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Pier Carlo Padoan, the Italian finance minister, has denied that Italy’s banks are suffering from systemic problems and rejected a “bail-in” of private investors as he sought to reassure global markets over the state of Italy’s financial institutions.

“We are going in the right direction, there is no risk in terms of systemic stability,” Mr Padoan said at the end of the G20 meeting of finance ministers and central bank chiefs in the Chinese city of Chengdu on Sunday, adding that there were a few “contained” critical cases.

The Italian reassurances came as the G20 pledged to use “all policy tools” to support growth, saying they were ready to respond to any negative fallout from Brexit amid uncertainty over protectionism and Britain’s future relations with the EU.

“The outcome of the referendum on the UK’s membership of the EU adds to the uncertainty in the global economy,” read a joint communiqué released by China’s finance ministry. “Members of the G20 are well positioned to proactively address the potential economic and financial consequences stemming from the UK referendum. In the future, we hope to see the UK as a close partner of the EU.”

Global risks from Brexit dominated the two-day meeting. Philip Hammond, the UK’s newly appointed chancellor of the exchequer, said negotiating partners had expressed optimism about bilateral relations. He said: “Among the non-EU G20 colleagues, they’ve all spotted the significant opportunities that there are for greater trade and the potential to do direct bilateral trade deals in the not too distant future with the UK.”

Mr Padoan’s comments come ahead of a key week for Italian banks, which will be closely watched when the results of European-wide stress tests are published on Friday, possibly leading one or more of them to rush to raise new capital.

Jack Lew, the US Treasury secretary, met Mr Padoan on the sidelines of the G20, saying that while Europe’s banking system was stronger due to reforms put in place in recent years, more work remained, and banks should continue to clean up their balance sheets.

The Italian banks have been disproportionately hit in the market turmoil following last month’s Brexit vote because they are saddled with non-performing loans dating back to the recession.

Results of the stress tests raise the prospect of a public injection of cash by the Italian government, which would probably involve a hit to private investors in the banks under tough EU state aid rules. But Italy has also been trying to arrange a private-sector rescue to avoid such a scenario and Mr Padoan ruled out a so-called bail-in “for the moment”.

The G20’s call to use “all policy tools” echoes similar language at a meeting in Shanghai in February and contained no concrete commitments on fiscal stimulus. Policymakers broadly agree that scope for further monetary policy stimulus is limited but faultlines remain over more aggressive moves.

In addition to Brexit, full-throated protectionism expressed by Donald Trump, US Republican presidential nominee, is also rattling global confidence.

The G20 communiqué cited “geopolitical conflicts, terrorism, and refugees” as further sources of economic uncertainty.

Mr Lew and his Chinese counterpart Lou Jiwei agreed to work together to cut global excess capacity in sectors including steel and aluminium. They will also work on new global guidelines on government provision of export credit, amid complaints that Chinese companies unfairly benefit from government support. Mr Lew expressed support for multilateral negotiations on cutting steel capacity.

Tech investors are a discerning bunch these days—a harsh reality that is pressuring Apple Inc. more than it deserves.

In this yield-starved environment, stock investors are attracted to steady income. This would benefit Apple, except that like other former highfliers, it has been tossed out by investors. The iPhone giant’s shares have slid 6% this year and 21% over the past 12 months. While some of that is justified as iPhone sales have slowed, the selloff also looks overdone heading into Tuesday’s earnings report.

Apple at least has a low bar to hurdle. Analysts polled by FactSet estimate fiscal third-quarter earnings of $1.40 a share, down 24% from the same period a year ago. That estimate has fallen from $2.01 in November. Revenue for the period ending in June is expected to have dropped 15% to $42.1 billion, which would be Apple’s second consecutive quarterly sales decline.

Much of the bearish thesis is due to weakening iPhone sales, which account for more than half of revenue. The iPad isn’t selling as well as it used to and the jury is out on the Apple Watch. Tech investors are allergic to anemic growth, which explains why the tech-heavy Nasdaq has lagged behind the Dow industrials and S&P 500.

