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Good morning. Covid-19 passed another unwanted milestone, the U.K. government is set to spend big to lift the economy and stock futures are indicating declines at the start of the week. Here's what's moving markets. Warning Signals Covid-19 cases worldwide surpassed 10 million as rising infections in certain hotspots provide a fresh warning on reopening economies too quickly. Some of the more worrying statistics continue to come from the U.S., where Florida reported a 6.4% increase in infections Sunday and Arizona's new cases topped the weekly average for a fourth day. One positive, though, was New York reporting the fewest fatalities in three months. Here in Europe, Italian deaths have stabilized, though Portugal reported its biggest daily increase in cases since May 8. Meanwhile, just as English pubs and restaurants prepare to swing open their doors on Saturday, there's an ominous sign from one English city, Leicester, which could be put into local lockdown to stem the spread, according to Home Secretary Priti Patel. Big Spender U.K. Prime Minister Boris Johnson vowed to spend large sums on hospitals, schools and roads in order to jumpstart a British economy that's been battered by the new coronavirus. In an interview in the Mail on Sunday, he rejected a return to the austerity policies that followed the 2008 financial crisis. The pound started the week higher against the dollar as traders also eye the latest meeting between top negotiators from the European Union and U.K. on a trade pact, with just a few days left to extend the Brexit transition period if needed. Back at home, Johnson's Conservative party is facing a crisis of identity, while the weekend also brought news that Britain's most senior civil servant will stand down following reports of tensions with the prime minister's senior aide, Dominic Cummings. Second Half Approaches The first half of the year is drawing to a close and there's a case building for European equities to continue a rare outperformance over peers in the U.S. Both the Euro Stoxx 50 Index and the broader Stoxx Europe 600 Index have performed better than the S&P 500 since mid-May, and are on track to beat Wall Street for the first full month since September. That's been partly driven by fears of a slow economic recovery in the U.S. -- something that also seems to be reflected in the bond market. In terms of individual European shares, the pandemic has spurred gains for food-delivery companies, video-game makers and medical-equipment suppliers, among others. Here are some of the stocks to keep an eye on in the second half. China Profits Rebound There's plenty to digest from China as data showed profits of Chinese industrial firms rose 6% versus a year earlier in May, signalling the economy is continuing to recover from the coronavirus shutdowns. Premier Li Keqiang, meanwhile, announced the country could increase support to protect smaller and labor-intensive companies and help key trade enterprises solve problems to stabilize jobs. Much focus also remains on U.S.-China relations, where the two sides are moving beyond bellicose trade threats to exchanging regulatory punches. Finally, a top adviser to Hong Kong Chief Executive Carrie Lam said the national security law that China could impose as early as this week won't need to be used if the financial hub's residents avoid crossing certain "red lines." Coming Up… Keep an eye on European political news: Polish voters denied President Andrzej Duda's bid for quick re-election, forcing him into a runoff that risks halting a nationalist makeover of the eastern European country. Meanwhile, Iceland reelected its president, rejecting a right-wing challenger, and in France, Emmanuel Macron's party was defeated in the Paris mayor's race and Green Party candidates won in several other major cities, turning French local elections into a warning for the president. In data, we'll get German inflation and euro-area economic confidence, while earnings come from South African tech investor Naspers Ltd. Finally, keep an eye on shares of Commerzbank AG, the latest bank that's said to be eyeing job cuts. What We've Been Reading This is what's caught our eye over the weekend. And finally, here's what Cormac Mullen is interested in this morning Just when it seemed the market mood was turning in their favor, hedge funds have pulled the ripcord on their bearish U.S. stock bets. Speculative investors bought a net 200,000-plus S&P 500 Index E-mini contracts in the week to June 23, the most since 2007, according to the latest Commodity Futures Trading Commission data. Net short positions in e-minis had grown to their highest in almost a decade, as the U.S. equity rally stalled amid fresh concerns about another wave of coronavirus infections. With quarter-end upon us, there could be an element of portfolio repositioning behind the move -- the bearish bets are not necessarily outright ones but often act as hedges or part of a pair trade. There could also be a realization that the equity market wasn't cracking, even as the U.S. virus spread intensified. Whatever the reason, the gauge of hedge-fund positioning will remain closely watched as we move into July -- the potential for short-covering was one of the factors bulls believed could push the U.S. stock benchmark to fresh highs.  Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Clos | 
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