And finally, the London stock market has ended the day with small gains - after a choppy days trading.

The FTSE 100 has closed 23 points higher at 6147 points, a gain of 0.4%. That’s a small rebound after yesterday’s 3% slide.

Despite this morning’s gloomy CBI survey, retail chain JD Sports was the top riser on the FTSE 100, up 3.8%.

Investment group Standard Life Aberdeen (+3.7%) and private equity group 3i (+3.6%) also rallied, following the jump in financial stocks after regulators relaxed regulations on US banks.

Top fallers included Rightmove, catering company Compass and hotel group Whitbread - all vulnerable to any second wave of Covid in the UK.

The worse-than-expected US jobless data didn’t cause much alarm in the City, with traders mainly focused on the latest Covid-10 developments. Larry Kudlow’s insistence that America won’t have another lockdown may have calmed nerves, however that pledge could be tested if Covid-19 cases keep rising.

Thee latest warning from the iMF about stock market bubbles should also encourage investors to wonder if the recent rally has gone too far....

On that cheery note, goodnight! GW

Shares in US banks have jumped, after banking regulators unveiled a pair of rules that will make life easier for large banks with complex trading and investment portfolios.

Reuters has the details:

One rule wraps up a long-running effort by Republicans to overhaul the so-called “Volcker Rule,” clearing the way for banks to make larger investments in riskier funds like venture capital funds.

The second relieves banks from having to set aside cash to safeguard derivatives trades between affiliates within the same firm. The move hands a win to big global banks that had lobbied for the relief, as industry estimates it could free up as much as $40 billion in previously reserved cash.

Goldman Sachs has now jumped to the top of the Dow leaderboard, up 2.6%, followed by JP Morgan (up 2.1%). This has lifted the Dow into positive territory, after its earlier slide.

Readers may remember, though, that the Volcker Rule was introduced after the last crisis, to prevent Wall Street banks making risky, speculative bets with their customers money.....

Huawei has said it will spend £1bn on a new chip research and development centre outside Cambridge, after receiving planning permission from the local council.

The move to build the facility, which will create 400 local jobs, comes as the government considers reducing the controversial Chinese technology company’s involvement in the rollout of the UK’s 5G mobile networks to zero. In January, the government said that Huawei could be involved in building the UK’s 5G networks, but with a 35% cap on the use of its equipment.

Last month, the UK’s National Cyber Security Centre, a branch of GCHQ, launched an emergency review into the use of Huawei equipment after the US put more export controls on the Chinese company.

Huawei insisted that the new 500 acre campus, which was approved by the South Cambridge District Council by nine votes to one on Thursday, was not a political play to curry support.

Victor Zhang, vice president at Huawei, said:

“It has been suggested that our £1bn investment has been timed to coincide with the debate over Huawei’s future in the UK’s 5G infrastructure.

In January the government said Huawei can continue to work with customers on 5G in the UK. The Cambridge investment began more than three years ago in 2017, well before the subject of Huawei and 5G was raised in the UK. Huawei did not pick the timing of the approval… by South Cambridge council.”

The new site, which will be about 15 minutes from chip designer ARM, will be used to develop and manufacture semiconductor technology, called optoelectronics, aimed at speeding up data transmission over fibre broadband networks.

Huawei, which employees 1,600 people in the UK, bought the 550-acre site for £37.5m in 2018.

The International Monetary Fund has warned that the recent stock market rally may have run too far - and is vulnerable to a correction.

In its latest global financial stability report, the IMF said the surge in stocks since late March suggested an optimism that was not matched by the economic data.

“Markets appear to be expecting a quick ‘V-shaped’ rebound in activity.

“This has created a divergence between the pricing of risk in financial markets and economic prospects.”

The IMF is also concerned that the rally appears to be fuelled by central bank stimulus schemes - raising the risk of a crash if the punchbowl is taken away.

Ding ding! US stock traders have returned to the fray after yesterday’s rout, with anxiety over the coronavirus pandemic still swirling.

The Dow has dipped at the start of trading, losing 95 points or 0.4% to 25,350 (on top of the 710 point tumble on Wednesday).

