In one of his last acts as PM, Sir Keir Starmer’s long-awaited DIP – Defence Investment Plan – has been released in time for the NATO summit in Turkey this week.

Delayed by nearly a year, it has created uncertainty for UK defence contractors and ultimately led to the resignation of John Healey as Defence Secretary.

The DIP will see an additional £15bn of defence expenditure by 2029-30. John Healy had stated the UK’s armed forces require at least £28bn. Under the new plan, defence spending will only rise to 2.7% of GDP by 2030. Many other NATO members have committed to increasing defence spending to 3.5% by 2035. Much of the pressure to ramp up defence spending has been driven by the threat from Putin but also Trump’s ire and wanting European NATO members to ‘step up to the plate.’  Trump will be attending the latest NATO summit, so expect plenty of headlines!

Within the DIP, plans to replace the Royal Navy’s ageing Type 45 destroyers have been cancelled in favour of building six new modern ‘hybrid vessels’ equipped to deploy uncrewed drones in the air, on the surface and under the sea. These are expected to be built and delivered sometime in the 2030s. These will be deployed to counter Russian activity in the North Atlantic and High North to protect critical infrastructure and enhance NATO deterrence.

There is no doubt the face of warfare is changing rapidly, particularly with the use of air and undersea drones in the war in Ukraine as well as damage to underwater infrastructure. The war in the Gulf has also highlighted the need for drone and missile defences, which has seen Trump looking to build America’s ‘Golden Dome’ missile defence system.

If, as expected, Andy Burnham becomes the UK’s new PM next month, he will inherit a reported £4.7bn shortfall to fund the DIP. Cuts to some road-building projects and savings in energy security and net zero are expected to help, together with efficiencies in buying new defence equipment.

Will this be enough?

Whoever is PM will face the same challenge as their predecessors – being constrained by high levels of government borrowing. The new PM faces the poison chalice of welfare spending, even more tax hikes or attempting to borrow more. Financial markets will be watching Andy Burnham like a hawk.

What have we been watching?

Positive headlines on US-Iran talks, some ‘dovish’ central bankers at the Sintra Forum, a positive week for US equities but another poor one for US semiconductor stocks where AI uncertainties remain.

Brent oil dropped to a 4-month low below $72. This has followed positive headlines on the US-Iran talks. President Trump said that ‘They’ve had very good meetings,’ while Vice President JD Vance said, ‘Negotiators are sitting down with the Iranians, the Qataris, and with others in Doha, talking about some other details here.’ However, what might happen is still unclear. For example, take the thorny issue of passage of the Strait of Hormuz, where media reports suggest several European nations have accepted that shipping passing through would have to pay fees to Iran and Oman. Clearly, we will not be returning to the status quo that prevailed before the conflict began.

New Federal Reserve (Fed) chair Kevin Warsh, speaking at the Sintra Forum, said that inflation risks had come down. This, together with weaker than expected US jobs data, led the market to lower the chance of a rate hike by the Fed in July from 30% to 22%. More significantly, it also saw the size of potential future interest rate hikes from the Fed by December lowered to 0.3%. Against this ‘dovish’ news were media reports that Trump is actively exploring ways to reshape the Fed by removing or replacing key officials.     

The head of the European Central Bank (ECB), Christine Lagarde, was also speaking at the Sintra Forum and said that the upside inflation and downside growth risks ‘are probably more balanced than before.’ However, European ‘flash’ June inflation data was softer than expected at 2.8%, as was core CPI at 2.4%. This led markets to expect the ECB to be more ‘dovish’ in the months ahead, with just a 0.2% rate hike possible by December. This pushed European equities to a new record high.

In the UK, it doesn’t look like Andy Burnham will see a challenge, so he should become the new PM before the end of July. That removes the period of uncertainty before the market hears more on policies. He has been, so far, keen to repeat that he will abide by the existing fiscal rules. The likely new chancellor is an important unknown for financial markets.

Finally, while Trump has been trumpeting his success in reopening the Strait of Hormuz, a reminder that bringing Gulf gas and oil production facilities back online will be challenging. A recent explosion at Qatar’s Ras Laffan – the largest LNG (Liquefied Natural Gas) plant, accounting for one-fifth of global production – injured numerous workers as they tried to restart production. The plant had previously sustained heavy damage from Iranian drone and missile attacks.

The post DIP – Dithering in Parliament first appeared on Alpha Portfolio Management.

Trump’s Gulf war sent petrol and diesel prices soaring. This has prompted many vehicle owners to consider the merits of owning a battery-powered hybrid or electric vehicle (EV).

The latest UK car sales data confirms the increase in EV sales. In May, sales of EVs outsold new petrol cars for the first time. There are now more than ten Chinese manufacturers selling cars in the UK, with price being a key driver. A very competitive domestic market has forced Chinese EV manufacturers to seek new markets such as the UK. Chinese brands are rapidly increasing market share and now account for approximately 30% of all UK electric vehicle sales. Five years ago, the figure was just over 1%.

This comes as the government continues to court the Chinese EV manufacturers. The government’s message is that ‘Britain should not fear the rise of Chinese EV imports.’ One suspects that this is because it is hoping the Chinese will copy what Japan’s car industry did in the 1990s and invest in UK car production. Spain has been able to attract major Chinese factory investment – but has the UK been hampered by Brexit?

Meanwhile, the government has recently signed off on £380m of grant support for the new Agratas electric vehicle battery facility in Somerset that will go towards powering Jaguar Land Rover’s (JLR) EV fleet. Hopefully, this should keep the UK at the forefront of battery technology, and it means JLR will be able to keep exporting to the US with a made-in-the-UK battery. However, the government has announced a review of its previous 2030 ban on petrol cars as consumer demand for EVs is behind where it should be to meet the mandate. A consultation process is now underway.

For now, Chinese EV manufacturers seem to be content to invest more in car dealership networks and marketing across the UK to increase sales penetration. Unlike the US and EU, which have imposed tariffs on Chinese EVs, the UK has opted not to, citing consumer choice. There is no doubt the Chinese EV industry has received significant government support and has benefited from China’s stranglehold on rare earth minerals and economies of scale in battery technology.

One other factor that gives China’s manufacturers a major competitive advantage is its lower energy costs. While the UK government might welcome Chinese EV imports to hit its environmental targets, perhaps it is worth remembering that while China has invested heavily in solar and wind power, it still has over 1,100 coal-fired power stations operating, which account for over 50% of global coal electricity generation. Perhaps those Chinese EVs are not as environmentally friendly as first impression?

