Market action tilted away from growth assets and towards havens in Friday night trading. Early pressure this morning on commodity currencies, and gold trading within 1% of all-time highs, points to a continuation of this rotation. China’s closure of the US consulate in Chengdu raises concerns about escalating tension between the world’s two largest economies, and a the highest daily rate of new Covid-19 infections reported over the weekend is adding to market worries.

The “v-shaped recovery” narrative is now in serious doubt. Ironically, this comes after better European and British PMI data on Friday night. UK retail sales for June also showed surprising strength, growing by 1.7% year on year and 13.5% month on month. However the better data had little impact as stocks fell and gold lifted again. Industrial commodities are under pressure this morning, with notable dips in crude oil and copper.

This week brings earnings reports from 192 US S&P 500 companies. Apple, Amazon and Alphabet lead the list. The 127 reports so far show a 16% fall in profits on a 9% decline in sales. Oil and gas stocks are hardest hit, with a drop of around 60% in profits. However tech shares are in the spotlight after Intel fell almost 20% on Friday night on news it will outsource chip fabrication to Israel.

China industrial profits and Hong Kong trade numbers today are unlikely to ease the woes. Preliminary readings on US durable goods orders tonight are expected to show an increase of 7% in June. Market reactions could be informative. Recently, markets have taken bad news as good news, relying on government and central bank support. A straightforward reaction to the release would illustrate an important change in market thinking.