Still, Apple has been punished more than enough. The iPhone slump appears priced in. And while the next iPhone, expected later this year, likely won’t be a significant upgrade, there is optimism that sales growth will soon bounce back. Analysts forecast iPhone unit sales will rise 5% for fiscal 2017, which ends next September.

Apple is the sort of stock that investors love these days. It plans to spend $250 billion on dividends and buybacks by March 2018, which would boost earnings per share and yield. Already, Apple’s 2.3% dividend yield is well above the 10-year Treasury yield.

Apple remains wildly profitable, too. Its $10.52 billion profit in the March quarter easily surpassed combined profits of Alphabet Inc., Amazon.com Inc. and Facebook Inc.

And its valuation is compelling. Shares fetch 11 times projected earnings, a 34% discount to the S&P 500. By that measure, the stock is the cheapest it has been in at least the past 15 years.

This Apple deserves another bite.

Stock prices closed at all-time highs for the second week in a row. The fireworks weren’t as impressive as the previous week, when at least one major index set a new high each day, but the market finished Friday with a flourish.

The Dow Jones Industrial Average rose 54 points, or 0.3%, to close at 18,570.85, just inches below its record high of 18,595.03, hit Wednesday. The Standard & Poor’s 500 index picked up 13, or 0.6%, to 2175.03, a new high. The Nasdaq Composite rose 1.4%, to 5100.16.

Still, it was an up and down week, due partly to second-quarter earnings reports that tugged the market one way and then the other. Soft results from the transportation sector and from Intel (ticker: INTC) Thursday cooled off a market that had shot up on a strong report from Microsoft (MSFT) the previous day.

Markit said Friday that its July preliminary U.S. Manufacturing Purchasing Managers Index (PMI) rose to 52.9, above expectations and the highest in nine months. Markit’s Eurozone Composite July PMI data fell less than feared. Even hints from the Federal Reserve that it could raise interest rates before year end didn’t sidetrack the bull—for now.

The package of stronger economic data was helpful, says Quincy Krosby, Prudential Financial’s markets strategist. Though earnings weren’t great, the tone is more positive and suggests—with more companies yet to report—that the profits-growth recession is lessening, she says. Rightly or wrongly, that’s led to an easing of worries about Brexit.

Some issues should be capping market enthusiasm—whether uncertainty about the U.S. elections or long-term Brexit fallout—but the market doesn’t seem to care, according to Mark Luschini, chief investment strategist at Janney Montgomery Scott. “The path of least resistance is up,” he says.

Investors are looking past the second quarter and “borrowing” earnings growth from the balance of the year and 2017, he adds. The “sturdy” U.S. economic data mean the Fed will likely hike interest rates by year end, Luschini says, and a September hike isn’t off the table “if the data holds up.”

There’s some rally-chasing going on, adds Seth Setrakian, president of Spectrum Capital Management. “Everyone who was panicked a month ago after Brexit can’t help themselves buying now,” he says. Setrakian, who also says a September Fed rate hike is on the table again, is worried about the next few months. Commodity prices are soft, the dollar is strong, and there’s continuing uncertainty about the elections, he says. “The market doesn’t care…until it does.”

The Chicago Board Options Exchange Volatility Index, or VIX, at 12.02, is at two-year lows, Setrakian points out. The VIX is used as an indicator of complacency and moves inversely to stocks. With a VIX below 13, “stocks should be harvested,” he avers.

Short-term caution is called for. August is traditionally a month of low activity and profit-taking, while September is historically the worst month for stocks. This week sees a Fed meeting Tuesday and Wednesday. No hike is expected, but the Fed might give more hints about the future. On Friday, U.S. second-quarter GDP data and the employment cost index will be released.

It’s been one month since the stunning Brexit referendum, in which voters decided that the United Kingdom will leave the European Union. The British stock market hasn’t yet tumbled into the dust.

