I rather jumped the gun on Friday morning with my review of May and of the first five months of the year, as there was not much else to talk about. So I shall spare you the figures this morning and offer instead a broader view of the markets. Follow the money, to borrow the famous line from All the President's Men, and it leads straight to artificial intelligence. Across the world, equity indices are now split into two camps: those with exposure to AI, and those without enough of it. That is the main reason South Korea's KOSPI has doubled since 1 January, up 105%, I believe. Without the AI frenzy, it is a safe bet that the protracted conflict in Iran would be taking a much heavier toll on the global economy.

This flood of fresh money into technology businesses connected with Anthropic, ChatGPT, DeepSeek, Mistral and the rest of the gang is completely redrawing the map of financial geopolitics. Wide-eyed optimists think it will last for ever. Perma-bears think it will all blow up in our faces. That is a familiar confusion, but an understandable one, given that the very minds behind the rise of AI cannot agree on where it is taking us. The Financier takes a more pragmatic view: enjoy it while it pays, then adapt. In this environment, investors keep piling into anything that looks remotely like a chip, or like something needed to make one work.

The sector's chief evangelist, Nvidia boss Jensen Huang, is currently touring South Korea. The market is surging in his wake. Even more than usual, that is, assuming you have been keeping up. Huang is the modern anti-Attila: wherever he goes, money springs up even more thickly. To illustrate the present bacchanal, LG Electronics shares are up 30% this morning because, to quote a local agency, "Mr Huang is expected to meet the chairman of LG Group". He might do better to come to Europe, where stock markets are struggling to keep pace. It would do us the world of good. Still, SoftBank is to invest $75bn in a network of AI-dedicated data centres in France, more than previously planned. To connect that with my earlier point, the Japanese investment company has just topped the equivalent of $295bn in market value and overtaken Toyota Motor to become Japan's largest listed company. That is more than LVMH. And that is where the money is right now, even if it does look like irrational exuberance.

As at the start of every month, the trading week will be dominated by the countdown to Friday's US monthly jobs report. The figures remain highly important for the direction of Federal Reserve policy, at a time when debate is raging over a possible rate rise. In Europe, Tuesday's EU inflation data for May will be closely watched. There is not much suspense, as Germany, France and Italy already gave a strong steer last week. Economists expect annual inflation of 3%.

On the geopolitical front, there was no breakthrough between the United States and Iran over the weekend, which pushed oil prices slightly higher this morning. Brent is still trading around $93 a barrel, well below its recent peaks but still too high to ease the tension. Bloomberg reported that about a quarter of the large non-Iranian tankers trapped in the Persian Gulf at the start of the war had managed to slip out "little by little, slowly and discreetly". Tehran struck a site in Kuwait with a missile, while Washington hit Iranian facilities in the south of the country. The shows of force therefore continue on both sides.

The key items to start the week:

  • The European Union is considering temporarily freezing the price cap it imposed on Russian oil, as the war in the Middle East enters its fourth month.
  • India is cutting export taxes on petrol, diesel and kerosene.
  • Pete Hegseth is raising the alarm over China's rearmament and urging allies to increase defence spending.
  • China is tightening rules on overseas investment after blocking the Meta-Manus deal.
  • In Japan, manufacturing momentum is slowing as costs surge, according to the PMI.
  • On the corporate calendar this week, Hewlett Packard, Palo Alto, Broadcom, CrowdStrike and Inditex should add a little spice.

In Asia-Pacific, markets continue to lean higher, fuelled by technology. Australia, short on AI exposure, is down a symbolic 0.02%. South Korea is up another 3.6%. US futures are higher, but Europe is expected to open lower.

Today's economic highlights:

See the full calendar here.