The S&P 500 is down 0.3%, and the Nasdaq is flat, as investors stay cautious following the biggest spike in US Covid-19 cases since April.

The virus dominates several newspapers today, which could focus minds on the health and economic crisis:

Newsflash: Nearly 1.5 million Americans filed new claims for unemployment benefit last week.

That’s worse than expected -- economists had expected 1.3m fresh job losses. It’s barely lower than the previous week, when 1.54m initial jobless claims were filed.

This suggests America’s economy is struggling to emerge from its slump, and that some companies are still laying staff off.

It also means that at least a million Americans have lost their jobs every week since mid-March, when the initial jobless claims smashed the previous record of under 700k.

Just in: UK retailers remain very gloomy about their prospects this summer, despite the government’s efforts to reopen the economy.

The “vast majority” of retailers expect sales to be lower in July than a year ago, after suffering slumping sales under the lockdown, according to the latest survey from the CBI.

Over 60% of retailers said they expect customer demand to be weak. A similar amount fear disruption because their staff will be stuck at home looking after children who can’t return to work.

Retailers also reported that sales were much poorer in June than a year ago, although not as bad as in May.

Here are the key findings from the report:

• Retail sales fell sharply in the year to June, albeit at a slower pace than last month (balance of -37%, from -50%).
• No further improvement is expected next month, with the pace of decline expected to be steeper in the year to July (balance of -48%).
• The volume of orders placed on suppliers fell at a slower rate in the year to June (balance of -42%, from -56%), and is expected to fall at broadly a similar rate next month (-44%).
• Growth in internet sales volumes picked up (balance of +50%, from +27%), and online sales are expected to grow at an even faster pace next month (+56%).
• Sales were seen as poor for the time of year (balance of -34%, from -48%) and are expected to remain poor next month (-41%).
• The volume of stocks in relation to expected sales fell in June (+24% from +45%). Relative stock levels are expected to increase next month (+38%).
• A special Covid-19 question asked retailers which issues present operational challenges for re-starting their business, with 62% citing lack of demand from customers, followed by workforce absences due to school closures (61%) and transport difficulties (35%), and cost pressures (38%).

Newsflash: German payments company Wirecard has applied to open insolvency proceedings, a week after admitting that €1.9bn is missing from its accounts.

In a brief statement, Wirecard says:

The management board of Wirecard AG has decided today to file an application for the opening of insolvency proceedings for Wirecard AG with the competent district court of Munich (Amtsgericht München) due to impending insolvency and over-indebtedness.

It is currently evaluated whether insolvency applications have to be filed for subsidiaries of Wirecard Group.

Wirecard’s technology handles billions of payments between online retailers and customers each year. CEO Markus Braun was arrested on Monday. Last Thursday, Wirecard admitted the money was missing - having previously denied reports in the Financial Times that its sales and profits were being artificially inflated, misleading auditors for many years.

The European Central Bank has launched a new facility to protect the financial system from the impact of Covid-19.

It will offer euro loans to central banks outside the euro area, in an attempt to prevent a shortfall of euros in the market.

The new facility, which will let other central bankers swap suitable collateral for euros, will run for a year. It’s basically an attempt to keep the plumbing of the financial system running smoothly while the pandemic plays out.

In a statement, the ECB says:

In response to the coronavirus (COVID-19) crisis, the Governing Council of the European Central Bank (ECB) decided to set up a new backstop facility, called the Eurosystem repo facility for central banks (EUREP), to provide precautionary euro repo lines to central banks outside the euro area.

EUREP addresses possible euro liquidity needs in case of market dysfunction resulting from the COVID-19 shock that might adversely impact the smooth transmission of ECB monetary policy.

Under EUREP, the Eurosystem will provide euro liquidity to a broad set of central banks outside the euro area against adequate collateral, consisting of euro-denominated marketable debt securities issued by euro area central governments and supranational institutions.

This may reassure investors that central banks will continue to do whatever they can to protect the global economy and the financial system, and prop up asset prices.

