First-hand: The perplexing state of being in quarantine
I can go to Italy but cannot walk the dog.
Days into a fortnight-long quarantine after a visit to Portugal, nobody it seems will prevent me from leaving the UK again.
Authorities can knock on my door any time during my self-isolation to check I am adhering to the rules or call me on a number stated on my passenger locator form that I submitted on re-entry to UK soil at London’s Stansted airport.
Holidaymakers and travellers to the UK from Spain, South Africa, Luxembourg, the US and several other countries face the same plight. On Saturday Belgium, Andorra and the Bahamas became the latest to be removed from the government’s “travel corridor” list, which includes about 75 countries that are exempt from self-isolation rules. Other countries, such as France, Netherlands, Malta and Germany, face a rising case count.
“In England you must only exercise within your home or garden. You cannot leave your home to walk your dog,” the government guidelines state.
However, the self-isolation helpline operator assured me that nobody will stop me from going to another country during my quarantine, which will end at midnight on the 15th day after my arrival in the UK. I can go to Milan, Geneva or Ljubljana today if I like.
If one of us develops symptoms, even on the 14th day of quarantine, we will all have to hunker down for another 10 days at home. However, my son, who did not come with us, can leave the house at any time. He works in a restaurant and his boss does not want him to live at home while we are in isolation.
If I don’t follow the rules and refuse to self-isolate, I am liable to a £1,000 fine in England, my Welsh compatriots face the same amount while my Scottish neighbours could be liable for a fixed penalty notice of £480.
The fine in England could rise to as much as £3,200 if I fail to update the contact detail form should I in “limited” circumstances have to move to another place during my isolation period. In Wales, the penalty is capped at £1,920. Failure to provide my contact details in the first place will mean a fine of up to £100, or more were I to break that rule more than once.
Meanwhile, on my trip through London’s Stansted airport, nobody took my temperature or asked to see my completed passenger locator form. The form I filled out in pen for the Portuguese authorities remained in my bag.
The cabin crew on my Ryanair flight are among those exempt and face regular testing.
Still, our flights were fuller than I would have expected with no obvious social distancing either on board or boarding. Some rows were full, with strangers sitting together.
But, if I had chosen to fly to the Azores or Madeira, I’d be at the park now enjoying the summer sunshine with my dog.
Wall Street stocks near record peak after Europe rally
US stocks climbed on Tuesday, following sharp gains in Europe, leaving Wall Street’s benchmark barometer within touching distance of the all-time high it set before the coronavirus-induced market tumult.
The S&P 500 rose 0.5 per cent at the start of trading to around half a per cent below the peak it reached in February, before Covid-19 fears gripped American and global markets. The tech-heavy Nasdaq, which hit a fresh record high on Friday, slipped 0.3 per cent.
The gains in the US followed a broad advance in Europe, with the continent-wide Stoxx 600 rising 2 per cent and London’s FTSE 100 up 2.1 per cent.
Market confidence has been bolstered by a barrage of monetary and fiscal stimulus as well as rising hopes for an effective Covid-19 vaccine.
US producer prices bounce back in July
Prices that businesses receive for their products and services grew more than expected in July, a sign of improving demand as the US economy claws its way back from the damage caused by coronavirus.
The producer price index rose a seasonally adjusted 0.6 per cent against the prior month, compared with a 0.2 per cent drop in June, according to figures published by the US Bureau of Labor Statistics on Tuesday. Economists had anticipated a 0.3 per cent rise.
In services, prices for portfolio management helped push the index higher. Machinery and vehicle wholesaling, car retailing and long-distance motor carrying also posted gains. Petrol prices, up 10.1 per cent, contributed more than one-third of the advance in prices for goods, offsetting declines in prices for meat and residential natural gas.
The so-called core PPI, a closely watched gauge that excludes trade services and volatile food and energy prices, remained steady with an increase of 0.3 per cent.
US stock futures held on to gains following the report. Futures for the S&P 500 were up 0.5 per cent. The benchmark index closed on Monday less than 1 per cent away from a record high.
US supermarket group Kroger to expand online delivery service
US grocery group Kroger is to double the number of products available to consumers through an online delivery service, firing another shot in the battle for e-commerce supremacy.
The Ohio-based company said it had accelerated plans for the expansion of the service, known as Kroger Ship, given the greater interest from customers in online shopping during the coronavirus pandemic.
