In another blow to the UK labour market, Halfords has confirmed plans to close 60 stores and garages by April.

My colleague Sarah Butler explains:

The cycle and car parts retailer said it hoped to move staff to other branches, but the closures could lead to hundreds of job losses. Halfords has already closed its Cycle Republic chain and five Halfords stores and garages.

“Covid-19 has materially changed the retail outlook for the coming months and has overshadowed Brexit as the emerging risk,” the company said in a statement.

The closures are the latest blow to UK high streets and retail parks after a range of firms revealed plans in the last two weeks to close stores. Boots, John Lewis, furniture chain Harveys and shirtmaker TM Lewin are among those to have announced closures in recent weeks.

Donald Trump’s economic adviser, Larry Kudlow, has been sounding optimistic on Fox News today.

Kudlow predicted that the US economy could grow by at least 20% in the second half of this year, meaning a V-shaped recovery would be intact.

Wall Street is getting close to a five-week high:

UK tech company Sage shares the Bank of England’s concerns about the jobs market.

It has published new research today, showing that 62% of small and medium sized enterprises (SMEs) are either planning to make redundancies following the Covid-19 pandemic, or have already done so.

This equates to 1.4m jobs at risk, warns Sage. Its survey (of 2,000 directors and business owners) also found that 15% of firms reckon they won’t survive a second spike in infections.

Sage argues that the government’s Summer Statement had little for the tech sector, but was good for “bricks and burgers” (thanks to VAT cuts on hospitality, and a stamp duty holiday). They want more support for tech spending - such as digital grants, or letting firms claim 200% tax relief on technology investment.

Here’s another example of how tech stock valuations have soared, even as sales have been hit by the coronavirus lockdown.

It’s a little early, but we should raise a toast to Diageo for creating the world’s first paper-based spirits bottle that is 100% plastic-free.

It may sound a little fragile, but my colleague Rebecca Smithers reports that it should hold your whisky safely, and be better for the environment:

The company said it was aiming to launch the bottle early next year with its Johnnie Walker whisky brand in one market before rolling it out worldwide.

The bottle is made from sustainably sourced pulp, complies with international food and drink safety standards and is fully recyclable. The contents are protected by a liner, made of resin rather than plastic, which holds the liquid but disintegrates when finished. The cap will be made of aluminium.

Just hours after hiking its profit guidance, its emerged that security firm G4S is planning to cut jobs.

The GMB union has warned that G4S is restructuring its cash-handling operations in the UK, called Cash Solutions. The plan could eliminate over 1,100 jobs, they say.

The move follows a shift towards digital payments during the coronavirus lockdowns, with more people ordering goods and services online or paying through contactless cards.

Roger Jenkins, GMB National Officer, says it is “another worrying step towards a cashless society”.

“These cuts are devastating for our members and their families. GMB will fight to the end for every single job.

“They are also another worrying step towards a cashless society – the cash industry really is on a knife edge.

“The collapse of cash industry could have a terrible impact on the elderly and most vulnerable and wreak havoc on small and medium enterprises which rely on cash transactions.

The London stock market is pushing higher again, with nearly every share up.

Miners, energy firms and consumer goods makers and service providers are the top-performing sectors. That reflects optimism for the global recovery, helped by Pepsico’s results this morning.

Wall Street is expected to open higher too, in around 90 minutes, which would push the tech-focused Nasdaq to a new all-time high.

Back in the UK, prime minister Boris Johnson has urged the public in England to wear masks in shops as an “extra insurance policy” against the coronavirus:

Pepsico has given the markets a lift with its better-than-expected results today, at a crucial time, says Edward Moya of OANDA:

Global stocks are rising ahead of an earnings storm that will likely deliver the worst plunge in profits since the Great Recession. With many traders anticipating roughly a 40% drop in corporate profits, businesses could be ready to deliver a round of job cuts to shore up their balance sheets. Wall Street remains fixated with the recovery trade but that will be hard to hypothesize as the path of virus is unknown. The end result for many traders remains that the Fed is keeping rates near zero for at minimum a couple years, governments will continue to deliver fiscal stimulus, and that recovery ahead might have only got pushed back a quarter.