What have we been watching?

The US-Iran peace framework, hanging by a thread and global tech sell off!

Tensions in the Gulf continued to escalate last week with a series of tit-for-tat strikes around the Strait of Hormuz despite a fragile peace framework. This began with attacks on commercial shipping by Iran, prompting US strikes on Iranian-linked targets, while Iran responded with missile and drone strikes on US-linked sites in the Gulf, including bases in Bahrain and Kuwait. Meanwhile, Israel carried out air strikes against Hezbollah in Lebanon while Hezbollah rejected a US-brokered agreement with the Lebanese government.

However, while the threat level in the Strait of Hormuz has been raised to ‘substantial’ by the Joint Maritime Information Centre, overnight developments suggest a tentative de-escalation, with the US and Iran reportedly agreeing to halt further attacks ahead of renewed talks in Doha this week. This morning Brent oil has edged up slightly above $72 as traders continue to hope that the peace framework holds. However, difficult discussions remain ahead, particularly around control and potential costs for shipping transiting through the Strait of Hormuz while the situation in Lebanon between Israel and Hezbollah remains a concern.

Last week saw a global tech sell-off with ‘tech heavy’ indices such as South Korea suffering along with the US, where the ‘Mag 7’ entered correction territory following a fall in value of over 10% from its May peak. Japan also suffered as Softbank fell on news that Open AI might delay its listing until 2027. Apple fell after announcing its intention to raise the price of its Macs and iPads in response to a surge in demand for memory and storage (see our earlier Alpha Bites – Ram Raid). This has raised concerns that AI datacentre demand is generating inflationary pressures.

Global trade tensions also continue to rumble on. Trump threatened to impose 100% tariffs immediately on any European country that introduces a digital services tax on US technology such as Apple, Google, Meta and Amazon. Britain already has a 2% digital services tax in place, while France, Italy and Spain have a 3% digital services tax. Meanwhile, China added some 20 Japanese companies to an export control list that prohibits Chinese firms from selling dual-use products to those companies that might have military applications. This includes rare earth materials, batteries and semiconductor chip-making equipment.

In the UK, all eyes are upon new MP Andy Burnham. He is planning his ‘big speech’ today and is expected to re-commit to the fiscal rules with devolution as the main strategy for economic growth. Further details of the fiscal plans of the presumptive PM are expected over the coming days as nominations for the Labour leadership contest close on 9^th July. Markets will be watching very closely to see who will be appointed as new Chancellor. Whether regional devolution can drive UK economic growth remains to be seen. Certainly, Andy Burnham has worked wonders for the Manchester area, but against this there is little evidence that a devolved Wales or Scotland has experienced higher growth than England.

In the US, PCE inflation data, the Federal Reserve’s (Fed) preferred inflation measure, was softer than expected in May and as a result, markets dialled back interest rate hike expectations. The scale of anticipated interest rate increases from the Fed by December has edged back from 0.4% to just over 0.3%.

Finally, an example of why the transition to renewables is not straightforward. Tata Steel has warned that its new £1.25bn electric steel-making furnace in Port Talbot could be delayed by eight months. This follows an announcement from National Grid that its connectivity project has been delayed. This involves the construction of two new substations, the installation of transformers, as well as laying 2 km of underground electrical cables. Quite a shock for this government-backed project to modernise steel production in South Wales.

The post To EV or not EV… first appeared on Alpha Portfolio Management.

The term ‘picks and shovels’ originates from the California Gold Rush of the 1840’s.

Where the real fortunes were not made by the prospecting gold miners, but by those selling the tools and supplies necessary for mining.

Today’s gold rush is the boom in AI – artificial intelligence driven by the massive investment by the American AI hyper-scalers in data centres. For example, Alphabet, Microsoft, Amazon, Meta and Oracle are forecast to undertake £700bn of capital investment in 2026 alone. According to US government data, monthly spending on data centre construction in the US hit $50 billion in April!

While the share prices of many AI companies have soared in the past 12-18 months, so too have the share prices of many traditional industrial engineering, utility and mining companies that supply the modern-day equivalent of ‘picks and shovels’ for data centres.

AI data centres are more complex than traditional cloud storage data centres which has led the ‘Big Tech’ companies to seek specialist suppliers. For example, AI servers must be more tightly linked together, increasing the need for advanced cabling and optics. AI data centres also require much greater amounts of electricity to power them, fuelling demand for specialised power management, high-voltage electronics and cooling technologies as well as electricity! Air conditioning and liquid cooling technologies to prevent AI chips from overheating are also in demand. Meanwhile, there has been a surge in orders for gas turbines due to the demand for back-up or off-grid power supplies.

Many traditional engineering businesses have repivoted activities towards providing AI datacentre equipment to benefit from the AI datacentre gold rush. Part of the appeal is also the faster speed with which AI data centre investment projects are moving compared with traditional industrial clients.

The billion-dollar question is, can the wave of AI datacentre investment continue?          

The answer is nobody really knows, but AI fever continues to grip global stock markets. However, the escalating ramp-up in capital expenditure is a growing concern. Nonetheless, the management teams of many traditional engineers, utilities and miners believe that AI demand is a long-term structural growth trend rather than a short-term cycle. In the meantime, many are making hay while the sun shines and profiting from selling plenty of ‘picks and shovels’ to the AI gold rush miners!

What have we been watching?

Fragile peace in our time!

Encouraging progress in the US-Iran peace talks in Switzerland, mediated by Qatar and Pakistan, has seen both sides agree to a roadmap towards a potential deal within 60 days. Technical working groups have been formed and a mechanism has been established to de-escalate the conflict in Lebanon, while a direct communication line has been set up aimed at avoiding incidents and keeping the Strait of Hormuz open. This morning Brent oil has moved lower, falling to below $80. 

This has come as welcome relief to markets this morning after Saturday’s confusion, when Iran suggested the Strait of Hormuz was now closed again after Israeli attacks in Lebanon and it briefly stepped back from talks following renewed threats from President Trump, who reiterated that the US would strike again if Iranian-backed proxies in Lebanon continued attacks on Israel. While difficult discussions remain ahead for the US and Iran, the situation in Lebanon looks to be the most challenging. The head of Hezbollah has demanded that Israel leave Lebanon, while PM Benjamin Netanyahu has said that Israel will not give up any of the territory that it has occupied!