The number of products on Kroger Ship, which launched two years ago, will double to 100,000 from the autumn, as the company plans to open the platform to third-party market-place vendors.
The new items will cover several categories, including organic and international food, as well as housewares and toys.
S&P 500 close to all-time high
US stock futures rallied on Tuesday, leaving Wall Street’s benchmark barometer poised to open within striking distance of the all-time high it set before the coronavirus-induced market tumult.
S&P 500 futures climbed 0.7 per cent in early US trading a day after the index closed within 1 per cent of the historic peak it reached in February before Covid-19 fears gripped American and global markets.
International equities also advanced on Tuesday, with Europe’s Stoxx 600 rising 2 per cent and London’s FTSE 100 up 2.4 per cent. MSCI’s broad index of markets in Asia advanced 1.1 per cent.
Market confidence has been bolstered by a barrage of monetary and fiscal stimulus as well as rising hopes for an effective coronavirus vaccine. Russia on Tuesday said it had approved its vaccine for use beyond clinical trials, while potential immunisations being developed by big drug companies around the world have shown promise.
Auckland to return to lockdown after first New Zealand cases in 102 days
Jamie Smyth in Sydney
New Zealand has reported its first coronavirus cases outside of quarantine facilities in more than 100 days, prompting the government to order the lockdown of Auckland, the nation’s most populous city, for at least three days.
Four members of the same family tested positive for Covid-19 and the source of the infection remained unknown, the prime minister said on Tuesday. The family had not travelled overseas, which suggests the return of community transmission of the virus for the first time in more than three months.
Jacinda Ardern said it was best to “go hard and go early” to stamp out the virus. From Wednesday at noon Auckland would be placed in a level three lockdown with non-essential workers and schoolchildren asked to stay at home.
Other parts of the country will face less severe restrictions but these will include the introduction of social distancing rules and limiting mass gatherings to less than 100 people.
“We need to take a much more precautionary approach until we can find the source of this case and make sure that we reduce the risk of the wider spread,” said Ms Ardern.
In March New Zealand imposed one of the world’s strictest lockdowns and targeted elimination of Covid-19, rather than the suppression strategy pursued by most other nations.
It enjoyed remarkable success and had not experienced community transmission of the virus for 102 days until the latest outbreak, that was announced today. This has enabled the nation to lift most restrictions and life to return to normal, except for strict border controls.
Ms Ardern, who faces an election in September, has until now enjoyed strong public support for her tough Covid-19 strategy.
BoE willing to step up support, deputy governor tells Times
Delphine Strauss in London
The Bank of England will step up the scale and pace of its asset purchase programme if needed to stabilise markets or support the economic recovery, according to its deputy governor.
Dave Ramsden, a member of the BoE’s monetary policy committee, told the Times that the central bank still had “significant headroom” to do more quantitative easing if needed to hit its inflation target, adding: “We also have other tools as well.”
His comments reinforce the message given by governor Andrew Bailey last week when the BoE published new forecasts for the UK economy, suggesting the initial recovery from lockdown would be faster than expected but the recovery to pre-pandemic output levels slower.
The central bank last week left interest rates on hold at 0.1 per cent and its target for the stock of bond purchases unchanged at £745bn, but said there were big downside risks to its forecasts. Mr Bailey signalled that policymakers stood ready to step up stimulus if the recovery weakened.
Mr Ramsden said a key factor for policymakers would be how much unemployment rose.
“A key outcome is what happens to the labour market. Some companies are going to go under. Some jobs are going to be lost,” he told the Times. “Unemployment peaks [in the BoE’s forecast] at 7.5 per cent but the risks are that it will be higher than that.”
Investors are pricing in a £100bn expansion of the asset purchase programme in the autumn.
Investor sentiment on Germany’s economic outlook brightens
Harry Dempsey in London
Investors have renewed their confidence in Germany’s recovery, after economic indicators showed the eurozone’s largest economy has rebounded at a faster pace than its peers in recent months.
Sentiment about the economic outlook shot up by 12.2 points to 71.5 points this month, after falling in July, to reach its highest level of optimism since January 2004, a poll of 178 German investors found.
The August reading from the Zew survey significantly beat economists’ expectations for a mild fall to 58 points.
