Wall Street has opened for trading and US stocks have followed European and Asian markets into the red:

• Dow is down 0.48%
• S&P 500 is down 0.6%
• Nasdaq is down 1.5%

With investors retreating to safe havens amid another drop in stock prices, spot gold has surpasses $1,900 per ounce for the first time since September 2011.

NEWSFLASH: British Airways owner IAG is going to issue a fresh lot of shares by September in an attempt to raise €2.5bn that will help keep it afloat amid the Covid-19 crisis, according to Reuters.

The newswire is citing several sources as saying the money will likely be raised through a rights issue, in which new shares will be offered to existing shareholders at a discount.

However, there are other options on the table, including an equity placing and issuance of convertible bonds, the report said.

As experts chew over the UK PMI and retail data, research suggests the hospitality sector is just limping back to life.

Workers in the UK’s hospitality sector are still suffering from a 68.9% drop in shifts being doled out, even after further loosening of lockdown restrictions in England.

And the numbers of shifts offered to staff is increasing at a rate of just 3% per week.

Research from Wagestream shows that the number of shifts being worked remains 58.3% down in England, where bars and restaurants being able to re-open sooner than Scotland and Wales.

In Scotland, the number of shifts being worked is still down 73% since before lockdown, the report shows.

And while the government is hoping that Chancellor Rishi Sunak’s Eat Out to Help Out scheme might support businesses and their workers, it looks like only quarter of the restaurants, cafes and pubs eligible to sign up have done so. (And there’s less than two weeks to go before diners can get their hands on the half-price meals).

More job cut announcements are coming through, but this time from Essex-based banana supplier Winfresh UK.

Winfresh UK has gone into administration, putting around 70 jobs at risk, my colleague Zoe Wood writes.

The company supplies bananas, including Fairtrade ones grown by smallholders in the Caribbean, to retailers and catering firms.

The advisory firm Duff & Phelps is handling the process with Michael Lennon, one of the administrators, explaining the company had faced cash flow pressures in a highly competitive UK market.

Lennon said:

As a result the financial position of the company has become untenable.

It is too early to define what the long-term prospects are for the company, but we will explore all the options.

UK private sector business activity grew at the fastest pace in five years this month as the easing of the lockdown brought the economy back to life, the Guardian’s Phillip Inman writes.

After the sharpest contraction in modern history during April, May and June, the economy returned to growth in July as pent-up demand from consumers and business customers led to a jump in sales and began to fill order books.

The IHS Markit flash UK Composite Output Index hit 57.1 – a 61-month high – up from 47.7 in June. A reading above 50 indicates expansion.

Manufacturing production led the way after it surged in July to give an index reading of 59.8 but the industry reported that while factories boosted production, output levels remained below pre-coronavirus levels and employment was likely to remain depressed.

Approximately a third of England’s public leisure centres will remain closed on Saturday as a widespread picture of financial distress among community leisure operators overshadows the long-awaited reopening of gyms and indoor swimming pools, the Guardian’s Zoe Wood writes.

While privately owned chains such as PureGym, David Lloyd and Virgin Active are eager to proceed with opening plans, the charitable trusts behind the country’s 2,116 council-owned sites, are being circumspect as coronavirus restrictions tip their finances into the red.

Jane Parish, the chief executive of Sencio, which runs three leisure centres and a golf course in Kent, said the future of its facilities was hanging in the balance after it ran out of cash during the quarantine period.

“We’ve been losing £100,000 a week of income but have still been incurring costs maintaining our buildings,” she said. “We’ve got no reserves left whatsoever.”

Parish said the need to limit visitor numbers meant Sencio would be making a loss when it opens its centres on 3 August.

Time to check in with stock markets and it’s a sea of red across Europe:

• FTSE 100 is down 0.9%
• FTSE 250 is down 1%
• Germany’s XETRA DAX is down 1.5%
• France’s CAC 40 is down 1.3%
• Italy’s FTSE MIB is down 1%

A quick look at US futures suggest we’ll also see a drop in American stocks once markets open at 2:30pm BST:

• S&P 500 futures are down 0.2%
• Nasdaq futures are down 0.66%
• Dow futures are down 0.19%

Malaysia’s ministry of finance has issued a statement on the Goldman Sachs settlement linked to its alleged role in the 1MDB scandal.

Malaysia’s minister of finance Tengku Dato’ Sri Zafrul Aziz said:

This settlement represents assets that rightfully belong to the Malaysian people. We are confident that we are securing more money from Goldman Sachs compared to previous attempts, which were far below expectations.

We are also glad to be able to resolve this outside the court system, which would have cost a lot of time, money and resources.

With this settlement, we will have the return of the monies expedited, and not held up by lengthy and costly court battles and legal process

It says that the agreement resolves outstanding charges and claims related to the three bond transactions that Goldman was involved in structuring and arranging for 1MDB.

The ministry said the settlement also represented Goldman’s “acknowledgment of the misconduct of two of its former employees in the broader 1MDB fraudulent and corruption scheme.”