In the UK, this morning has seen the resignation of PM Sir Keir Starmer following leadership rival Andy Burnham’s by-election win last week. If, as expected, Andy Burnham becomes the new PM by September, then this will be the UK’s seventh PM in ten years, or since Brexit! The key for markets now is who Andy Burnham will appoint as Chancellor, with a high-spending candidate like Ed Miliband causing concern, although there are rumours that Yvette Cooper or Wes Streeting could be more market-friendly options. Only time will tell, but previous new PMs and Chancellors have arrived in post with great hopes, but then the lack of economic growth and the financial realities hit. As was clear from the public sector borrowing data last week, the fiscal constraints facing the UK remain unchanged, whoever is PM or Chancellor!  The 10-year Gilt yield spiked 0.98% to almost 4.85% on PM Sir Keir Starmer’s resignation announcement.        

In the US, while inflation expectations have fallen following the tentative US-Iran peace deal, the Federal Reserve’s (Fed) latest meeting last week led to a more ‘hawkish’ shift by markets on interest rate policy. Half of the eighteen Fed officials signalled that there should be an interest rate increase this year, although new Fed Chair Kevin Warsh did not submit a view this time. However, the new Fed Chair did reiterate the Fed’s inflation target, pledging to return inflation to target after five years. This led the market to price expectations for a Fed rate hike by December with the likely increase shifting up from almost 0.2% to approaching 0.4%.              

The Bank of Japan delivered a 0.25% interest rate increase as expected, taking its policy rate to a post-1995 high of 1%.

Finally, is the UK PLC up for sale? Sadly, a trend which has gathered pace since Brexit. Overseas buyers are snapping up ‘cheap’ British companies at a record pace. According to the London Stock Exchange, a renewed burst of deals has pushed the value of acquisitions by foreign buyers to £128bn so far this year, more than triple the level in the same period last year. Compared with the US, which recently saw the record SpaceX IPO, the UK has seen little new issue activity to refill the hopper as UK companies continue to disappear from the market.

The post The AI ‘Gold Rush’ – picks and shovels first appeared on Alpha Portfolio Management.

A new phase of the natural weather phenomenon El Niño – the strongest in decades, could begin very soon, the UN has warned. This will drive more extreme weather around much of the globe and boost temperatures on a planet already under strain from climate change.

An El Niño forms when a switch in wind patterns allows warmer waters to spread across the tropical Pacific Ocean. While an El Niño weather event has been expected, scientists believe it could be unusually powerful, even a record event or a ‘super’ El Niño. It’s predicted to have an adverse effect on UK weather in early 2027.

El Niño will have a global impact but typically fuels hot, dry weather in parts of South America, Southeast Asia and Australia, raising the chances of droughts and wildfires. It can weaken the Indian monsoon and bring drier conditions to parts of Africa. Meanwhile, heavier rainfall can increase the risk of flooding in the southern US.

Why should we be concerned?

This El Niño weather event is expected to exacerbate the global food supply situation and drive the price of some key commodities, such as soy, higher. The UK is reliant on imports for two-fifths of its food supply, while English farmers have faced three of the worst harvests in the past five years. With soy harvests expected to be lower, prices for animal feed will go up, with costs pushed on to consumers.

Global food production is already at risk due to Trump’s Gulf War. Besides the spike in energy prices, the Middle East is a major producer of fertilisers, with 35% of the global exports of urea, a widely used nitrogen fertiliser, passing through the Strait of Hormuz. The UK imports about 60% of its fertilisers. The impending peace deal between the US and Iran should alleviate the fertiliser issue, although, it will take 30 days to clear mines from the Strait of Hormuz and potentially years to rebuild damaged infrastructure in the region.

While a peace deal and reopening of the Strait of Hormuz is a very welcome headline news, a possible Super El Niño weather event will not be for the government facing an ongoing cost-of-living crisis or the Bank of England monitoring the inflation outlook.

What have we been watching?

Peace in our time! (with apologies to British PM Neville Chamberlain)

After 107 days of conflict and a seemingly endless number of false dawns, it looks as if we finally have a peace deal between the US and Iran which will lead to the reopening of the Strait of Hormuz. As we write this morning, risk assets have moved higher, Brent oil has fallen 4% to $83, while the two-year UK gilt yield has dropped to a two-month low of 4.77%.

The peace deal is to be signed on Friday in Switzerland. According to Iranian state media, the agreement includes a phased lifting of US sanctions on Iranian oil exports, the unfreezing of $12bn in overseas assets, and a commitment to reopen the Strait of Hormuz within 30 days, after mine clearing. The US will also end its naval blockade of Iranian ports. The deal also sets out a 60-day negotiating window during which Iran’s nuclear programme will be discussed. Tehran is expected to commit to maintain its current status and not pursue nuclear weapons.

While the peace deal is good news for markets and there is relief all around this morning, is the Middle East really any safer following the US and Israeli strike on Iran? Trump will be relieved given the US midterm elections are looming on the horizon. However, there are tough conversations ahead over the next 60 days and will the peace deal be sustainable? For example, the US Senate will need to approve any extensive sanction relief for Iran. More significantly, what about Israel and Hezbollah in Lebanon? If either were to undertake further strikes against one another, would Iran attempt to close the Strait of Hormuz again?

In the US, SpaceX’s market debut was a monumental event, marking the largest IPO (Initial Public Offering) ever completed and the company’s market value has since surpassed $2 trillion. (please see last week’s Alpha Bites for the ramifications of the sheer scale of this IPO). However, there was uncertainty for US tech companies and assumptions about the breakneck speed of AI adoption. On Friday, the US government issued a temporary export control directive forcing Anthropic to restrict access to its most advanced AI models due to undefined security concerns. These AI models had been released to great acclaim last week to US nationals. As it is operationally difficult to separate users by nationality, Anthropic opted to suspend access to these AI models on a global basis. All eyes now on the US government and Anthropic to see what they agree on as the next step!

The week ahead will see a number of key central banks making interest rate decisions. The US-Iran peace deal should help ease fears about a stagflationary shock to the global economy. For example, at the start of last week, markets were fully pricing in the prospect of the US Federal Reserve (Fed) increasing interest rates by December, but this has now lowered considerably. Elsewhere, the Bank of England is expected to keep interest rates on hold, while the Bank of Japan is expected to announce a further rate increase as part of its gradual normalisation process.

The peace deal will also be welcomed by the UK government after the UK economy shrank by 0.1% in April. However, is PM Sir Keir Starmer living on borrowed time? Following last week’s resignation of two defence ministers, we have the Makerfield by-election on Thursday, with the latest polling showing Labour’s Andy Burnham currently slightly ahead of Reform UK.   