“Hopes for a speedy economic recovery have continued to grow, but the assessment of the situation is improving only slowly,” said Achim Wambach, president of Zew. “Experts expect to see a general recovery, especially in the domestic sectors.”
Poor earnings expectations for banks and insurers over the next six months remain a cause for concern, Mr Wambach said.
Sentiment about the economic development of the eurozone also improved, with the indicator for the bloc’s outlook climbing 4.4 points since the previous month to a 64.0 points.
Yet measures that record investors’ assessments of the current economic situation for Germany and the eurozone slipped slightly lower in August.
Russia registers first coronavirus vaccine, Putin says
Henry Foy in Moscow
Russia has registered the world’s first vaccine against Covid-19, president Vladimir Putin said on Tuesday.
“As far as I know, this morning, for the first time in the world, a vaccine against the coronavirus infection has been registered here,” Mr Putin said at a televised meeting with government officials.
“I know that it works quite effectively, it forms a stable immunity,” Mr Putin said. “I repeat: it has passed all the necessary tests.” Mr Putin added that one of his own daughters had been administered the vaccine.
Moscow had vowed to win the race to develop an effective vaccine, ahead of western pharmaceutical giants. It has sought to race through testing and trial procedures in a bid to get the vaccine approved.
Russia’s state wealth fund had backed a number of potential vaccines developed by government research agencies and has said it expects to begin vaccinations this autumn.
Turkey cuts access to cheap funding
Turkey has cut banks’ access to cheap lira funding in a move analysts said was aimed at lifting borrowing costs, even as its leader Recep Tayyip Erdogan has insisted rates must be kept low.
The central bank said on Tuesday morning liquidity limits for primary dealers would be reduced to zero, effective on Wednesday.
Analysts said the move was effectively a backdoor rate increase during a time when the lira had plummeted to record lows on worries over the country’s loose monetary policy, foreign investment outflows, elevated inflation and deteriorating foreign currency reserves.
Investors were also increasingly concerned over a continuing shift by Turkish residents out of the lira and into hard currency such as dollars, said Tim Ash at BlueBay Asset Management.
Paul McNamara, fund manager at GAM, said Tuesday’s move would raise borrowing costs by reducing the amount of lira available on the market within Turkey.
Higher interest rates are key to steadying the lira, according to many analysts and investors. However, Mr Erdogan holds the unorthodox view that low rates stoke inflation and has repeatedly during this and previous times of currency-market tumult insisted they be held at low levels.
Low borrowing costs are also at the centre of Mr Erdogan’s long-running strategy to pursue a credit-fuelled boost to Turkey’s economy, one of the largest emerging markets.
“God willing, they will go down further,” Mr Erdogan said on Monday evening, referring to interest rates, according to Bloomberg.
The types of unconventional rate increases announced on Tuesday have been used by Turkey several times in the past, though typically, the central bank has had to later raise its main rate to stabilise the lira.
Mr Ash said:
The problem with this kind of tightening is that it is flexible, and seen as temporary – the [central bank] can turn it on or off on a daily basis. The market needs to believe that the [central bank] is going to tighten policy and keep policy tight for an extended period. And this needs proper rate hikes – the base rate needs to be increased.
The lira was recently up about 0.5 per cent on the dollar at TL7.292, having hit a record low of TL7.3652 on Monday.
South Korea’s economy to contract by less than expected, OECD says
Song Jung-a in Seoul
The OECD predicted on Tuesday that the South Korean economy would shrink less than expected this year, helped by Seoul’s quick and effective response to the coronavirus pandemic.
In its latest report on South Korea, the Paris-based organisation of developed economies raised its forecast for Asia’s fourth-largest economy to a 0.8 per cent contraction in 2020 from a 1.2 per cent fall it predicted in June. The revised forecast marks the highest growth estimate among 37 OECD member countries and far better than the OECD average of a 7.5 per cent contraction. The organisation said in a report:
Economic activity has contracted less in Korea than in other OECD countries, thanks to the prompt and effective reaction of the authorities to contain the spread of the Covid-19 virus and to the wide-ranging government support to households and businesses.
South Korea’s economy shrank 3.3 per cent in the second quarter from the previous quarter as the pandemic pummelled exports and consumption. But the OECD projected domestic spending to perform better while exports are likely to worsen due to the global recession.
