By Noreen Burke

Investing.com — The increasing number of Covid-19 cases in some U.S. states which has led to reopening plans being paused or rolled back is going to be an ongoing source of worry for investors as the second half of 2020 gets underway. It’s a quiet week on the U.S. economic calendar, with Thursday’s report on jobless claims set to be the highlight. Across the pond, Brexit talks rumble on and euro zone finance ministers are to meet for further discussions on the bloc’s recovery fund ahead of a crucial summit later this month. Here’s what you need to know to start your week.

1. Pandemic progress

Florida and Texas, two states that have emerged as the latest hot spots of the U.S. coronavirus outbreak, both reported new single-day record increases in confirmed Covid-19 cases on Saturday – with nearly 20,000 additional infections combined.

The recent surge, most pronounced in Southern and Western states that were among the last to impose restrictions at the outset of the pandemic and the first to relax them, has alarmed public health officials.

The pandemic’s trajectory remains the main source of uncertainty for investors and more than 40% of the U.S. has now reversed or placed reopenings on hold, analysts at Goldman Sachs (NYSE:) said in a recent note, with renewed containment measures set to add to the problems in the labor market.

2. Light week for U.S economic calendar

On Monday, the Institute of Supply management reports its survey of U.S. , with economists forecasting a move back into positive territory. Meanwhile, data firm IHS Markit will publish data on U.S. .

Thursday’s weekly report on will be closely watched as the level of new layoffs continues to remain elevated even as businesses reopen, a sign the recovery in the labor market will be slow, economists say.

Also Thursday Walgreens Boots Alliance (NASDAQ:) reports quarterly results and data on U.S. is due out on Friday.

3. Second half gets underway

After finishing the first half of 2020 on a high, market bulls are going into the second half buoyed up by signs of an economic rebound and hopes for a vaccine. Economic data out of Europe and China is also indicating that a recovery is underway, and the upcoming earnings season may offer proof of earnings bottoming out.

But several obstacles still loom. It is still unclear whether the U.S. Congress will extend a scheme supplementing jobless benefits beyond July 31. The run-up to the U.S. presidential election in November will be choppy, especially if Democrat Joe Biden extends his poll lead. And the EU needs to agree on a $750 billion recovery fund proposal.

Investors also worry about authorities getting cold feet as debt levels mount. There are no indications of that so far, but any sign of policymakers easing up on stimulus measures could spell trouble.

4. Euro area challenges ahead

Germany has just taken over the six-month rotating presidency of the European Union as the bloc faces its deepest recession since WW2.

EU leaders must agree on a multi-year budget of over 1 trillion euros ($1.1 trillion), launch a recovery fund for economies hit hardest by COVID-19 and clarify its future relationship with post-Brexit Britain.

A meeting of euro area finance ministers on Thursday could be telling before a looming July 17-18 summit – crucial to securing agreement on a recovery fund.

Germany wants to use its time in the EU presidency to make Europe strong again; a recovery fund agreement would certainly help. Markets are hopeful that solidarity will prevail – the is up over 5% since March but optimism could fade if bickering sets in.

5. Brexit talks rumble on

Last week’s round of Brexit talks broke up a day early amid “serious” disagreements between the two sides, with the EU’s chief negotiator, Michel Barnier, complaining of a lack of respect and engagement by the British government.

The two sides are due to resume talks this week in London but seem unlikely to yield any more success.

Britain left the world’s largest trading bloc on Jan. 31, but there has been little progress on designing a new relationship with a year-end deadline looming. Both sides had hoped last week’s negotiations would reboot the process.

–Reuters contributed to this report