Time for a recap.

Stock market have posted fresh gains today, as a raft of mildly upbeat data cheered investors.

China’s stock market led the charge, jumping over 5% to a fresh five-year high. It was lifted by signs that factories and services companies returned to growth, and by growing speculation that Beijing could launch fresh stimulus measures.

This has fed through to Europe and the US too. Britain’s FTSE 100 is up 1.7% today at 6264, a gain of 107 points. America’s Nasdaq has hit yet another record high.

Housebuilders are among the top risers in London, after the latest Construction PMI report showed the sector expanded last month.

Barratt, one of Britain’s largest home-builders, reported that its order book was looking decent. Housebuilders were also boosted by reports that the UK government could launch a six-month stamp duty holiday to encourage house purchases.

The US economy has picked up too, according to the latest survey of American service sector companies. The ISM reported the best growth figures since Covid-19 hit the US, thanks to rising business activity and new orders.

UK car sales also recovered last month, and were only a third lower than a year ago. But so far this year, auto registrations have halved, with many people embracing working-from-home rather than commuting.

That trend has hit sandwich firm Pret A Manger, who are closing 30 stores and cutting perhaps 1,000 staff.

Here’s where the axe may fall:

Fast fashion firm Boohoo - formally a stock market darling - has plunged by almost 25% following revelations that its Leicester clothing suppliers have not obeyed the coronavirus lockdown, and have been paying staff less than the minimum wage. The firm has vowed to root out such suppliers.

We’ll be back tomorrow. Cheers. GW

Just in: Two economic surveys have both shown that America’s economy is recovering from the shock of the Covid-19 pandemic.

The Institute of Supply Management’s monthly healthcheck shows that US services companies returned to growth last month. Purchasing managers across the country reported that new business improved, helping to boost activity.

This lifted the ISM’s service sector PMI index up to 57.1 for June, up from May’s 45.4. That’s the best reading since the crisis began in February, and back over the 50-point mark showing whether the sector expanded or contracted.

That’s much stronger than expected, suggesting the service sector expanded robustly last month as shops, restaurants, bars and other consumer-focused companies reopened.

Of course, this only means the economy improved month-on-month, from a pretty low ebb.....

IHS Markit’s rival PMI survey has also just been released, and shows that the contraction in US business activity contraction slowed in June. Companies reported a rise in export business, helping new orders to expand for the first time this year.

Markit says:

The loosening of lockdown measures also led to the broad stabilization of new orders, while export sales rose for the first time so far in 2020. As a result, the rate of job shedding softened markedly as some firms highlighted the hiring of new employees to help fulfil new business inflows. Excess capacity also eased as backlogs fell only fractionally. Although business confidence was historically muted, it signalled renewed optimism as hopes of stronger demand drove sentiment higher.

This lifted its US services PMI to 47.9 for June, up from the rather grim 37.5 recorded in May. That suggests a small contraction, so slightly less upbeat than the ISM survey.

Boom! The tech-focused Nasdaq index has hit another record high, as the New York stock exchange opens for business.

Hopes of an economic upturn are boosting shares, following encouraging data from China, Europe and the US in recent days. That’s helping traders to look through the latest surge in Covid-19 cases, now rising by one million per week.

The surge in Chinese stocks overnight, which has lifted Europe, has now fed through to the US:

• Dow Jones industrial average: up 363 points or 1.4% at 26,191
• S&P 500: up 42 points or 1.36% at 3,172
• Nasdaq: up 154 points or 1.5% at 10,361

Global stock markets are showing strong gains today, as signs of economic recovery let investors blot out the rising Covid-19 death toll.

European stocks are all sharply higher, with the FTSE 100 up 104 points or 1.7%.

That follows the surge in share prices in China, which jumped by 5.6% today to a new five-year high.

Joshua Mahony, senior market analyst at IG, explains:

“European markets have taken their lead from China, with the world’s second largest economy seeing a huge uptick in market speculation leading to a whopping 5.6% rise in the CSI 300.

“With China the first into this crisis, where their economy goes, many will hope to follow. Chinese experiences are no different to those elsewhere around the world, with easy monetary policies and government spending on the rise.

“Thus, despite the significant fears over how the virus will continue to hold back the global economic picture, investors will hope the worldwide stimulus efforts could bring a huge recovery in time.

“The role of stimulus is likely to remain integral to this recovery, with a slower than expected rebound in German factory orders highlighting that the economic recovery is unlikely to mimic the sharp market momentum seen in recent months.