Indeed, Barron’s spoke last week with a handful of portfolio managers who run U.S. mutual funds that invest in British stocks, and their sentiments were fairly upbeat.

“Net net, we’ve increased our holdings in U.K. stocks,” says David Herro, the veteran international stockpicker who oversees the $23.6 billion Oakmark International fund (ticker: OAKIX), which had more than 14% of its holdings in U.K. companies as of June 30. Since the Brexit vote, he says, “prices went down a lot more than their intrinsic value.” He especially favors U.K. financial stocks.

One stock Herro likes is Lloyds Banking Group (LLOY.UK), which is down 22% since the Brexit referendum in local currency. Still, at 56.20 British pence late last week, the stock was off its low of 47.55 pence, set on July 6. The bank is well-capitalized, he says, with a strong franchise.

Though not everyone is as optimistic as Herro, there is definitely a sense that British stocks are stabilizing, now that the dust has settled a bit.

Europe-focused stock funds, many of which have big weightings in British equities, were down an average 1.42% in the past month, according to Morningstar. That’s not great, but it’s nowhere near as bad as it could have been, especially considering how bleak the mood was in the first few days after the vote, when Britain’s political leadership appeared adrift.

Big questions about Britain’s future remain, notably what kind of impact, economic and otherwise, that separation from the EU will have on the island nation. At least the political crisis has been settled for now, with a new prime minister, Theresa May of the Conservative Party.

SOME MANAGERS SEE two very different stock markets developing in Britain.

The FTSE 100 Index, a benchmark of very large U.K.-based companies that tend to have a lot of international business, is up 6.2% in local currency since the referendum. The FTSE 250, which is considered more of a proxy for domestic-focused companies in the U.K.—including those in such sectors as real estate and retailing—was down 2%, but well off its late-June lows.

“Generally speaking, companies that have benefited from a weaker sterling have gone up, while companies that are more domestically focused have gone down,” says Stephen Docherty, head of global equities at London-based Aberdeen Asset Management. Since the Brexit vote, the pound has lost about 10% of its value against the greenback, though it has bounced back off its lows.

Many of the U.K. companies Aberdeen holds earn a big percentage of their profits from overseas business. That includes Royal Dutch Shell (RDSB.UK), which was among the top holdings in the $477 million Aberdeen International Equity fund (GIGIX) as of June 30. Most of the fund’s top holdings are based outside of the U.K., however. Its post-Brexit performance of 2.42% surpasses 94% of its foreign large-cap-blend peers.

A WEAKER BRITISH CURRENCY should help multinational U.K. companies, Docherty says. But “domestic growth forecasts are coming down for the U.K. economy, and there is the possibility that inflation picks up through a weaker sterling,” he adds. That, in turn, could lead to higher interest rates—which bodes ill for companies reliant on the British market.

Paul O’Connor, a portfolio manager at Henderson Global Advisors in London, says that the two funds for U.S. investors he helps run have very little exposure to domestically focused U.K. companies. One of them is the $4.8 billion Henderson International Opportunities fund (HFOAX), which as of June 30 had more than 15% of its assets in British holdings. Its post-Brexit return is around 1%, putting it in the top 40% in Morningstar’s foreign-large-blend category.

O’Connor doesn’t expect investor sentiment to improve for domestically focused U.K. companies in the near term. “I don’t see the bounce until the economic and political uncertainty can lift,” he says, “and I don’t see that happening for a long time.”

Not every manager Barron’s spoke to is keen on the U.K. market. David Marcus, who runs the $327 million Evermore Global Value fund (EVGBX), says he has not held a British stock in about three years—though some 70% of the fund’s assets are in European holdings.

U.S. fund managers, he says, have been crowding into the U.K., which he sees as a market whose multiples “were not compelling.” The Brexit vote and its aftermath were not enough of a catalyst to change his mind.

Still, Marcus says, “You will have good days and bad days over the coming months as this starts to kick in. That’s going to create value.”