Brent oil has dropped 4% this morning to $83 on the peace deal. However, clearing the backlog of oil tankers and removing mines could take weeks while restoring damaged oil facilities will take considerably longer.

Finally, more winners and losers from Trump’s Gulf War. Tour operators are not only having to contend with jet fuel availability and consumer hesitancy but also changing holiday habits. Due to the Iranian drone and missile strikes, Dubai International Airport saw passenger numbers fall by 66% in March. However, Spain saw a 5.2% increase in visitor numbers in April to a record 9.1 million. Holidaymakers want sunshine, not short-range ballistic missiles!

The post A Super El Niño – are you prepared? first appeared on Alpha Portfolio Management.

We have previously commented on the growth of the ‘Mag 7’ and AI chipmakers, highlighting how global share indices have become ever more concentrated upon the performance of a handful of massive technology businesses. For example, AI chip designer Nvidia recently hit a market valuation of over $5.5 trillion while Micro Technologies recently broke through the $1 trillion value ceiling.

It appears as if the market concentration is set to further increase in 2026 with the expected Initial Public Offerings (IPOs) of three companies – SpaceX, OpenAI, and Anthropic. SpaceX is targeting a $1.75 trillion IPO valuation. To put this in context, the value of the entire UK stock market is currently about £2.45 trillion. The three new US IPOs are likely to enter the US top 10 rankings by market value in the S&P 500 index. This means that the ten largest US companies by market capitalisation will account for about 50% of the index, up from 40%.

This does mean that the performance of the S&P 500 index will become even more dependent upon the trading performance of these massive companies. Vanguard’s S&P 500 tracker recently became the first exchange-traded fund to hit $1 trillion in assets, reflecting the weight of passive money ready to buy into huge listings like SpaceX. The fund has quadrupled in size since 2022.

What does the emergence of these massive US companies and passive funds mean?

It suggests global markets may become more volatile, particularly if there is sudden bad news or a bout of profit-taking. For example, the US NASDAQ technology focused index fell by over 4% on Friday!

Through the listing of OpenAI and Anthropic, the US top 10 will also become more concentrated on the AI investment story. US equities have recently hit record highs driven primarily by the results of the AI chipmakers and hyperscalers who continue to ramp up AI capital investment to breathtaking levels. The AI ‘arms race’ is well and truly underway and reaching fever pitch. While much of the AI investment is underpinned by massive revenue backlogs, the return on capital investment remains a question mark. Only time will tell how this, together with the AI stock concentration, plays out in share index performance.

What have we been watching?

After the recent strong run, markets finally lost their footing at the end of last week given the lack of a US-Iran peace deal, negative headlines on AI and mounting speculation about a US interest rate hike. The Philadelphia Semiconductor Index fell by over 10% on Friday, not helped by Broadcom’s softer earnings earlier in the week.

All this comes as tensions in the Middle East are building again with renewed missile strikes between Israel and Iran, despite the so-called ceasefire. Trump does not want this war to escalate further and is trying to find ways to avoid it. However, Iran’s Revolutionary Guard has warned of a ‘full week of continuous strikes’ following Israel’s ongoing offensive in Lebanon. The latest developments further complicate the chances of an imminent peace deal. The key sticking points remain to be resolved – Iran’s frozen assets, its stock of highly enriched uranium, Israel’s fight against Hezbollah in Lebanon and control of the Strait of Hormuz.

Brent oil has risen over 4% this morning to $97 following the exchange of attacks between Israel and Iran.

Trump’s tariffs were also a feature last week. The 150-day window for the current 10% Section 122 tariffs expires by the end of July. The Office of the US Trade Representative has therefore proposed new tariffs, ranging from 10% to 12.5%, targeting goods from major trading partners. This initiative stems from an investigation into the alleged use of forced labour in production. A 10% tariff is suggested for imports from the UK, EU, Canada and Mexico. A higher rate of 12.5% would be applied to China, India, Japan, South Korea and Brazil. The latest tariffs are subject to public hearings in early July and could well come into effect as the Section 122 tariffs expire.

The week ahead in the US will be a key one with the May inflation data closely scrutinised for the effects of Trump’s tariffs and Middle East developments. The timing is critical ahead of the Federal Reserve’s next meeting under new Chair Kevin Warsh. The case for an interest rate hike rather than a cut has been reinforced by last week’s US nonfarm payroll data, which exceeded forecasts. Bond markets are pricing in an interest rate hike later in the year, with the US 10-year Treasury yield having climbed to above 4.5% at the end of last week.

The European Central Bank (ECB) is expected to increase interest rates by 0.25% to 2.25% when it meets this Thursday.

Finally, in Alpha Bites AI RAM raid, we recently highlighted the increased cost of Random Access Memory (RAM) due to the explosive growth of AI. This is now starting to hit consumers, particularly gamers. For example, the price of Nintendo’s Switch 2 is to increase by 11% from September. Trump’s tariffs and his Gulf War have also adversely impacted supply chains, adding to costs. So genuine reasons for the price increase rather than Nintendo playing silly games!

The post The rise and rise of the mega-cap US technology stocks first appeared on Alpha Portfolio Management.

The much-anticipated US peace deal with Iran still seems very elusive. ‘Very close’ to a deal but ‘not there yet’, according to US Vice-President JD Vance.

Over the weekend, the US said it struck Iranian military sites while Tehran responded by targeting an American base. Meanwhile, Israel has expanded its ground offensive in Lebanon against the Iranian-backed Hezbollah. Some limited shipping does appear to be getting through the Strait of Hormuz with US assistance, and the Brent oil price remains below recent highs at around $93. Markets are currently not pricing in a prolonged conflict with hopes of a further 60-day ceasefire extension.

However, we are mindful of the risk that still exists of a serious energy crunch if the Strait of Hormuz does not fully reopen soon – which could drive oil prices materially higher. This could create either stagflation or, in the worst-case scenario of prolonged higher prices, another global recession.

Since the beginning of the conflict, the world has been living beyond its means. When the US/Israeli attack on Iran began, the International Energy Agency (IEA) announced the release of a record 400 million barrels of oil from the global strategic oil reserve. It was assumed, at the time, that the Strait of Hormuz would re-open within weeks.