However, it said the settlement will not affect Malaysia’s claims against Jho Low or others related to the 1MDB scandal.

Along with the cash it has already received as part of a recovery programme through the US Department of Justice, the ministry said it was set to return $4.5bn to the people of Malaysia.

“The Government remains committed to recover other outstanding assets,” the statement added.

The owner of British Gas has ended its international expansion plans with the sale of its North American energy supply business for $3.6bn, the Guardian’s energy correspondent Jillian Ambrose writes.

Centrica’s shares soared by more than 22% on Friday after revealing the deal to sell off Direct Energy to US energy giant NRG Energy.

The sale effectively ends Centrica’s international expansion plans, but the multi-billion dollar cash windfall will help to reduce the struggling energy company’s debt pile and help rescue its defined benefit pension scheme.

It is a rare glimmer of good news for Centrica shareholders, weeks after the company revealed plans to cut 5,000 roles from its global workforce after a £1.1bn loss last year.

Centrica’s firt half results, reported today, showed that the company’s earnings before interest, debt and amortisation (Ebitda) fell by 19% to £869m due in part to the impact of the coronavirus, and the loss of 226,000 customers from British Gas.

Some experts are warning that PMIs are not the best way to gauge UK economic strength in the middle of the pandemic.

James Smith, ING’s developed markets economist says that while PMIs are usually helpful in telling us about the level of growth in normal times, all they are telling us now is that the economy is no longer contracting (which we already knew based on May’s GDP data ).

Like other survey-based data, they are calculated by netting out the number of businesses saying conditions are improving against those that say they are worsening. S

o what these latest PMI numbers tell us is that on balance, a higher proportion of firms are seeing things getting better - but it doesn’t tell us much about the magnitude of that improvement.

However, Smith says there are important red flags in the IHS Markit/CIPS PMI report that one-in-three service firms reported a fall in employment in July, due to higher costs and weaker-than-expected demand.

And that’s before the UK government winds down the furlough scheme by October.

ING says there are also signs from Google Mobility data, Springboard figures, and even OpenTable restaurant reservations that consumers are still hesitant to loosen the pursestrings.

Smith says: we shouldn’t expect the UK economy to grow to pre-Covid levels until at least 2022:

A safety-conscious consumer, as well as the increasing financial challenge posed by rising unemployment, suggest that the overall economic recovery is unlikely to a full ‘V-shape’.

Despite a strong recovery in retail sales during June, we don’t expect the size of the UK economy to return to pre-virus levels until 2022 or later.

Rhys Herbert, senior economist at Lloyds Bank, says today’s wave of data is good news for the UK and provides further confirmation that economic trends are improving.

Herbert says:

Moreover, the economy may be performing slightly better than what we’re seeing here.

The PMIs have so far underestimated the scale of the rebound when compared to the official data. This has been true for manufacturing, a sector that was one of the first to emerge from lockdown and consequently has had the best opportunity to build momentum.

While it’s certainly encouraging to see growth, there are red flags that cast doubt over how long the economy can continue to expand at such a pace, and how much of this is a reflection of the emergence from lockdown only.

The worry continues to be that if businesses or consumers sniff further danger ahead – for example the increased likelihood of a second lockdown – they rein in spending and any nascent recovery stalls.

That’s something the UK economy can ill afford with an end to the furlough scheme looming and the uncertainty of Brexit on the horizon.

The IHS Markit/CIPS report on the UK PMI data says the readings for July are “marked improvement” in business conditions across the UK.

Unsurprisingly, it’s been chalked up to an increased return to work and a phased reopening of the wider UK economy.

Things were a bit shaky on the service sector front, with business capacity still limited and operating costs rising due to coronavirus safety measures. However, manufacturing firms also reported a slow return to output levels seen prior to the pandemic.

Duncan Brock, Group Director at CIPS, said:

Amidst this brightening picture, there were some winners and losers. Some parts of the economy performed better than others, both through luck with being early to reopen and good adaptation in responding to the challenges of the pandemic.

The biggest concern is that staffing levels remained disappointingly low across both sectors, as furlough schemes came to an end and redundancies started to appear.

As firms look to the future with concerns over the strength of the economy and any second wave hampering progress, Brexit looming on the horizon was also a concern that has begun to feature again for a number of businesses.

While the eurozone PMI readings are an encouraging sign at the start of the third quarter, there are fears that the recovery could be short-lived.

Chris Williamson, chief business economist at IHS Markit said:

The data add to signs that the economy should see a strong rebound after the unprecedented collapse in the second quarter.

However, while the survey’s output measures hint at an initial v-shaped recovery, other indicators such as backlogs of work and employment warn of downside risks to the outlook.

The concern is that the recovery could falter after this initial revival. Firms continue to reduce headcounts to a worrying degree, with many worried that underlying demand is insufficient to sustain the recent improvement in output.

Demand needs to continue to recover in coming months, but the fear is that increased unemployment and damaged balance sheets, plus the need for ongoing social distancing, are likely to hamper the recover.

Turning back to UK retail sales, some experts are forecasting a further recovery in July following the reopening of pubs, restaurants, hotels and hairdressers in England this month.