The official start to earnings season is tomorrow, but one key trading update and earnings report provided a small boost to risk appetite. Pepsico delivered stronger-than-expected results as COVID-19 stockpiling drove demand. The first test of the consumer showed healthy demand for mostly unhealthy food.

The International Monetary Fund has warned that Europe’s Covid-19 slump could be even worse if there is a second wave of infections, and if efforts to bring a vaccine to market quickly falter.

Poul M. Thomsen, director of the IMF’s European Department, explains in a blog post that Europe, and the rest of the world, faces a ‘extended crisis’.

An element of social distancing—mandatory or voluntary—will be with us for as long as this pandemic persists. This, coupled with continued supply chain disruptions and other problems, is prolonging an already difficult situation.

Based on updated IMF projections released last month, we now expect real GDP in the European Union to contract by 9.3 percent in 2020 and then grow by 5.7 percent in 2021, returning to its 2019 level only in 2022. If an effective treatment or vaccine for COVID-19 is found, the recovery could be faster—but the opposite would hold true if there are large new waves of infection.

Thomsen adds that there is a “strong case” for joint fiscal action, to help Europe’s high-debt countries who will bear the brunt of the social impact.

EU leaders will try to hammer out an agreement on a new recovery fund later this week. But the so-called frugal four” countries — Sweden, the Netherlands, Denmark and Austria - are resisting a large package of funds for their struggling Southern neighbours.

Three hours into the new trading week in Europe, and stocks are holding most of their earlier gains.

• FTSE 100: up 60 points or 1% at 6156
• German DAX: up 116 points or 0.9% at 12,750
• Stoxx 600: up 2 points or 0.6% at 368.91

That follows a solid session in Asia-Pacific markets:

• China’s CSI 300: up 99 points or 2.1% at 5,852, a five-year closing high
• Japan’s Nikkei: up 493 points or 2.2% at 22,784

While today is a bit quiet, investors are eagerly (or perhaps nervously) awaiting the start of the Q2 earnings season this week. It’s likely to show that company earnings and revenues slumped in April-June during the lockdown -- but will major companies also sound more optimistic about future prospects?

Jesse Cohen of Investing.com says it could be the worst quarter since the 2008 financial crisis, with earnings on the S&P 500 expected to plunge by 44% on average (with energy companies really struggling, and tech firms doing OK).

Wall Street banks all report results this week, so their view on the outlook will have a major impact on markets. As will Netflix’s results - just how much streaming have we all managed during the lockdown?...

Britain’s property sector emerged from its Covid-19 freeze in June, according to new data from property group Andrews.

It has reported that instructions picked up last month (although they were still lower than a year ago). Viewings also increased sharply - with some people checking out properties remotely.

Here’s the details:

Instructions in April and May 2020 were down 90% and 73% respectively on the equivalent months in 2019 as the property market felt the full impact of lockdown and Covid-19.

But June 2020 saw a significant rebound, with instructions down just 26% on the corresponding month last year, up 178% on May 2020, when the property market reopened mid-month, and 624% on April — when Andrews saw just 55 instructions across its south of England branches.

June also saw viewings bounce back sharply, up 373% on May as prospective buyers returned in even greater volumes. Andrews carried out 6,436 viewings in June 2020, or 214 a day, compared to less than one viewing a day in April. Three in 10 of the viewings carried out in June were ‘smart’.

In the telecoms world, the boss of BT has warned it will be “impossible” to strip Huawei products out of the UK’s telecommunications network within a decade.

With the government due to rule on Huawei’s involvement in 5G networks on Tuesday, Philip Jansen warned that its tech is already very deeply embedded in the UK infrastructure.

