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1. Oil up 10% after Israeli strike on Iran.

Stock futures down 1.5%, dollar a bit stronger at 1.15 and gold up 1% at 3428.

2. Global investors pull out of US stocks and into Europe and emerging markets.

Global investors have moved money from U.S. equities and into European and emerging markets assets, as concerns mount over U.S. fiscal policy, rising debt and the risk that trade tariffs will trigger a recession.

Equity mutual funds and exchange-traded funds, or ETFs, domiciled in the United States saw outflows of $24.7 billion in May, the largest in a year, data from LSEG Lipper showed.

By contrast, European funds attracted $21 billion in May, lifting year-to-date inflows to $82.5 billion, the highest in four years. Data for 292 emerging market equity ETFs showed inflows of $3.6 billion last month, bringing total inflows this year to $11.1 billion.

3. However, American domestic money is not going “International”.

Mutual fund data shows net U.S. flows to global equity funds remain negative through this year.

In fact, they're at their most negative in more than two years.

Cash flowing to U.S. money market funds, meantime, has climbed back above $7 trillion again in the latest week, near the record high set in April.

4. The electrification theme is on high voltage.

Huge plans for infrastructure investment in Europe are making electrification stocks increasingly attractive, especially given relatively undemanding valuations.

Europe is committed to greater defense and infrastructure outlays over the next few years, either directly or through tax incentives. Compared with expensive-looking defense stocks, electrification plays across industrials, utilities and renewables offer exposure to fiscal spending at a reasonable price. They’re also not flashing red on crowding indicators.

UBS sees upside for select European electrification names with significant US exposure, such as Schneider Electric, Siemens and ABB. Their US-driven order intake may improve, while sensitivity to tariffs is modest given their American-based production sites.

In a world of tariffs and unprecedented uncertainty, utilities’ defensive and domestic attributes are an attractive play for investors. Plus, Goldman Sachs head of European utilities research Alberto Gandolfi expects them to beat expectations on organic growth and deliver mid-to-high single digit increases in EPS and attractive capital distribution. “There are more gains to come for the sector, and the reason is that it ticks a lot of boxes right now,” Gandolfi says.

Economic growth, electrification and, crucially, massive investment in data centers should support 1%-2% annual growth in power consumption, which is seen rising further later in the decade, Gandolfi says. Goldman estimates that the European power system requires around €2 trillion of investment over the coming 10 years.

5. The case for renewable energy.

Things are starting to look up for renewables.

They have had a tough year because of President Donald Trump’s negative stance toward the sector and the potential for the early repeal of US clean energy tax credits.

A growing focus on maximizing returns in the sector now supports a positive outlook for profit growth. In fact, earnings estimates have been soaring and point to further outperformance.

Goldman Sachs analysts estimate that about 47 GW of additional power generation capacity will be necessary to accommodate the growth in U.S. data center power demand by 2030. This demand is anticipated to be met by approximately 60% gas and 40% renewable sources.

“There are clear advantages of adding renewables. “Really what you need is all sources of power generation to contribute towards this, and you can get a much quicker and actually quite cheap ramp up when you look at many renewables.”

Below: Global clean energy index is outperforming the MSCI World year-to-date.

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