Britain’s Nuclear Decommissioning Authority is in the High Court this week for the final ruling in a long-running damages claim on a £7bn deal to clean up Britain’s oldest nuclear power plants.

Energy Solutions, a US-based company, filed a high court writ in 2014 after losing the contract to engineering company Babcock and Texas-based Fluor.

It had been managing the nuclear sites for 14 years and in documents filed to the court alleged that the NDA did not follow its own procedures when the new contract was awarded and that its point scoring system was flawed.

It is trying to recoup the bid costs as well as the projected loss in profits over the life of the new 14-year deal.

At the heart of the dispute is one of the largest contracts ever put out to tender by the government, which involves about 3,000 workers cleaning 12 of Britain’s 25 nuclear sites. These include Sizewell, Hinkley and Dungeness — built in the 1960s to produce plutonium to make nuclear weapons but now at the end of their lives.

If the NDA loses the case it could cost the government hundreds of millions of pounds and will again raise questions over the way large and sensitive public-sector contracts are awarded.

The judgment is expected on July 29 and will rule whether the NDA made serious errors in awarding the contract. If so, there will be further hearings, which could stretch into 2017, to decide any payment for damages.

Although Energy Solutions competed for the contract in partnership with the US company Bechtel, Energy Solutions is taking legal action alone.

Energy Solutions, which has since been taken over by the construction and support services company Atkins, declined to comment. Atkins said it had “no economic interest in or any control over the resolution of the . . . claim, which has been retained by the remaining part of the Energy Solutions business”.

A series of botched contracts has raised concerns over the government’s procurement processes. The referral of G4S and Serco to the Serious Fraud Office for overcharging on electronic tagging contracts for offenders and the West Coast main line rail franchising debacle two years ago are among examples.

In 2012, FirstGroup won a 13-year deal to manage the rail network linking London to Scotland, only for Virgin Trains to challenge the decision in court and eventually force a government U-turn.

An NDA spokesperson said: “We continue to await the judgment being handed down and cannot comment before this time.”

Surge in rig count with production growth blended less productive older rigs with more efficient newer ones

We are at the bottom. That was the message of Paal Kibsgaard, Schlumberger’s chief executive, presenting the oil services group’s results last week. The rig count figures bear him out; Baker Hughes’ survey of rigs active in the US has risen from 404 at the end of May to 447. Rising rig numbers are a sign that it is once again profitable to drill for oil and gas. But oil traders keep an eye on them to gauge the potential for new supply.

When US onshore oil production was declining, the US rig count did not matter much. The arrival of shale oil, fracked from onshore fields, has changed that. US oil production nearly doubled in the decade to 2015, driven by the success of onshore drilling. Yet the surge in the rig count that accompanied this production growth blended less productive older rigs with more efficient newer ones.

As the oil price fell two years ago, explorers quickly began to shed less effective equipment. Rig counts fell sharply last year (from 1,800 to 700) partly for this reason: the quickest way to cut costs was to eliminate lesser quality equipment. The result is that productivity, in terms of barrels per rig, from each new well there has doubled in the past couple of years. If this improvement is permanent, then one would expect a sharp pick up in oil output as the rig count increases

Shale wells tend to produce a lot of oil quickly, but decline rapidly thereafter. Production can often halve in the first year before stabilising. One reason that onshore oil production has fallen is this natural decline from “legacy” wells. But that decline rate has stabilised as fewer new wells come on stream; meaning less of a drag on overall production. Another plus for supply, and potential negative for prices. Mr Kibsgaard’s optimism may prove premature.

Geopolitical concerns allow Beijing to return to role it prefers—showcasing its growing clout

CHENGDU, China—A few short months ago, China’s economic problems were fueling global panic in markets and drawing unwanted attention and rebuke by the world’s largest economies.

Now, China’s economic challenges have taken a back seat to more pressing geopolitical concerns among finance ministers and central bankers from the Group of 20 largest economies, allowing Beijing to return to the role it prefers: showcasing its growing clout on the world stage.