It cautioned that the global recession would slow South Korea’s recovery as the pandemic “generates strong headwinds”.
“Huge uncertainty surrounds global economic prospects and hence the outlook for exports, which are a key engine of the Korean economy,” the OECD said. “The crisis will have a lasting effect on some economic sectors and therefore require significant resource reallocation.”
The OECD advised Seoul to maintain accommodative monetary policy and expansionary fiscal policy to cope with the economic fallout of the pandemic. The Bank of Korea has cut South Korea’s benchmark interest rate to a record low of 0.5 per cent while the government has rolled out unprecedented stimulus packages worth Won277tn ($233bn) so far.
IHG keeps adding rooms even as group swings to a loss
Alice Hancock in London
InterContinental Hotels Group, the owner of the Holiday Inn brand, said that it had signed deals for an average of one new hotel a day in 2020 despite falling to a loss due to coronavirus.
Keith Barr, IHG’s chief executive, said that the company had opened 90 new hotels in the first six months of the year, and signed agreements for 181 more, including 100 new Holiday Inns.
But the group warned that the growth, which was only about half of last year’s level, was not enough to offset steep declines in revenues and profits across its portfolio.
Revenues in the six months to the end of June were $1.25bn, down 45 per cent from the same period last year, while the group slumped to a pre-tax loss of $275m.
Investors have continued to show appetite for hotels despite the industry being hard hit by the shutdown in global travel as a result of the pandemic and the ongoing changes to travel advisories by governments around the world.
Low budget brands such as Holiday Inn have proved particularly popular as cheap, domestic travel is expected to remain resilient in an oncoming recession.
The real estate adviser Colliers last week reported a “surge” in enquiries for hotels in staycation locations in the UK market.
IHG said that 95 per cent of its hotels had now reopened and that its 3,500 economy hotels in the US were operating with occupancy levels above 50 per cent – higher than the current industry average.
UK corporate round-up: Heathrow, Domino’s, Plus500
The number of passengers flying from Heathrow Airport fell nearly 90 per cent in July, as the airline industry struggles to reopen in the face of restrictions on international travel. In July, 860,000 used the airport, a slight rise compared with the previous month but still 88 per cent lower than in the previous year. More than half of those were travelling short haul to Europe following the introduction of a limited set of travel corridors. Sixty per cent of Heathrow’s routes remain grounded. The airport has repeated its call for improved testing to shorten quarantine times.
Domino’s Pizza has had an “encouraging” start to the second half of the year, boosted by the reopening of most of its stores, the return of top-flight football and the government’s VAT reduction on hot food. The group, which has reinstated its dividend, reported a rise in UK sales during the first half of the year, but pre-profit slipped 4.6 per cent to £47.6m as it paused its collection business during lockdown and virus-related costs rose.
Online trading site Plus500 reported a jump in revenues and profit following a surge in online trading sparked by this year’s market turmoil. The group, which used the word “unprecedented” five times in its earnings release, reported total revenue of £564.2m in the first half, up nearly four times on the previous year and in line with guidance released last month. Earnings before interest, tax, depreciation and amortisation (ebitda) rose sharply to $361m, and the group also announced a $67.3m share buyback plan.
Housing developer Bellway said it has seen “encouraging” demand following the reopening of its sales estates. The Newcastle-based company reported a “strong” forward order book of more than 6,500 homes, up from just under 5,000 a year ago. The number of houses it completed in the 12 months to the end of July fell by just under a third as a result of site closures during lockdown.
European stock futures rise on optimism of US stimulus
Futures tracking European equities rose on Tuesday as investors pinned their hopes on Washington pushing through more support measures to limit the economic damage from coronavirus.
London’s FTSE 100 futures were up 0.9 per cent, suggesting that the index would rise at the start of trading. Europe’s benchmark Stoxx 600 futures added 1.1 per cent.
Wall Street’s S&P 500 was set to notch up a further 0.3 per cent gain when trading begins later in the day, as the US stocks index came within 1 per cent of its intraday all-time high on Monday.
Investors are hopeful that US lawmakers would overcome gridlock in Congress to pass a support package that could cushion the economic blow from Covid-19.
“Faith in the recovery and further fiscal stimulus is already being tested in the United States,” said strategists at DWS, the asset management arm of Deutsche Bank. “Given that these are also voters and that elections are looming, we would expect an agreement to be reached eventually.”