The IEA estimates that between March and June that global oil consumption could be running at 6 million barrels a day in excess of production. More than 2 million barrels a day are being released from the strategic oil reserve, but this is due to end in July. Some analysts are warning that oil inventories among OECD countries could approach operational stress levels by the end of June. The tightest markets are not just in crude oil but in jet fuel, diesel and fertilisers. Furthermore, demand for air conditioning and holiday travel at the start of the northern hemisphere’s summer will exacerbate the situation.

Unless Trump can reach a peace deal with Iran and reopen the Strait of Hormuz quickly, then the risk of a prolonged energy crunch remains.

UK businesses and households are already feeling the pain from higher petrol and diesel prices. Markets are hopeful of a peace deal that allows the Strait of Hormuz to fully reopen so that a prolonged energy shock is avoided. The trouble is that neither side trusts the other and the two main stumbling blocks remain the control of the Strait of Hormuz and Iran’s nuclear programme.

We are not facing a prolonged energy shock – yet – but as Trump keeps telling Iran, ‘Time is ticking.’ He is still deciding on whether the current negotiations between the two nations satisfy his demands.

What have we been watching?

Another good week for global equities buoyed by hopes of a US-Iran peace deal which would pave the way for the reopening of the Strait of Hormuz. Brent oil fell by over 11% over the week to $92, while the six-month Brent future contract price also moved lower to $84. With stagflation fears easing, US equities recorded their ninth consecutive weekly gain with the S&P 500 index hitting a record high. The US market was also propelled higher by heavyweight AI chip stocks within the NASDAQ. Micron Technology became the latest semiconductor manufacturer to cross the $1 trillion market capitalisation barrier. The equity rally extended globally, with Japanese equities enjoying a strong week, although gains in European markets were more modest.

The decline in oil prices meant that fears about inflation eased. This, in turn, led markets to dial back their expectations for interest rate increases by central banks. The chances of a 0.25% interest rate hike by the US Federal Reserve (Fed) by December fell from 95% the previous week to 57%. Likewise, the chances of interest rate hikes by the European Central Bank (ECB) were also lowered although a 0.25% increase is still expected in June. Meanwhile, Bank of England (BoE) governor Andrew Bailey said that the UK can tolerate inflation that is temporarily above target and that a gradual softening in the labour market meant that inflation expectations were not coming through in wages. However, he did warn that the longer the Strait of Hormuz remains closed, the higher the likelihood that the BoE raises UK interest rates. Nonetheless, globally, lower interest rate hike expectations translated into a good week for fixed-interest investors also as Treasury yields edged lower.

In the US, the latest PCE inflation print was softer than expected, further easing concerns around the need for interest rate hikes. Headline PCE was up only 0.4% in April, whilst ‘core’ PCE was up only 0.2%. Fed officials did not sound in any rush to increase US interest rates either. Further support came from slightly softer economic data. The weekly initial jobless claims were higher than expected, while the latest GDP economic growth estimate for the first quarter proved softer than the previous estimate, running at an annualised 1.6% compared with 2% previously.

China’s official manufacturing and non-manufacturing PMI activity indicator for June came in at 50.0, in line with expectations

Brent oil is 3% higher this morning at almost $94 given the tit-for-tat US and Iranian attacks over the weekend.

Finally, hammered? London taxpayers may have to pay an extra £2.5m following West Ham’s relegation from the Premier League due to the club’s lease agreement for London Stadium. No wonder the Mayor of London, Sadiq Khan, was urging Londoners who don’t support Spurs to cheer on West Ham at the end of the season. Desperate times call for desperate measures!

The post US & Iran – Not there yet first appeared on Alpha Portfolio Management.

The recent local election results confirmed that Nigel Farage’s Reform UK party is currently the most popular in the UK and would likely win a general election were it held today.

If Reform UK retains its current lead until 2029, it would end Britain’s post-WWII traditional two-party system of government. The UK’s first past-the-post electoral system gives only the first-placed party in each constituency a seat. Historically, it has made it difficult for new parties to gain influence in parliament and led to Labour-Conservative dominance. Now that Reform UK has overtaken the traditional main parties, it stands to benefit. In 2024, the Labour Party secured 62% of the seats with just 34% of the popular vote. Reform’s current 27% share of the vote could also secure a majority of seats, although possible tactical voting against the party might limit it to a minority government.

Meanwhile, PM Sir Keir Starmer, or ‘Special K’, as he claims to have been called all of his life, is facing a leadership challenge following the disastrous local election results. The challenge will come from Wes Streeting and Andy Burnham, the latter subject to the result of the Makerfield by-election on the 18^th of June. Already old Labour wounds are being reopened with Wes Streeting and Andy Burnham involved in a debate about reversing Brexit!

Globally, bond yields are rising due to fears about ‘stagflation’ due to Trump’s Gulf War. This together with market fears about a UK government shift to the left has driven the 10-year UK Treasury yield to its highest level since 2008 while sterling has weakened.

Liz Truss’s infamous mini-budget in 2022 showed that underfunded tax cuts risk capital flight. This is a risk for both Reform UK and Labour. Markets are nervous about the prospect of left-wing Andy Burnham as PM due to his comment last September when he said, ‘We’ve got to get beyond this thing of being in hock to the bond market.’ At the time, this caused gilt yields to spike. Reform UK performed very strongly in Makerfield in the local elections, and much might rest on whether the Green Party contest strongly, splitting the left-wing vote.

Higher government borrowing costs and inflationary pressures from weaker sterling, in addition to the damage from Trump’s Gulf War as well as the uncertainty from the leadership race, are all unhelpful for the UK economy.        

It is going to be a challenge whoever is leading our country. Looking out to 2029, will Britain’s voting system and new multi-party mayhem create a hung parliament? This would be far from ideal for voters or investors given the challenges, both economic and geopolitical, that the UK faces. Before this, however, UK businesses and investors must navigate yet another leadership contest with all the uncertainty that this entails.

What have we been watching?    

A strong week for US equities again, helped by the AI investment boom but one which ended with a global bond sell-off over fears about a stagflationary shock from Trump’s Gulf War. The trigger appeared to be the ‘summit lite’ meeting between Presidents Trump and Xi Jinping. Despite market hopes, China offered no assistance in reopening the Strait of Hormuz. Meanwhile, the US position on Taiwan, semiconductor controls, rare earth minerals and AI co-operation remained unchanged. All that could be said of the meeting was that there was no further escalation in the trade war between the US and China!