Removing it quickly would lead to outages, and probably mean UK vendors couldn’t access security patches in the meantime, Jansen added. The UK government, though, has hinted that it could rethink its decision to allow Huawei to provide 5G kit. More here:

The copper price also rallied today, hitting a two-year high in London, after copper miners in Chile voted to strike.

Workers at Antofagasta’s Zaldivar copper mine in Chile voted to walk out after rejecting a pay deal, accusing Antofagasta of trying to strip workers’ contracts of existing benefits.

The Zaldivar union, which represents workers at the mine says workers have been risking their lives to maintain production levels despite Covid-19, which has infected some miners.

A strike had been set for July 15 (subject to mediation), with Zandivar warning:

We cannot accept the mine owner’s exploitation.

“If the company does not recognize our contribution and sacrifice, it will face an extensive strike that will completely stop production

Mining stocks are also among the stock market risers, usually a sign that investors are more upbeat about growth prospects.

Glencore (+2.7%) and Anglo American (+2.5%) have now muscled their way into the FTSE 100 top risers. That follows a jump in commodity prices today, with iron ore, lead, aluminium and zinc prices rallying.

This market optimism is certainly at odds with the escalating Covid-19 pandemic, and the latest record jump in cases.

But investors seem to be betting on an economic recovery, and the possibility that governments will launch fresh spending programmes, or tax cuts, to stimulate growth.

Paul Donovan of UBS Wealth Management says:

Equity markets seem relatively unconcerned with the rising number of US COVID-19 cases. Although fear in the US would appear to have increased, the level of fear is nothing like that seen earlier this year. National lockdowns remain very unlikely.

There is also the possibility that the increase in cases will encourage further fiscal stimulus.

Output across Britain’s service sector and manufacturers picked up in June, but remains extremely weak, according to a new survey this morning.

Accountancy firm BDO has reported that its Services Output Index posted its biggest ever monthly jump for June, following the reopening of businesses. It rose by 11.2 points to 64.73.

Factories also reported a jump in activity, lifting BDO’s manufacturing output index from 69.55 to 80.47.

Encouraging. But overall, BDO’s output index is still below its lowest the lowest point of the 2008/2009 financial crisis.

Kaley Crossthwaite, partner at BDO LLP, says:

“Although economic activity remains considerably suppressed, the recovery in output is an encouraging signal that the easing of restrictions has breathed life into certain sectors.

“While output continues to show positive momentum, the crucial infrastructure underpinning the economy remains fragile. As government support measures are rolled back in the coming months, the prospects for the economy will become clearer. For now at least, there is reason for some very cautious optimism.”

Some traders are pinning their hopes on a Covid-19 breakthrough.

Over the weekend, the head of German biotech firm BioNTech predicted that the vaccine being developed with Pfizer could be ready for regulatory approval by the end of the year.

CEO Dr. Ugur Sahin also told the Wall Street Journal that several hundred million doses could be produced even before approval has been granted - given his confidence in the drug (which has shown potential in early trials).

Fiona Cincotta of City Index explains:

A study on Remdesivir showed that the drug reduced coronavirus fatalities by 62%. Boosting sentiment further Pfizer and BioNTech announced that their vaccine could be approved by the FDA as soon as December.

A vaccine is the quickest and surest way for the economy to bounce back to pre-corona levels, which explains why the market is so sensitive to any vaccine news flow.

A new poll from Reuters has found that the slump in China’s exports probably eased in June as some countries reopened their economies.

The survey of economists also found that imports also probably contracted less sharply, thanks to higher demand for crude oil and commodities from Chinese firms.

Given China’s crucial role in the global economy, this would indicate a revival in growth - although demand is clearly still below pre-crisis levels.

Reuters reports:

June exports from the world’s second-largest economy are expected to have contracted 1.5% from a year earlier, according to a median estimate from the survey of 32 economists, easing from a decline of 3.3% in May.

Imports likely fell 10.0% on year, the poll showed, compared with a steep drop of 16.7% the previous month, due to higher purchases of crude oil and orders for infrastructure materials.