There were a number of “Moments” over the Weekend. A Peace Deal in the Gulf was inevitable – but we will see energy supply chains slowly normalise and lower inflationary expectations. Equally important is the US Government switching off Anthropic’s most powerful AI models. Collectively, these two events could have enormous consequences in terms of global power and hegemony.

Today is the 81st anniversary of VE Day – the end of the Second World War in Europe. Markets are fixated on rising stock prices and probably won’t notice. Complacency is the danger. The Wars in Ukraine and Iran highlight success and failure and point towards a very different future world than the expected one. There are massive implications for markets – but that’s a tomorrow problem for markets focused on “now”.

How swiftly the Iran conflict is resolved, and the Straits of Hormuz reopen, is critical for global markets. Whatever excuses are being bandied about to explain the US attack – it’s all about what new Administration emerges in Iran. Will it be prepared to deal with Trump on Trump’s terms, or will it choose to fight a long war of attrition?

Something different for Morning Porridge Readers this morning, a guest post from my chum David Murrin.

The supreme art of war is to subdue the enemy without fighting. As Europe wakes up to the threat, the war in Ukraine shows how quickly the battlespace is evolving. Rearming the West requires a focus on decisive, scalable, deployable technologies to deter further aggression. Let me introduce Spitfire Strategic Capital – a new fund focused on War-Winning Defence Platforms.  

Analysts and big money say it’s time to reinvest in China on the back of growth and rising prosperity. But global headlines point to rising geopolitical confrontation which could see China sanctioned, or even a hot war with the US. The real issue may be China’s rapidly declining demographics.

Nearly a year on Ukraine is unbeaten. How will it end, and how will markets react? Putin is upping the stakes, hoping he can bluff and threaten his way to a result. It’s not about Ukraine surviving, but what happens if Putin loses badly and Russia collapses as a failed state. Sanctions don’t work – what else can the West do?

We can't believe it, but its happened. Stop. Look. Listen.