The Gulf War is now 80 days old, with no obvious end in sight. The current ceasefire has lasted 41 days, suggesting that the US would prefer to avoid a further attack on Iran given the political and economic consequences. However, the fragile nature of the ceasefire was highlighted over the weekend when a drone attack caused a fire at an electrical generator at a UAE nuclear facility.

Over the weekend, Trump posted on Truth Social: ‘For Iran, the clock is ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!’  Trump and Israel’s Benjamin Netanyahu also spoke to determine the next stage of the conflict.

The ‘stagflationary’ shock from a prolonged conflict pushed global bond yields higher. The US 10-year Treasury yield has climbed to over 4.6%, its highest level in the last year. In Japan, the 10-year JGB yield has risen to 2.75%, a level last seen in 1997. In the UK, the 10 year Treasury yield has climbed to 5.19%, the highest level since 2008, albeit exacerbated by the Labour government leadership challenge.

In the UK, encouraging first-quarter economic growth data was overshadowed by yet more political turmoil which, together with Trump’s Gulf War, is likely to adversely impact the second quarter.

In the US, inflation fears were exacerbated by strong CPI and PPI data, which have led to mounting anticipation about an interest rate hike by the Federal Reserve (Fed). The probability of a 0.25% Fed rate hike in December has now risen to 62%.

In Japan, government bond yields climbed in line with global bonds but also reflected comments from PM Takaichi. She is reported to have asked Japan’s finance minister ‘to consider ways of funding, including compiling a supplementary budget.’

Brent oil edged above $110 this morning given the latest developments in the Gulf and Trump’s latest comments.  Oil futures are also pricing in a more protracted conflict, with 6-month Brent futures now at the highest level since the Gulf War began.

Finally, it wasn’t already challenging for tour holiday operators due to the Gulf War. Now, some hotels are cracking down on people reserving sun loungers with towels after a judge in a district court in Hanover awarded a German family an £850 refund after claiming they spent 20 minutes every morning trying to find a sun lounger. Given jet fuel availability, consumer caution, an increase in UK staycations and now ‘sunbed wars,’ it’s enough to make tour operators throw in the towel!

The post Is Special K toast? first appeared on Alpha Portfolio Management.

One of the topics discussed recently by G7 finance ministers besides the war in the Gulf was the private credit sector, or as it is alternatively known – Shadow Banking. Two high-profile bankruptcies late last year in America – First Brands and Tricolor – suddenly rang alarm bells about the health of the private credit sector.

The Tricolor collapse prompted the CEO of JP Morgan, Jamie Dimon, to say, ‘when you see one cockroach, there are probably more.’

Private credit offers an alternative source of funding for companies to bank lending.  Private credit, as the name suggests, is a loan but not one made by a bank but by an investment fund. Specialised managers raise funds from pension funds and insurers pool them into credit funds and lend directly to companies. These pay floating interest and then repay the loan principal at the end of the term. Typically, private credit has been provided to smaller companies and especially those considered ‘high yield’ or ‘junk’ status because of low profitability or high debt. For the investors of the credit funds, the main attraction is that it has provided higher yields, albeit at a higher risk.

Despite the risk involved, private credit has been a force for good, providing growth capital that otherwise would be inaccessible for some companies. The Bank of International Settlements reports that over $200bn of private credit loans have already been provided to fund AI-related investment and estimates that this could grow to between $300bn and $600bn by 2030.

So why are G7 finance ministers concerned?

Well, the private credit market has rapidly grown to $3.5 trillion globally of which the US accounts for about $2 trillion. Furthermore, the private credit sector is opaque from a regulatory point of view. When banks provide loans to companies, regulators see these on balance sheets and require capital to be provided against them. Private credit, by comparison, is distributed by investors and does not show up on any single balance sheet that is stress-tested by regulators. When the auto supply parts business First Brands collapsed in the US last year, it did so with estimated liabilities of between $10bn and $15bn.

Investors have been spooked and have since withdrawn billions, pulling more than $10bn from some of the largest private credit funds in the first quarter, reminiscent of the early days of the 2008 financial crisis.

Unfortunately, it isn’t usually until after a financial crisis that markets and regulators realise just how interconnected the different parts of the financial system tend to be. Central bankers, regulators and investors will be hoping that the First Brands and Tricolor collapses were one-offs as the private credit sector looks too big to fail.

Let’s hope there are no more cockroaches crawling around out there!

What have we been watching?

US equities surged to new highs, posting a sixth consecutive weekly advance driven by strong earnings in AI businesses, particularly AI chipmakers. The US ‘hyperscalers’ continue to increase AI-related investment, with the AI ‘arms race’ now reaching fever pitch. The scale of the capital investment is breathtaking. For example, Alphabet is doubling its capital investment from $91bn last year to $180bn-$190bn in 2026. While this level of spending can be justified by huge backlogs in revenue – Alphabet has indicated a $460bn backlog – the return on capital from this investment is still to be determined!

The market mood was also helped by the news that the US and Iran were close to agreeing a one-page memorandum that would end the Gulf War and set the framework for more detailed nuclear negotiations.

However, earlier this morning there were reports of further explosions in the Strait of Hormuz, with America’s military Central Command saying that ‘US forces intercepted unprovoked Iranian attacks and responded with self-defence strikes.’ Meanwhile, President Trump has posted that ‘I have just read the response from Iran’s so-called representatives’, which he went on to call ‘TOTALLY UNACCEPTABLE.’  American media reports suggest Iran has offered to transfer some of its highly enriched uranium to another country but wouldn’t dismantle its nuclear facilities. Iran’s official news agency has denied the report. Israeli PM Benjamin Netanyahu said, ‘the war is not over’ and is still seeking to end Tehran’s nuclear ambitions.

While the Strait of Hormuz remains closed, markets remain on a knife-edge. Trump clearly wants a deal with the mid-term elections looming, but what about Israel? Meanwhile, uncertainty remains about who holds negotiating authority in Iran, which may be complicating progress and delaying a resolution. Focus may now shift to the meeting later this week between President Trump and Xi Jinping in Beijing. Both leaders will no doubt wish to show their influence on the world stage, so it will be interesting to see how this plays out in potential peace talks with Iran. Betting sites currently indicate a 50% chance of the Strait of Hormuz re-opening by the end of June.

Brent oil, which fell below $97 at one point last week on news of the one-page peace memorandum, has jumped this morning by 3% to over $104.       