At the conclusion of two days of talks Sunday, the G-20 redoubled calls to use all available policy tools to boost output, wary of mounting headwinds that threaten to tilt the global economy into a low-growth rut. Finance leaders also repeated a commitment to avoid using exchange rates to gain a competitive advantage and vowed to consult closely on exchange-rate policy.

International Monetary Fund economists and many G-20 finance chiefs expressed concern that policy makers are relying too heavily on monetary policy to goose growth, calling for more economic restructuring to boost productivity and additional budget stimulus where possible. “Monetary policy alone cannot lead to balanced growth,” the G-20 said.

Britain’s surprise vote to leave the European Union, Turkey’s recent coup attempt, a series of horrific terror attacks, souring global growth prospects and threats of an Italian banking crisis dominated the weekend gathering of the world’s finance chiefs. July’s meeting in Chengdu stands in contrast to the last G-20 finance leaders’ meeting, held in February in Shanghai.

Then, fears of a China-induced currency war and an economic meltdown in the world’s second-largest economy left the host nation on the defensive. The Chengdu meeting was the last major G-20 event before the financial group’s September summit in Hangzhou.

“The Chinese economy is a ‘stability anchor’ for the global economy,” Premier Li Keqiang said Friday ahead of the meeting of the G-20, which acts as the world’s economic executive board. “Prophecy of China’s economy heading for a hard landing is rarely heard now.”

China continues to face questions about its currency policy and its steel exports, amid concern that overcapacity could become a global flashpoint in much the way that currency policy has been over the past decade. Another worry: China’s rising metal exports could worsen the weak inflation problem that central banks are grappling with around the world.

Foreign industries and their governments accuse the country of undercutting their markets unfairly by selling goods at prices below the cost of production. But those worries currently pale against much hotter fires elsewhere in the world.

“Brexit, the Turkish coup, and the U.S. elections have certainly helped redirect attention away from China,” said Standard Life Investments Ltd. economist Alexander Wolf, adding that markets often have a “limited attention span.”

The U.K. vote to leave the EU has cast a pall over the global economy, prompting the IMF to downgrade its outlook and warn that growth could slip dangerously lower if U.K. and EU leaders don’t quickly address investor concerns about their future together. The coup against Ankara’s leadership revived political-risk worries in many emerging markets. And Republican presidential candidate Donald Trump’s talk of hiking tariffs is spurring worries the U.S. could pull the world into a global trade war.

Meanwhile, G-20 officials say Chinese management of the economy has risen to the challenge. Beijing has recalibrated its communication on exchange-rate policy and monetary and fiscal policies after global markets shuddered under what many said last year were management missteps.

“China is undergoing an important structural transformation,” said Italian Finance Minister Pier Carlo Padoan. Unlike earlier this year and last, no officials at the Chengdu G-20 mentioned China’s economy as a fundamental vulnerability to the global economy, Mr. Padoan said.

“Any transition has bumps here and there, but the overall direction of the change has been positive,” he said.

Beijing has taken active steps to restore confidence, repeatedly pledging since February not to depreciate the currency for competitive advantage. That helped allay fears of an imminent currency war.

The Asian powerhouse has also benefited from the Federal Reserve’s decision to delay an interest-rate increase, allowing authorities here to gradually depreciate the yuan, also known as the renminbi or RMB, without alarming investors.

“China has committed to moving in an orderly way toward a more market-oriented exchange rate,” a senior U.S. Treasury official said. “I’ve observed over the last months…a willingness to actually intervene to support the RMB to keep the RMB from depreciating more.”

China in recent months addressed fears of a financial crisis sparked by a flood of capital leaving its shores by tightening bank supervision, cracking down on unauthorized foreign-exchange traders and making it more difficult for customers to exchange funds. Foreign-exchange reserves have declined by $30 billion to $40 billion a month recently, compared with a $514 billion decline in 2015 and nearly $100 billion in January.