Housebuilders are still leading the rally in London, thanks to Barratt Developments reporting a jump in orders this morning.

Rolls-Royce are also surging, up 7%, after reports that it could close its final salary pension scheme early to shore up its finances.

The jet engine maker has also confirmed rumours that it is “reviewing potential options” to strengthen its balance sheet, having seen revenues slump this year. Those rumours knocked its shares by 10% on Friday, making it a turbulent time for investors.

UK sandwich chain Pret a Manger has announced plans to shut 30 stores, and to cut jobs across the business, after suffering a slump in sales.

Pret reported that takings are down 74% year-on-year, after being extremely badly hit by the pandemic. Understandably, Pret’s stores in city centres and transport links across the UK have been particularly hurt by the lockdown.

Many office workers who would normally nip to Pret for a lunchtime BLT or a crayfish and avocado salad, or grab a coffee and croissant at the railway station or underground, are now fending for themselves at home.

The FT reports that more than 1,000 jobs cut be at risk:

Pano Christou, Pret’s chief executive, said on Monday that the chain faced a “significant restructuring of the business” and that job losses “could be 1,000 plus” unless it reached sales of 50 per cent to 60 per cent of pre-coronavirus levels by September.

Sales are roughly 25 per cent of normal levels and the company is burning through more than £20m in cash a month. Pret has been acutely affected by the coronavirus crisis as its business model — to cater convenient food to commuters and office workers — has come under siege from the mass change in working patterns.

Most of its target consumers are working from home with few expecting to return to city centre offices before the end of the summer.

In another boost, retail spending across the eurozone have jumped at their fastest pace ever.

Retail sales surged by 17.8% in May compared with the previous month, data firm Eurostat reports.

That’s the best result on record, following 10.6% falls in March and a 12.1% tumble in April.

It confirms that European shoppers did return to the high street once lockdown measures were lifted. However, sales volumes in May were still 5% lower than the previous year, showing that the economy is still badly bruised.

Economists are encouraged to hear that UK construction has returned to growth last month.

Tim Moore, economics director at IHS Markit, says there was a ‘steep rebound’ in building output last month.

House building led the way with the fastest rise in activity for nearly five years, while commercial and civil engineering also joined in the recovery from the low point seen in April.

As the first major part of the UK economy to begin a phased return to work, the strong rebound in construction activity provides hope to other sectors that have suffered through the lockdown period.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, says builders have been scrambling to get hold of parts and raw materials.

“As business confidence improved to its largest extent since February, companies were buying up materials and laying the groundwork for a stronger summer’s end. This resulted in the highest input price inflation since the start of the year as supply chains creaked under the strain of increased shortages.

Building performance is dependent on other sectors recovering at a similar pace, and as businesses were opening up, some fell short of their usual delivery capacity.

Noble Francis, economics director of the Construction Products Association, agrees that June was a ‘considerable improvement’, from the low base in April and May.

He also points out that some building sites are still shuttered.

Max Jones, relationship director in Lloyds Bank Commercial Banking’s infrastructure and construction team, says the government’s infrastructure spending plans could lift the sector.

“Firms remain mindful of how cyclical construction is, generally tracking the ups and downs of the wider economy. The Prime Minister’s speech last week will have pleased those hoping for a recovery driven by schemes spread evenly across the country, rather than focused on a few megaprojects. Yet shovels need to hit the ground to ameliorate short-term liquidity challenges that are prevalent in an industry which continues to operate on wafer-thin margins.

“There’s undoubtedly still plenty of road left to travel in construction’s recovery, with many now facing the challenge of taking the stabilisers off as they move away from using the Chancellor’s furlough scheme and going it solo once again. The pledges to invest in motorways, schools and trainlines have provided a shot in the arm to a beleaguered sector, but until they boost activity levels, Britain’s builders will remain cautious.”

Newsflash: Britain’s building sector has started growing again, after activity slumped during the lockdown.

Data firm Markit has just reported that activity in the sector rose at the fastest rate in almost two years in June.

Markit’s construction PMI, which measures activity in the sector, rebounded to 55.3 in June, up from 28.9 in May. Any reading over 50 shows growth, so this shows that some of the business lost during the lockdown is now being clawed back.

Housebuilders led the recovery, with the biggest jump in activity since 2015. This will bolster optimism that home construction is picking up (reminder, Barratt reported a jump in orders this morning, alongside a drop in sales).

Markit says:

Higher levels of business activity were overwhelmingly linked to the reopening of the UK construction supply chain following stoppages and business closures during the early stages of the coronavirus disease 2019 (COVID-19) pandemic.