In the UK, PM Sir Keir Starmer is under tremendous pressure following the very poor local election results on Thursday. There is talk of a leadership challenge as soon as today. However, many left-wing Labour MPs may be wary of such a development this soon, as their preferred candidate, Andy Burnham, is not currently an MP. They fear a contest right now might allow a more moderate candidate such as Wes Streeting to prevail. Will timing prolong Starmer’s reign?  

In the US, AI chipmakers and hyperscaler results together with developments in the Gulf, have tended to overshadow economic news. Inflation expectations have edged upwards with the New York Federal Reserve (Fed) increasing the one-year outlook to over 3.6%. This has raised expectations of a more ‘hawkish’ response from the Fed, particularly given the latest strong US jobs data. We must also not forget Trump’s tariff policy. The 10% global tariff put in place following the US Supreme Court ruling against Trump’s IEEPA tariffs, has been found to be unlawful by the US Court of International Trade. Meanwhile, Trump has set a deadline of the 4^th July for the EU to ‘deliver their side of the deal’ or tariffs would be raised.       

Finally, hard times ahead due to Trump’s Gulf War? The world’s leading condom manufacturer Malaysian-based Karex, produces 5 billion condoms annually and is a supplier to leading brands such as Durex and Trojan as well as to the NHS. It is now raising prices by between 20% and 30% due to higher raw material and freight costs.

The post Private credit – are there more cockroaches? first appeared on Alpha Portfolio Management.

G7 finance ministers and some central bankers met recently in Washington, DC, to discuss a number of global challenges, by far the greatest concern was the closure of the Strait of Hormuz.

The Trump administration’s response to concerns about the energy shock and stagflation was predictable: the war will be over soon, and the gain is worth the pain. However, many remain sceptical and are concerned that the risk in terms of world energy will have to be managed for years, even when the conflict is over.

It has only been during the recent two-week ceasefire, the full scale of the damage to oil and gas infrastructure in the energy-rich Gulf region has started to become clear. Some energy analysts are suggesting that even with a durable ceasefire and the re-opening of the Strait of Hormuz. The oil, gas and fertiliser markets may not return to normal for at least six months.

Saudi Arabia, the world’s largest oil exporter, has said that it has suffered significant damage to its production capacity. Qatar, one of the world’s largest liquified natural gas producers, has lost almost a fifth of its output. Both of Abu Dhabi’s largest oil and gas refineries have been damaged by Iranian drone attacks. Meanwhile, Kuwait’s two oil refineries have suffered serious damage from multiple strikes, while Bahrain declared force majeure at its Sitra refinery. The re-opening of the Strait of Hormuz would be a major relief for markets, finance ministers and consumers and would remove the threat of a further energy shocks. Although it looks like it will take a considerable time to bring damaged energy infrastructure back on-line.

Trump’s Gulf War may also prolong the conflict in Ukraine. President Zelensky has condemned a US decision to extend the period during which Russia is allowed to sell oil despite Western sanctions. Trump is desperate to ease the energy crunch, but an oil revenue boost for Putin is not helpful for Ukraine or European NATO members.

Getting the Strait of Hormuz back open and keeping it open is a priority. Seeing the stranglehold this is causing to World trade, disrupting the free passage to shipping appears to be Iran’s ‘trump card’ in negotiations.

What have we been watching?

Two months into the Iran strikes, a fragile ceasefire holds as Iran’s fresh proposal to reopen the Strait and end the war — which notably defers nuclear talks — has lifted market sentiment to start the week, though with Trump having rejected prior terms as insufficient and Iranian President Pezeshkian ruling out negotiations under duress, resolution remains deeply uncertain.

The recent trend of the US and Iran repeatedly failing to send delegations to Pakistan continues, and to date peace talks have no agreed framework — a far worse situation than markets expected when the conflict began. Despite this, markets are hitting all-time highs, with the iShares Semiconductor ETF (SOXX) up 53% year-to-date across 18 consecutive up days — the longest winning streak in the index’s history — with April on course for its best month since the peak of the dot-com bubble during February 2000.

We’re deep into the US Q1 earnings season — hyperscaler capex is still accelerating, with Microsoft, Meta, Amazon, and Google all yet to report. AI, a genuine structural tailwind, and the risk isn’t that AI is overhyped; it’s that the market is pricing cyclical businesses as though the cycle has been abolished. Cyclicals characteristically look cheap near cycle peaks — that’s part of what makes them dangerous — and serious supply chain disruptions from the Iranian conflict are yet to be felt.

The UK economic data read well amid a challenging outlook, with unemployment coming in lower than expected and GDP beating forecasts, with broad-based gains across services and production — partly aided by car production recovering from last year’s cyber incident. Retail sales were meaningfully stronger than expected, with a strong Easter providing additional support. Inflation came in at 3.3%, up from 3% in February.

The US Q1 earnings season has shown the real economy is booming, driven so far by massive hyperscale capex and banks benefiting from the extreme market volatility.

While much of the S&P 500 is rallying, it is interesting to note that businesses like ServiceNow, an IT systems business and poster child for AI monetisation, saw its stock fall 15% on a beat and raise. Is the market starting to ask a harder question: where does AI actually show up in the numbers?

US retail sales grew 1.7% for the period, ahead of expectations, but primarily due to increased gas prices.

China’s imports continued to surge, up 28% year-on-year to a record $270bn, far exceeding market expectations, as China continues to intensify efforts to secure resources despite supply chain disruptions and elevated costs linked to the Iran conflict.

Today Brent crude sits at $108, up nearly 14% on the week amid stalled Iranian negotiations. On top of this, while peace negotiations with Russia were starting to look positive, Russia has reversed course and is now blocking oil from Kazakhstan that flows through the Druzhba pipeline and supplies almost all of Berlin’s petrol and heating fuel. Subsequently, the price of German gas is up 14% on the week and a painful 55% year-to-date.

Finally, we all know that markets move instantaneously on Trump’s Truth Social posts and that traders have been betting millions of dollars just before he makes major announcements. However, it was interesting to note an analysis by the BBC of some of Trump’s recent posts and moves in oil prices called ‘The insider trading suspicions looming over Trump’s presidency’. None of the US financial authorities contacted by the BBC acknowledged any of the allegations of insider trading.

The post Iran’s Trump card first appeared on Alpha Portfolio Management.

The European debt crisis beginning in 2009 saw a series of government debt and financial crises in the Eurozone triggered by high government borrowing, banking vulnerabilities and a global financial downturn. This particularly affected Portugal, Ireland, Italy, Greece and Spain, or the ‘PIIGS’, as they became known.

