Closing summary Time for a recap. World stock markets have recorded their strongest quarter since the financial crisis, despite worrying signs that the Covid-19 pandemic is not under control in the US. Britain’s FTSE 100 posted a 9% rally for April-June, although this lagged behind rivals such as Germany’s DAX which managed a sizzling 24%. The MSCI All Country World Index gained 18%, partly thanks to Wall Street which has seen its best quarter since 1998. Bank of England chief economist Andy Haldane had cheerful news - he thinks the UK is in the early stages of a V-shaped recovery. But, Haldane also warned that we could suffer a repeat of the unemployment woes of the 1980s. The airline industry is reeling from two job cut blows tonight. Airbus is slashing 15,000 positions, while easyJet is cutting around 4,500 jobs and closing its bases at Stansted, Southend and Newcastle airports. Britain’s retailers also had a rough day, with furniture chain Harveys and shirt maker TM Lewin both calling in administrators. That has cost 800 jobs, with another 1,300 at risk. There was some encouraging economic news, with US consumer confidence jumping and Chinese factories posting another month of growth. But we also learned that the UK economy shrank even more sharply than previously thought in January-March. GDP contracted by 2.2% during the quarter, as the Covid-19 pandemic struck, which is the joint-worst performance since 1979. Airbus’s CEO, Guillaume Faury, added that his company is facing “the gravest crisis” in the industry’s history. Explaining why 15,000 jobs are being cut worldwide, Faury says: “The measures we have taken so far have enabled us to absorb the initial shock of this global pandemic. Now, we must ensure that we can sustain our enterprise and emerge from the crisis as a healthy, global aerospace leader, adjusting to the overwhelming challenges of our customers. To confront that reality, we must now adopt more far-reaching measures. Our management team and our Board of Directors are fully committed to limiting the social impact of this adaptation. We thank our governmental partners as they help us preserve our expertise and know-how as much as possible and have played an important role in limiting the social impact of this crisis in our industry. The Airbus teams and their skills and competences will enable us to pursue our ambition to pioneer a sustainable future for aerospace.” Airbus to cut 15,000 jobs A late newsflash: Aerospace firm Airbus has announced it is cutting 15,000 jobs worldwide, including 1,700 in the UK. Airbus says the cuts are necessary to address the Covid-19 pandemic, which has hammered demand for new jets by around 40%. In a statement, Airbus says it doesn’t expect demand to fully recover for perhaps five years. The commercial aircraft business activity has dropped by close to 40% in recent months as the industry faces an unprecedented crisis. Commercial aircraft production rates have been adapted accordingly. Airbus is grateful for the government support that has enabled the Company to limit these necessary adaptation measures. However with air traffic not expected to recover to pre-COVID levels before 2023 and potentially as late as 2025, Airbus now needs to take additional measures to reflect the post COVID-19 industry outlook. It is planning to cut 5,100 positions in Germany, 5,000 in France, 900 in Spain and 1,300 at other sites, on top of 1,700 in the UK. Airbus has two major sites in Britain: Broughton, in North Wales, and Filton, near Bristol. In total it employs around 13,000 people in the UK. Here’s our news story on the looming job cuts at easyJet, which threaten thousands of jobs across Europe. Over in New York, shares in aircraft maker Boeing have slumped by 6% after Norwegian Air Shuttle canceled orders for 92 737 Max jets, and five 787s. That’s a blow for Boeing, which has just begun 737 Max recertification flights so that the troubled model can return to the air. Norwegian, though, has canned its order - and is also suing Boeing for financial losses from the grounding of the 737 Max last year. Deutsche Bank: Hold onto your hats for H2 For much of this year, the markets have been as volatile, dramatic and occasionally scary as many of us can remember. The financial cost is insignificant compared to the human toll of Covid-19, but it’s cler that a lot of money was wiped off pensions plans and ISAs in Q1, and quite a bit was wiped back on in Q2. So what might the rest of the year hold? David Folkerts-Landau, Deutsche Bank’s chief economist, predicts a lot more drama - especially in America, as states struggle to handle the pandemic. Folkerts-Landau warns: June has seen a renewed wave of the virus in some US states and it is starting to weigh on economic activity. The US is in the midst of two crises, a health crisis and a political crisis. The intense polarisation of US political life and the outbreak of racial strife is making the implementation of a consistent and comprehensive health care policy difficult. We believe that it will take relatively longer for the US to fight its way through the health crisis than it will for Europe. He also sees political drama on both sides of the Atlantic: In the coming months political developments will also return to the fore. EU leaders will shortly meet once again to discuss proposals for a recovery fund featuring joint debt issuance. We believe that the EU has always emerged strengthened from its various crises, be they foreign exchange or debt based. Each crisis has led to institutional improvement and the current one will extend this trend. The Recovery Program of the EU Commission, to