Residential building was the best-performing area of construction activity in June. Around 46% of survey respondents noted an increase in housing activity, while only 27% experienced a reduction. The latest expansion of residential construction work was the steepest for just under five years.

However, firms did also report problems accessing materials (speak to a builder, and they’ll tell you that plaster is in very short supply). And they also kept cutting jobs, suggesting uncertainty about the outlook.

More to follow....

Breaking: UK car sales so far this year have hit their lowest level in almost 50 years.

The Society of Motor Manufacturers and Traders reports that registrations have fallen by 48.5% since the start of January, with just 653,502 new cars sold.

That’s the lowest half-year total since 1971, the SMMT says. Much of the damage was done in April and May, when sales fell 97% and 90% respectively.

Today’s report also shows that in June alone, 145,377 new cars were registered. That’s a 34.9% plunge compared with June 2019 (as the early preliminary data suggested).

But it’s also a significant increase on May, when just 20,247 were sold, suggesting the auto sector is inching towards more normal conditions.

The SMMT says the slump is partly because showrooms in Wales and Scotland only reopened at the end of June.

But it’s also obvious that demand for new vehicles has been badly hit, with many people working remotely - and perhaps rethinking their commuting plans.

The UK market is almost 616,000 units, or -48.5%, behind the same period last year, with some 240,000 private sales lost since consumers were told to ‘stay at home’ and retailers forced to close. This, the SMMT estimates, has cost the Treasury around £1.1bn of potential VAT receipts.

Mike Hawes, SMMT Chief Executive, says more help is needed:

“While it’s welcome to see demand rise above the rock-bottom levels we saw during lockdown, this is not a recovery and barely a restart. Many of June’s registrations could be attributed to customers finally being able to collect their pre-pandemic orders, and appetite for significant spending remains questionable.

“The government must boost the economy, help customers feel safer in their jobs and in their spending and give businesses the confidence to invest in their fleets. Otherwise it runs the risk of losing billions more in revenue from this critical sector at a time when the public purse needs it more than ever.”

After two absolutely torrid months, manufacturers in Germany have reported a pick-up in sales.

German factory orders jumped by 10.4% in May compared with April, as the global economy began to emerge from the coronavirus lockdown. That’s up from a 25% plunge the previous month.

However, on an annualized basis, Germany’s industrial orders were 29.3% lower than a year ago - a severe plunge.

Shares in fast fashion chain boohoo have slumped by 12% this morning, after it was implicated in the Covid-19 spike in Leicester - and accused of supporting ‘slavery’ conditions.

On Saturday, the Guardian reported that Boohoo’s Leicester suppliers had been hard at work producing new clothing items to appeal to customers during the lockdown. Some factories, it appears, may have ignored that lockdown and kept working.

Here’s a flavour:

The city’s garment manufacturing base has long been criticised for poor working conditions and low pay.

After the campaign group Labour Behind the Label this week published workers’ claims of being asked to keep working despite coronavirus outbreaks on site, an industry source provided the Guardian with a list of more than a dozen suppliers which they alleged sold to Boohoo and continued to operate during the crisis despite infected workers being on site.

Two community sources who were consulted about the list said it was corroborated by information from whistleblowers.

The Sunday Times then piled the pressure on, with an undercover reporter discovering that workers in Leicester making clothes destined for the fashion giant Boohoo are being paid as little as £3.50 an hour.

They said:

The factory, which displayed the sign Jaswal Fashions, was also operating last week during the localised coronavirus lockdown without additional hygiene or social distancing measures in place. The undercover reporter spent two days working in the factory where he was told to expect £3.50 an hour, despite the minimum wage in Britain for those aged 25 and over being £8.72.

He obtained covert video footage of himself packing garments made in the factory under the label of Nasty Gal, which is owned by the fast-fashion brand Boohoo whose boss, Mahmud Kamani, is set to scoop a £50m bonus.

Boohoo have now issued a statement to the City, pledging to “immediately terminate relationships” with any supplier who breaches its code of conduct.

We are grateful to The Sunday Times for highlighting the conditions at Jaswal Fashions, which, if as observed and reported by the undercover reporter, are totally unacceptable and fall woefully short of any standards acceptable in any workplace.....

Our early investigations have revealed that Jaswal Fashions is not a declared supplier and is also no longer trading as a garment manufacturer. It therefore appears that a different company is using Jaswal’s former premises and we are currently trying to establish the identity of this company.