As feared, Britain’s stock market has dropped in early trading as anxiety over the pandemic swirls.

The FTSE 100 has fallen by 81 points, or 1.3%, to 6041. That’s the lowest level since Monday 15th June, adding to Wednesday’s 3% slide.

Every stock is down, led by United Utilities (-4%), online estate agent Rightmove (-3.7), and broadcaster ITV (-3%).

Jasper Lawler of London Capital Group reports that City traders are alarmed by the latest developments in the US:

New quarantine rules for travellers from some US states was the tipping point for investor doubts about the impact of rising coronavirus cases. New York, New Jersey and Connecticut will make travellers from California, Florida and Texas quarantine for 14 days.

The unemployment crisis in Britain has just deepened, with the Royal Mail announcing plans to cut 2,000 jobs.

It is blaming the move, in part, on the Covid-19 pandemic.

Keith Williams, interim Executive Chair, told the City:

In recent years, our UK business has not adapted quickly enough to the changes in our marketplace of more parcels and fewer letters. COVID-19 has accelerated those trends, presenting additional challenges.

Royal Mail is now planning a management restructure that will affect around 2,000 people, saving £130m, alongside a £300m cut in Capex spending.

Royal Mail also reported that pre-tax profits fell in the year to 31 March, to £180m from £241m.

Williams is swinging the axe just a month after Royal Mail’s chief executive Rico Back quit with less than two years in the role. Back had battled with the unions over his plan to restructure the business, sending Royal Mail shares down to record lows even before the pandemic began.

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

After heavy losses yesterday, there’s an edgy mood in the markets today as investors are spooked by the sharp rise is Covid-19 cases in the US.

Stocks have fallen sharply in Asia-Pacific already, down from four-month highs, after US authorities reported that new Covid-19 cases are rising at the fastest rate since April.

The possibility of a dreaded second wave of infection knocked 710 points, or 2.7%, off the Dow last night, with transport companies and energy stocks among the big fallers.

My colleagues Amanda Holpuch and Maanvi Singh explain how the situation is deteriorating in parts of the US:

A coronavirus resurgence is wiping out two months of progress in the US and sending infections to dire new levels in southern and western states. Administrators and health experts warned on Wednesday that politicians and a public that, in many cases, is tired of being cooped up are letting a disaster unfold.

While newly-confirmed infections have been declining steadily in early hot spots such as New York and New Jersey, several other states set single-day records this week, including Arizona, California, Mississippi, Nevada, Texas and Oklahoma.

The global picture is that cases worldwide passed 9.4 million on Thursday, and is expected to pass 10 million by the end of the week. At least 480,000 people have died so far.

With cases worldwide rising by one million a week, some investors must be wondering if the markets got ahead of themselves in the last couple of months.

Jim Reid of Deutsche Bank says volatility is back, with a bang.

A plethora of bad news about the virus led to a major sell-off in risk assets yesterday as volatility returned to financial markets once again.

It wasn’t a single bad headline that led to the plunge, but a drip-feed of negative stories that all combined to show increasing signs of a deteriorating situation on the virus, most obviously in the US. In terms of the news there, Florida (the 3rd most populous US state) saw its number of Covid-19 cases rise by 5.3% yesterday, some way above the previous 7-day average of 3.7%, and the number of hospitalisations rose by 256 in the state, the largest increase in a month.

California also saw a record jump in cases, with over 8800 new ones yesterday. This equated to a 4.8% rise - notably above the 2.5% average daily rise over the last week.

The prospect of a new trade war also hit stocks, after the US outlined plans to impose tariffs on $3.1bn of European products such as olives, pastry and cakes, beer, gin and vodka.

So, after plunging 3% or 196 points yesterday, Britain’s FTSE 100 index is expected to dip again this morning.

Later today we’ll discover how strongly retail sales picked up in the UK and US since lockdowns were eased... plus the latest weekly US unemployment report.

The agenda

• 11am BST: CBI distributive trades survey of UK retail sales in June
• 1.30pm BST: US durable goods sales for May
• 1.30pm BST US weekly jobless figures