be financed by borrowing in global markets, and serviced by funds raised through centralised taxation is a historic step forward. A step that will strengthen the EU and help it meet future challenges. Meanwhile for the rest of the year, trade negotiations between the EU and the UK continue in earnest, ahead of a year-end deadline when the transition period concludes. And in November, the US presidential and congressional elections could lead to sizeable shifts in both economic and foreign policy, as former Vice President Biden seeks to win the White House from President Trump. It’s unlikely that H2 will be as eventful as H1 but we’re pretty confident it won’t be dull. The US dollar is coming under some pressure today, helping to push the pound up by three-quarters of a cent to $1.236. Ranko Berich, head of market analysis at Monex Europe, blames America’s failure to get to grips with Covid-19. With lockdown measures being re-imposed in several states, including Florida, Texas, California and Arizona, traders are anticipating more financial woes for the US. Berich says: “In weeks and months gone past the US dollar’s “exorbitant privilege” as the global reserve currency and premier safe haven has meant markets have been willing to overlook the painful reality that is the relative mismanagement of the pandemic in the US. However, with peer economies in Europe, Asia, and elsewhere re-opening without major virus spikes, the contrast to the ongoing crisis in the US is all the sharper and it looks like markets are finally willing to punish the dollar at the margin.” Over in Washington, top infectious diseases expert Anthony Fauci has tried to jolt policymakers into action, warning the Senate that the situation is deteriorating fast. FTSE 100 posts best quarter since 2010 Newsflash: Britain’s stock market has just recorded its best quarterly gains in a decade. The FTSE 100 has rallied by 9% since the start of April, bringing some relief to investors after the crash which began in late February, and ran until mid March. Stocks surged strongly in April, and in May, on hopes that the UK economy would recover from the worst recession in generations. It’s notable that shares rebounded even as the death toll from Covid-19 grew steadily in the UK, and around the globe. The huge money-printing programmes launched in the UK, US and the eurozone helped to support asset prices, while new low-cost loans for struggling companies calmed fears of widespread defaults. Fiscal programmes, such as the UK’s furlough scheme, also helped companies keep running. That is the blue-chip index’s fifth best quarter in the last 20 years, and trims its losses for 2020 to “only” 18%. The index ended June with a whimper, though, losing 56 points or almost 1% to 6,169. Germany drives European stocks to best quarter since 2015 Newsflash: European equities have posted their best quarter since 2015. The Stoxx 600, which contains Europe’s biggest 600 listed companies, has just closed 0.3% higher tonight, the last day of June. That means it has surged by 12.64% during the last quarter. However, the Stoxx 600 is still down by 13% for this year. Germany’s DAX had a particularly strong quarter, surging by 24% since the start of April. German stocks rebounded strongly in recent weeks as Berlin agreed massive stimulus measures to fight the Covid-19 downturn, and as German shops and offices reopened for business in May. That means the DAX is only down 7% this year, the best performance of any major European exchange. France’s CAC jumped by around 12.5% in Q2, leaving French equities down almost 18% for the year. Italy’s FTSE MIB has gained 13.9% in the last three months, but is still down 17.4% for this year after a horrendous plunge in February and March when the pandemic struck. Gold has hit its highest level in almost eight years. The spot price of bullion hit $1,785 per ounce this afternoon , a level not seen since October 2012. Gold futures are even more bubbly, pushing over $1,800 per ounce. Gold, a traditional safe-haven, has benefited from predictions that inflation will surge thanks to the massive money-printing operations from central banks. Full story: BoE chief economist sees V-shaped recovery Here’s our news story on Andy Haldane’s cautious optimism for the UK’s economic recovery: The Bank of England’s chief economist has said the UK economy is on track for a V-shaped recovery from the Covid-19 crisis, but warned that a surge in unemployment could nudge the country off course. Andy Haldane said economic activity had steadily recovered since hitting a trough in April, when the UK was a month into strict lockdown measures that forced mostbusinesses to close. Speaking during a webinar on Tuesday, Haldane said: “There is a debate about which letter of the alphabet will best describe the path of the economy, with some scepticism about the V-shaped scenario path in the Bank’s May monetary policy report. “It is early days, but my reading of the evidence is so far, so V.” Over in the US, consumer confidence has jumped - despite rising Covid-19 infections in several states. The Conference Board’s monthly gauge of consumer morale jumped to 98.1 for June, from 85.9 in May. That’s more than expected. Consumers reported that their current economic situation had improved - suggesting that the easing of lockdown restrictions has fed through. Economic expectations also improved, but not by as much, indicating some caution about future prospects. That’s understandable, given some restrictions are now being reimposed in an attempt to stamp out an increase in coronavirus infections in California, Florida and Texas, for example.