Shares in UK housebuilders are rallying sharply this morning.

Persimmon, Barratt Developments and Taylor Wimpey have all jumped over 5% to the top of the FTSE 100 leaderboard.

Barratt Developments told investors this morning that all its sites have now reopened, with workers following physical distancing.

This means that new home completions have fallen by a third over the last year, from 17,856 to just 12,604.

But Barratt is cautiously optimistic, having seen high customer interest levels since its sales centres reopened. This means its order book has swelled significantly.

It says:

Our forward order book is strong with total forward sales (including joint ventures) as at 30 June 2020 of 14,326 homes (30 June 2019: 11,419 homes) at a value of £3,249.7m (30 June 2019: £2,604.1m)

CEO David Thomas says the Covid-19 pandemic has caused “significant disruption”, but the firm has ridden it out.

Now, with our construction sites operational across the UK, we begin the new financial year with cautious optimism supported by our strong forward order book and our well capitalised balance sheet.”

European stock markets have opened strongly higher, as investors shake off the latest surge in global Covid-19 cases.

In London, the FTSE 100 has gained 112 points or 1.8% to 6271 points, its highest level in almost two weeks.

Germany’s DAX, France’s CAC and Spain’s IBEX all rallied around 2%.

This follows a remarkable day’s trading in China, where stocks surged 5% to a new five-year high.

Analyst Stephen Innes of Axicorp says rumours of new support from Beijing are lifting markets:

China seems to be perfectly able to look through the gnarly Western media headlines of another global coronavirus record (212k) instead; local investors are listening to the enthusiastic chorus from the nation’s influential state media, which are universally singing bullish from the same song page laced with hints of policy easing.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Car sales are a decent barometer of economic conditions - showing whether people are happy to make big purchases, and whether firms are confident enough to expand their fleets.

The latest industry data, due at 9am, are likely to show that sales picked up in June after a drastic slump in April and May during the downturn. However, sales are still much weaker than a year ago, as Covid-19 pushed the UK into a painful recession.

Preliminary data from the Society of Motor Manufacturers and Traders show that sales fell by a third in June, compared with a year ago. Roughly 145,000 units were registered last month, according to Reuters, down from 223,421 in June 2019.

That’s quite a tumble, showing that demand remains weak even though forecourts are now open for business again. With millions of people working from home, and millions more still furloughed, demand for a new motor is clearly still weak.

But it would also be an improvement on the 90% tumble in May, when a mere 20,000 cars were registered. In April, sales virtually evaporated with just 4,321 changing hands as the nation hunkered down.

As Reuters points out, the auto industry is still struggling:

Not all British car factories have reopened and many are operating at reduced capacity as manufacturers try to balance demand and supply.

While car showrooms were allowed to reopen from June 1 in England, dealers in Wales and Scotland had to wait until June 22 and June 29 respectively.

The big picture is that UK car sales have fallen roughly 50% in the first five months of this year, with diesel worst hit. We get the full report from the SMMT at 9am.

Also coming up today

New Construction PMI surveys from the UK and the eurozone will show how Europe’s builders coped with social distancing restrictions and supply shortages.

The latest eurozone sales figures may also show that spending picked up in May, as shops reopened.

Global markets are expected to rally today, as the battle between optimism over better-than-expected economic data, and concern over the surge in coronavirus infections continues.

Britain’s FTSE 100 is being called up around 80 points, or 1.4%, at 6240, which would recover all Friday’s losses.

Shares in Asia have already rallied, even though Covid-19 cases have hit a record high in India, with global cases near 11.5m.

David Madden of CMC Markets explains:

According to the WHO, on 4 July over 212,000 new Covid-19 cases were registered – a daily record. The US, Brazil and India were the largest contributors to the tally. The US’s reading on Saturday was over 53,000, which was a retreat from Friday’s level of more than 57,000. Some hard hit US states such as Florida are experiencing a drop-off in the rate of new cases, which is probably down to a pausing of the reopening of its economy. As of yesterday, 34 states saw an increase in new cases on the week.

Stocks in mainland China and Hong Kong are showing impressive gains. There has been a jump in trading volumes in China, and European equity benchmarks are tipped to open higher as a result.

The agenda

• 9am BST: UK new car sales for June
• 9am BST: Eurozone construction PMI for June
• 9.30am BST: UK construction PMI for June - expected to rise from 28.9 to 47, showing a small contraction
• 10am BST: Eurozone retail sales for May - expected to jump 15% month-on-month
• 2.45pm BST: US services PMI for June - expected to rise to