| Want the lowdown on what's moving European markets in your inbox every morning? Sign up here. Good morning. Encouraging virus trends in London and New York, U.S. election campaigning heats up and the combination of economic gloom with a stocks rally continues. Here's what's moving markets. Encouragement There's some positive news from two of the major city epicenters of the outbreak. London reported no virus-linked deaths for the first time since the lockdowns began in the U.K. and Prime Minister Boris Johnson is due to set out further restriction-easing plans on Tuesday. The infection rate in New York fell to the lowest since the pandemic started as shops begin to reopen in the city. A study indicated that as many as half a billion infections may have been prevented by lockdown measures in six countries, though we're likely only at the beginning of the debate about which strategy was the right one to pursue. Comments from the Dutch Central Bank suggest it doesn't have much praise for the Swedish approach. More evidence has also emerged of the role blood type plays in Covid-19, while the search for a vaccine continues. Campaign U.S. President Donald Trump intends to resume campaign rallies later this month, a move that follows polling showing him trailing Democratic rival Joe Biden in key states. Biden shifted his criticism of Trump to his stewardship of the economy, with a push by the Democratic side to counter Trump's claims that the economy is back on track with a focus on the lingering impact of the pandemic in addition to more deeply-rooted inequalities. House and Senate Democrats also presented a sweeping police reform bill, while Trump floated the idea of revamping police tactics amid the ongoing protests over the death of George Floyd, albeit without providing any specifics. Gloom, Gloom, Gloom The World Bank says the global economy will see its worst contraction since the Second World War this year thanks to Covid-19, plunging millions of people into poverty. The despondency is everywhere you look. The record run of expansion for the U.S. officially ended in February, China is facing a budget hole which may hamper its stimulus efforts while emerging-market economies will shrink for the first time since the 1960s. Spain's economy could be among the worst-hit in Europe and European Central Bank President Christine Lagarde said the moves the ECB has taken are justified by the rough outlook. Rally, Rally, Rally Yet amid all the gloom, stocks are showing few signs of halting a rally which has left strategist targets in the dust. The S&P 500 has now erased its losses for the year and not a single stock in the index is down for the past 10 weeks, either an ominous sign that everything will fall as one when the rally falters — which is what the excess speculation in options markets indicates — or evidence of a broader participation in the buoyancy. The bears keep getting on board and brokers are hunting for the stocks that will power the next leg of gains. European stock futures are pointing to some marginal gains on Tuesday too. Coming Up… U.S. stock futures are pointing a little lower and Asian stocks were mixed on Tuesday. Euro-area GDP and German export numbers are likely to grab attention on the data front and British American Tobacco Plc tops the earnings day. Also, Euronext will be the last major index provider to announce its quarterly index review, with changes for France's CAC and the Dutch AEX expected to be announced after the European close. What We've Been Reading This is what's caught our eye over the past 24 hours. And finally, here's what Cormac Mullen is interested in this morning The Nasdaq 100 Index closed at a record high Monday, while at the same time continuing its recent streak of underperformance against the broader S&P 500 Index that began last month. The seeming contradiction stands in stark contrast to the last time the tech-heavy gauge hit a fresh high in February, when its relative performance was also at a peak. It's a move that will likely spark alarm for technology bulls and is reflective of the current rotation in U.S. stocks, as former market leaders give way to once-beaten up laggards. Such shifts in leadership have often coincided with inflection points in markets, when traders throw caution to the wind and bid up the shares of basically everything that had been left behind in the rebound. It will put the "burden" of the rally continuing on a hodgepodge of lower quality companies and a basket of industrial and financial shares most exposed to an economic recovery. That's fine for the latter if the recent slew of better-than-expected economic data continues. It becomes a problem when the rally turns dependent on the former.  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 Close. | 
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