Fast forward to today and the energy shock and economic uncertainty from Trump’s Gulf War have pushed up government borrowing costs, but markets are no longer concerned by the ‘PIIGS’ but instead by Britain, Italy and France, collectively known as the ‘BIFs’. All three have ageing populations, growing welfare costs and stretched government finances. This coincides with pressure from both Trump and Putin for NATO to increase defence spending, which is putting additional pressure on government spending commitments.

The UK currently offers a gross redemption yield or interest rate of 4.8% on its benchmark 10-year Gilt, the highest of any in the G7. Britain has also suffered the biggest increase in borrowing costs since the Gulf started of any major economy.

The cost of government borrowing globally has risen and markets have become more concerned about those countries where debt to GDP (Gross Domestic Product) ratios are already stretched. The UK’s debt challenge was underscored last week by a record £15bn syndicated 2036 Treasury Gilt launch by the Debt Management Office that carried a 4.91% redemption yield. That is the highest yield offered in any 10-year UK government bond fundraise since 2008!       

Despite Chancellor Rachel Reeves’ much vaunted ‘fiscal headroom’ following a record tax burden on British businesses, the reality is that much now rests on UK economic growth. Despite North Sea oil and gas and the growth of renewables, the UK is still reliant on imported energy. Trump’s Gulf War has driven up energy prices, which will adversely impact UK economic growth. A great deal hangs on the duration of the conflict in the Gulf and whether the Strait of Hormuz re-opens to shipping.

It doesn’t take a financial genius to realise that higher government borrowing costs are painful. Britons are already enduring a record tax burden, but the Labour government doesn’t seem willing to address the ballooning welfare bill. So, just how can the Chancellor improve the UK’s finances and improve the UK’s appeal to global bond investors? Political uncertainty is not helpful either, with PM Sir Keir Starmer facing an uncertain future due to the Peter Mandelson vetting row.

What have we been watching?

The Strait opened, then closed……

Hopes of a de-escalation between the US and Iran helped propel markets higher last week, with the US S&P 500 index closing at a record high. The scale of the relief bounce in US equities has been staggering – just 11 days ago the S&P 500 was trading at an eight-month low! European and Asian equities – particularly Japanese equities – also put in a strong performance last week. Hopes of a peace deal and the freeing up of the Strait of Hormuz eased market fears of a global energy shock and stagflation.

Markets were very firm on Friday and oil prices fell after the Iranian leadership announced they were reopening the Strait of Hormuz after the Lebanon ceasefire and Trump suggested that Iran was surrendering all its nuclear material. Trump said, ‘It’s looking very good and we’re going to make a deal with Iran, and it’s going to be a good deal.’ He claimed that Iran ‘had agreed to almost everything’, including handing over the ‘nuclear dust.’

However, both these claims have turned out not to be correct over the weekend, and the Strait of Hormuz seems very much closed, with both Iran and the US firing on commercial shipping.

There is speculation that Pakistan will host another round of peace talks on Tuesday as the current ceasefire is due to end at some point on Wednesday. Trump was more hawkish over the weekend and once again threatened to ‘knock out every single power plant and every single bridge in Iran.’ Meanwhile, Iran reported that it has ‘no plans for now to participate’ in talks after US marines seized an Iranian ship that tried to run the American naval blockade. While the US may have the military might, for now Iran continues to hold the world to ransom by blocking shipping through the Strait of Hormuz and appears to be calling Trump’s bluff. Keep watching Trump’s approval rating with US voters, as a renewed deterioration in negotiations would be unlikely to help his chances in the US mid-term elections if US gasoline prices were to rise again.           

The IMF published its latest World Economic Outlook and downgraded its global economic growth forecasts and upgraded inflation. Global growth is now expected to be 3.1% with the growth outlook cut for those countries directly affected by Trump’s Gulf War, particularly those that import large amounts of energy. The IMF has raised its global inflation forecast to 4.4%.

While all eyes are upon the Gulf and Trump continues to lash out at anyone who criticises his Gulf War, there was some further Trump tariff news. US Treasury Secretary Scott Bessent said that the tariffs that had been struck down by the US Supreme Court could be restored to previous levels by mid-summer. He said, ‘We will be implementing or conducting Section 301 studies, so the tariffs could be back in place at the previous level by the beginning of July.’  This comes as Chancellor Rachel Reeves told Americans that Trump’s Iran war was a mistake. In turn, this led Trump to threaten that he would shred the current US-UK trade deal!

The UK economy saw its biggest monthly rise in February in more than two years, with GDP growing by 0.5%. Unfortunately, this is not set to continue due to Trump’s Gulf War, which has created massive uncertainty.

European Central Bank (ECB) president Christine Lagarde said that the central bank ‘did not have a tightening bias.’ This helped ease investor concerns about an immediate ECB interest rate hike in April.

In the US, while equities have been propelled higher by hopes of peace talks, the latest inflation data has also been supportive. The headline Producer Price Index (PPI) inflation reading was slightly softer than expected in March, rising by 0.5% for an annualised 4%. The week ahead is also a key one for markets as Kevin Warsh, Trump’s nominee to become the next chair of the Federal Reserve, is due to appear before the Senate Banking Committee. He has previously argued for lower US interest rates due to disinflationary forces such as deregulation and AI.

China’s economy grew faster than expected in the first quarter of 2026, with GDP growing by 5%. This was despite the Gulf War starting to impact the economy in March. The outperformance was driven by exports, particularly EVs. However, exports are likely to weaken given the Gulf War impact on many western economies. Presidents Trump and Xi Jinping are expected to meet in May when tariffs will no doubt be discussed and Trump must be hoping a peace deal with Iran can be concluded ahead of such a meeting. While berating NATO allies, Trump has so far been strangely quiet about news that Iran deployed a Chinese satellite to target US military bases across the Middle East!

Brent oil eased back from $101 to just over $91 last week on news that Iran was to re-open the Strait of Hormuz. However, developments over the weekend have once again taken a turn for the worse and this morning Brent oil is up 4% to about $95.

Finally, with the Gulf War dominating headlines, investors should not forget the ongoing AI uncertainty which has overshadowed many traditional business models in recent months. In the latest twist last week, the launch of Anthropic’s Claude Mythos AI tool, which has advanced cyber-security capabilities, has been delayed after fears were raised that it could cause a wave of catastrophic attacks that could take down critical infrastructure if it were to fall into the wrong hands. Let’s hope that is not Iran!

The post Britain’s Debt Crisis first appeared on Alpha Portfolio Management.