Also fueling the world’s more sanguine view of China, economists say: policy makers’ view that more fiscal spending, greater stability of capital outflows and other moves to curtail volatility are important as global growth slows, issues that play to China’s strength.

Beijing answered global concerns that its economy was slowing faster than it acknowledged by injecting a flood of money into the financial system, frontloading infrastructure spending and easing restrictions on its massive property sector. That saw second-quarter growth match the 6.7% rate in the first quarter, which was the economy’s slowest pace since the global financial crisis.

The stimulus keeps China’s economy humming along, allowing Beijing to claim economic stability and put growth on track to hit the government’s annual target of 6.5% to 7%.

But, many economists caution, China may be buying growth now at the expense of output later.

The return to credit-fueled growth pushes up already-high corporate debt levels, fuels the problem of industrial overcapacity, blunts reform efforts and sets back efforts to shift the economy from state-directed growth.

“There is already a big problem of impaired loans which are on banks’ books which have not really been dealt with,” said IMF chief economist Maurice Obstfeld. “There needs to be a re-intensification of efforts in that area.”

Economists warn medium-term risks in China are rising. Standard & Poor’s Financial Services says corporate-credit quality is deteriorating faster than at any time since 2009. Corporate debt levels are estimated at 145% of gross domestic product, up from less than 100% of GDP in 2007.

Those levels, the IMF says, “are high by any measure.”

The assets of the largest funds tracking the Italian markets have fallen sharply since the beginning of the year as the country prepares for a referendum on its constitution and its banking sector flirts with collapse.

Investors have fled funds as a stand-off over contentious bank “bail-in” rules — disliked by Italy’s centre-right government — intensifies ahead of the publication of stress-test results on Friday.

The iShares MSCI Italy Capped exchange traded fund, run by BlackRock, the world’s largest asset manager, has lost half its assets since January, falling to $543.2m. The iShares Currency Hedged MSCI Italy ETF has also shrunk to half its size and now has $19.2m worth of assets under management.

Two exchange traded funds that focus on Italian stocks run by Deutsche Asset Management are also down since the start of the year — by 18 per cent to $1.79m and 12 per cent to $1.87m respectively.

Arne Noack, director of passive product development at Deutsche Asset Management, said that the funds had not received much interest since their launch in August last year, partly because investors are choosing more diversified investments in an environment of uncertainty. “We are certainly optimistic that demand will come,” he said.

Investor concern about the future of the eurozone has heightened significantly since the UK’s vote to leave the EU. Many cite Italy as the biggest threat to the shared-currency area.

A third of fund managers predict that another EU country will break away from the union in the next three years, according to a survey by Bank of America Merrill Lynch. It also found that 42 per cent of managers have an underweight exposure to Italy compared with benchmarks, in contrast to just over 20 per cent a month ago.

Nicholette MacDonald-Brown, fund manager for a pan-European equity fund at Schroders, Europe’s second-largest listed fund company, said that she only holds three Italian stocks in a portfolio of 50 because very few outside the energy and financial sectors are liquid enough.

“We think the probability of a bail-in is materially lower than that bail-in is not happening,” she said, referring to EU rules that small Italian investors should be held accountable before a bailout from taxpayers.

“But the Italian market is by far the worst-performing country in Europe and the banking sector is the worst-performing sector,” she added.

Data from EPFR, the research house, shows that funds with a mandate to invest in Italian equities have experienced $4.1bn of outflows since the beginning of the year.

The chairman of Assogestioni, the Italian fund association, said that investors were waiting for a “whatever it takes” moment on banks. “The view is clearly gloomy,” said chairman Tommaso Corcos. “But it is not a specific Italian problem, it is a global issue. Banks around the wold are priced, on average, well below book value.”

But Michel Leblanc, manager of the eurozone small and mid-cap fund at Lombard Odier, the Swiss fund house, said his fund is 11 per cent invested in Italy, compared with a benchmark of 8 per cent. He said he avoids banks almost entirely and chooses companies that make most of their revenues abroad.