But a fresh wave of job cuts could threaten to knock consumer spending.

Howard Archer, chief economic advisor to the EY ITEM Club, says:

The retail sector should benefit from a further significant easing of lockdown restrictions in July with pubs, restaurants, hotels and hairdressers allowed to open conditionally in England, along with a number of other leisure facilities and venues such as theme parks, cinemas, museums and galleries. The social distancing rule was also relaxed from two metres to “one metre plus”.

However, there is uncertainty as to just how willing consumers will be to spend over the coming months. Indeed, persistent consumer caution is seen as a significant risk that could limit the UK recovery.

While there does seem to have been some pick-up in consumer spending in July, it also appears that consumers are cautious amid heightened job insecurity.

Archer adds:

Consumers are highly likely to adopt a cautious approach to discretionary purchases given the uncertain economic environment. Consumer confidence currently remains at a relatively low level despite coming off recent long-term lows. On top of this, ongoing concerns over coronavirus may limit shopper footfall.

On a positive note, three months of net repayment of unsecured consumer debt totalling £15.8 billion over March–May has improved many households’ balance sheets, which will help some consumers’ purchasing ability.

We’ve still got about 20 minutes until we get eurozone PMI figures for July, but data already out from Germany and France are showing some forecast-beating figures and suggest we’re seeing a further recovery from Covid-19 lockdowns.

Germany has come out stronger than expected on both services and manufacturing PMI.

Meanwhile, France beat forecasts on services PMI in July, coming in at 57.8 versus a Reuters for 52.3.

However, the country fell short of a Reuters poll of 53.2 on manufacturing PMI after coming in at 52.6.

The retail figures are doing little to support UK stocks with the FTSE 100 down 1.36% and the more domestically focused FTSE 350 down 0.6%.

Stocks across mainland Europe are also in the red:

• Germany’s DAX is down 1.3%
• France’s CAC 40 is down 1.2%
• Spain’s IBEX is down 1.3%

Global stocks have taken a hit, as investors worry over rising numbers of Covid-19 deaths in the US and the tit-for-tat retaliation in the long-standing spat between the US and China.

On the coronavirus front, the US surpassed 4 million cases on Thursday and more than 1,000 new Covid-19-related deaths were recorded in a single day on Wednesday for the first time since May.

And on the geopolitical front, Beijing ordered the closure of a US consulate in southwestern China, in a move that escalates tensions between the two countries to a new level, as the Guardian’s Lily Kuo explains.

On Friday, China’s ministry of foreign affairs said it ordered the US consulate in Chengdu, in Sichuan province, to stop all operations. A notice on the ministry’s website said authorities had notified the US of China’s decision to revoke its consent for the consulate to operate.

You can read Lily’s full story here:

Retailers French Connection, Naked Wines and Hotel Chocolat have reported surging digital sales as consumers turned to online channels during the nationwide lockdown.

Hotel Chocolat has said that digital sales rose over 200% in the quarter to the end of June and sales of subscriptions or recurring purchases, such as refills for in-home hot chocolate makers, grew 47%.

However, with its 125 stores across the UK closed for 12 weeks, including the key periods of Easter and Mother’s Day, overall revenues fell 14% year-on-year to £45m in the six months to the end of June.

French Connection, which operates websites in the UK and USA, has reported digital sales up 24% over the last 15 weeks.

The company said that following the re-opening of stores on 15 June in-store sales have been low “although conversion of those customers actually in the stores has been better than in the prior year”.

With pubs and restaurants closed online alcohol sales have boomed with Naked Wines reporting a 77% increase in sales in the quarter to the end of June.

In a trading update the company described itself as a “long-term winner” from the shift of consumer demand from buying wine in physical stores to digital channels.

The company also said that John Walden, Naked Wines chairman, is to leave at the the company’s annual meeting on 6 August due to personal reasons.

As it stands, UK total retail sales are just 0.6% lower than February pre-Covid lockdown levels in February.

But while the sector is clearly starting to recover, it’s worth remembering that Q2 retail sales were still down -9.5%, which is the weakest quarterly figure ever recorded.

ONS deputy national statistician Jonathan Athow comments:

Retail continued to recover from the sharp falls seen in April, with overall sales now almost back to pre-pandemic levels. But there are some dramatic differences in sales across the retail industry.

Food sales continue above their pre-pandemic levels due to the closure of cafes, restaurants and pubs. Online sales have risen to record levels, and now count for £3 in every £10 spent.

On the other hand, clothing sales remain depressed and across the high street sales in non-food stores are down by around one-third on pre-pandemic levels.

The latest three months as a whole still saw the weakest quarterly growth on record.

It looks like the retail jump was helped again by the DIY and home improvement lockdown trend.

What’s interesting here is that shops dealing in hardware, furniture and appliances saw sales rebound to near-pre-lockdown levels:

And it looks like UK shoppers ditched some of their online shopping for physical stores once restrictions were lifted.

The ONS says the proportion of online sales retreated from its record peak in May: