim Jong Un has given instructions to support the Palestinian cause and is exploring the possibility of selling arms to militant groups operating in the Middle East.

In recent hours, rocket launches from Lebanon into Israel have intensified, resulting in multiple Hezbollah rockets striking the city of Kiryat Shmona.

The Times of Israel reported that Israel Defense Forces spokesman Rear Adm. Daniel Hagari announced that Israeli ground forces have successfully encircled Gaza City. When questioned about the potential for a ceasefire, Hagari responded that the term “ceasefire” is not under consideration.

Israeli ground forces have engaged in clashes within the northern Gaza Strip, leading to the killing of approximately 130 terrorists in the last few hours, according to the IDF.

U.S. Sen. Dick Durbin (D-Illinois) has become the first U.S. senator to express support for a ceasefire in Gaza, emphasizing the importance of including the release of all hostages held in the Hamas-controlled enclave as part of any agreement.

U.S. Secretary of State Anthony Blinken is preparing to embark on a trip to Israel, Jordan, Japan, South Korea and India, with the primary focus being discussions on measures that Israel can and should take to minimize civilian losses, according to a CNN report.

President Joe Biden announced from the White House that Washington’s diplomatic efforts have enabled 74 American citizens and their families to depart from Gaza safely.

According to Al Jazeera, Israeli airstrikes have resulted in the loss of at least 29 lives and the injury of numerous individuals during the third attack on the Jabalia refugee camp in as many days. Additionally, an attack on the Bureij refugee camp has claimed the lives of at least 15 people.

A group of UN experts has issued a stark warning, highlighting the Palestinians’ “grave risk of genocide” as Israel continues its relentless bombardment of Gaza.

During an artificial intelligence summit in London earlier today, U.S. Vice President Kamala Harris held a meeting with UN Secretary-General António Guterres, where she reiterated Israel’s right to self-defense following the Oct. 7 Hamas terrorist attack. She also stressed the critical importance of upholding international humanitarian law in the ongoing conflict.

Market Reactions

On Thursday, the Israeli shekel (ILS) showed a 0.3% gain against the U.S. dollar, marking its second consecutive day of appreciation.

Israeli stocks experienced a notable rally, with the iShares MSCI Israel ETF EIS surging by 2.7%, positioning itself for a fourth consecutive day of gains.

Cathie Wood‘s ARK Israel Innovative Technology ETF IZRL displayed remarkable strength, posting a 3.4% increase and heading for its most successful session this year.

The U.S. dollar continued to face losses during afternoon trading in New York, with the Invesco DB USD Index Bullish Fund ETF UUP declining by 0.5%.

Yields on long-term U.S. Treasury bonds, particularly those with a 30-year maturity, witnessed a notable drop of over 11 basis points, settling at 4.81%. This development led to a 2.1% rally in the iShares 20+ Year Treasury Bond ETF TLT.

The gains in the U.S. stock market were widespread, with the equal-weighted S&P 500, tracked by the Invesco S&P 500 Equal Weight ETF RSP, surging by 2.2%. This performance outpaced the cap-weighted SPDR S&P 500 ETF Trust SPY, which saw a more modest increase of 1.8%.