  • GBP / USD: US$1.35
  • Gold: US$4,517.24
  • Crude Oil (BRENT): US$93.17
  • United States 10 years: 4.47%
  • BITCOIN: US$73,198.2

In corporate news:

  • CSPC Pharmaceutical receives a 1.2 billion dollar upfront payment from AstraZeneca.
  • Rio Tinto commissions its ~2 billion dollar AP60 low-carbon smelter expansion in Quebec, Canada.
  • Tesco extends its share buyback first tranche to £350 million, up by £100 million.
  • The board of directors of Universal Music Group has rejected the unsolicited bid from Pershing Square (Bill Ackman), which valued the group at $65 billion.
  • Castlelake is considering a takeover bid for easyJet, but is still in the evaluation phase.
  • UCB and Biogen announce positive results for the Phase 3 trial of DZP.
  • HSBC Holdings aims to revitalise its investment banking business in Hong Kong.
  • Novartis presents positive data for Pluvicto and an experimental radiopharmaceutical candidate for prostate cancer.
  • Bayer meets the primary endpoint of the Phase II Aracog trial.
  • The CEO of the Czech defence group CSG confirms that negotiations are continuing regarding a stake in KNDS.
  • Landis+Gyr confirms its medium-term outlook.
  • Swiss Life completes its CHF 750 million share buyback programme.
  • Moody’s upgrades Generali’s financial strength rating from A2 to A1.
  • Recticel acquires Isopanel for €16.5 million.
  • The first Windows PCs equipped with Nvidia chips will arrive by the end of the year, to compete with AMD and Intel.
  • Meta is banking on an AI pendant and connected clothing to revive its hardware, according to The Information.
  • Yum! Brands is negotiating the sale of Pizza Hut to LongRange Capital.
  • Berkshire Hathaway is set to acquire Taylor Morrison for $6.8 billion in cash.
  • SLB announces its intention to acquire Tachyus.
  • Devon Energy has received an $8 billion offer from Stone Ridge for its assets in the Marcellus Shale.
  • Pfizer announces that the combination of Talzenna and Xtandi improves radiographic progression-free survival by more than 50% in metastatic prostate cancer.
  • Revolution Medicines claims that its pancreatic cancer treatment doubles survival and improves quality of life.
  • Michael Dell announces the delivery of the first Dell Technologies system equipped with the Nvidia Vera Rubin NVL72 chip.
  • Quantinuum plans to increase the size and price range of its IPO by around 10%, according to Bloomberg News.
  • SoftBank announces a record investment of €75 billion in France. The group also becomes Japan’s largest market capitalisation, overtaking Toyota.
  • The CEO of Nvidia unveils the RTX Spark PC chip designed with MediaTek.
  • Minimax is planning an initial public offering on the STAR Market in Shanghai.
  • Today’s key earnings releases : Hewlett Packard Enterprise Company, Credo Technology Group Holding Ltd…

See more news from UK listed companies here

Analyst Recommendations:

  • Cohort Plc: Shore Capital maintains its buy recommendation and raises the target price from GBX 1350 to GBX 1550.
  • Tritax Big Box Reit Plc: Barclays maintains its overweight recommendation and raises the target price from GBP 1.65 to GBP 1.70.
  • Halma Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 4290 to GBX 5060.
  • Supermarket Income Reit Plc: Goldman Sachs maintains its neutral recommendation and raises the target price from GBX 88 to GBX 91.
  • Sage Group Plc: UBS maintains its buy recommendation and raises the target price from GBX 1025 to GBX 1050.
  • Land Securities Group Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 730 to GBX 790.
  • Big Yellow Group Plc: Goldman Sachs maintains its sell recommendation and raises the target price from GBX 800 to GBX 830.
  • Segro Plc: Goldman Sachs upgrades to buy from neutral and raises the target price from GBX 800 to GBX 900.
  • Derwent London Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 2340 to GBX 2370.
  • Tritax Big Box Reit Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 180 to GBX 190.
  • Hammerson Plc: Goldman Sachs maintains its neutral recommendation and raises the target price from GBX 338 to GBX 351.
  • The British Land Company Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 500 to GBX 510.