Petrofac swings to loss as pandemic delays new contracts
Nathalie Thomas in Edinburgh
Petrofac, the oilfield services company, has fallen to a half-year loss as it was “materially impacted” by the Covid-19 pandemic, which pushed its oil and gas clients to cut back on spending and increased the cost of delivering projects.
The group on Tuesday posted a half-year pre-tax loss of $48m from a profit of $193m at the same point in 2019, as revenues also fell by a quarter to $2.1bn.
Petrofac said the pandemic, which triggered a sharp fall in commodity prices as energy demand slumped, had also caused oil and gas companies to delay tendering new contracts.
The London-listed group, which works on projects from large oil refineries in the Middle East to offshore wind farms in the North Sea, struggled to move workers to and from projects as countries locked down earlier this year, raising its own costs.
It this year unveiled cost cuts of its own – including reducing its global workforce of 11,500 by about a fifth – and said on Tuesday that it is on track to deliver $125m of savings in 2020 and up to $200m next year.
UK loses 730,000 jobs during coronavirus crisis
Delphine Strauss in London
The UK has shed almost three-quarters of a million jobs since the start of the coronavirus crisis, with people earning less and working hours at a record low, official data showed on Tuesday.
The number of UK payroll employees was 730,000 lower in July than in March, according to Office for National Statistics figures based on tax data. The ONS said the drop in payroll employment in May, June and July was largely due to a lack of hiring, rather than redundancies.
However, the number of people claiming out of work benefits also continued to rise in July, reaching 2.7m – more than double the pre-pandemic level.
Meanwhile, the ONS said about 7.5m people were still temporarily away from work in June, with the youngest, oldest and those in manual or elementary occupations most likely to be among their number. Most of these were on furlough but the ONS said there were also about 300,000 people temporarily away from work and receiving no pay.
Total pay, including bonuses, was 1.2 per cent lower in the three months to June than a year earlier, while working hours fell further to a record low.
Despite the huge shock to the labour market, the official unemployment rate remained unchanged at 3.9 per cent in the three months to June: the ONS said this was because it did not include people who were out of work but not actively looking for a new job.
EU’s credit rating can survive stimulus, say agencies
Mehreen Khan in Brussels and Tommy Stubbington in London
The EU’s plan to issue €750bn of bonds to fund its Covid-19 recovery poses no immediate threat to the bloc’s credit rating, according to the biggest agencies, despite big divisions between member states on how to pay the money back.
The 27 EU governments agreed in July a landmark response to the coronavirus crisis by empowering the European Commission to raise €750bn of debt and to hand the proceeds to stricken economies in the form of loans and grants.
The deal included a promise to explore new sources of income — such as a European digital tax or levy on carbon imports. Rating agencies say these taxes will not be crucial in determining how creditworthy the EU’s bonds are.
Read more here
Tony Blair: How to beat Covid-19 in the developing world
Former UK prime minister Tony Blair believes Covid-19 “is the toughest practical challenge for government” that he has ever seen.
He writes in the Financial Times:
For developed countries such as the UK, there is an urgent need for a new strategy. We toyed with the idea of herd immunity, but backed off, rightly, when the mortality rate of such a policy became apparent. So, we transitioned to a policy that looked like eradication, with the lockdown a necessary step to get there, until a vaccine arrived.
Now we should know that eradication is not possible. Containment is. But the only route to that is mass testing of the population to pick up the asymptomatic cases, which appear to be nearly half of the total. Otherwise, we risk resurgence or return to lockdown.
Read more here
Time Out limits print comeback to 3 cities in UK and Spain
Patricia Nilsson in London
Time Out has published its first magazine following a pandemic freeze, but warned that its free printed listings on local urban life are likely to disappear from many of the 40 cities it used to serve.
Julio Bruno, the group’s chief executive, told the Financial Times that the 52-year-old magazine planned to resume print distribution only in London, where the title appeared on Tuesday for the first time in six months, Madrid and Barcelona.
The company will instead focus on its digital platform and food markets. Time Out is unlikely to resume printing in the US and Portugal, with other territories under review by management.
Read more here
Asia property rents fall sharply amid lockdowns
Hong Kong remains the most expensive Asia-Pacific market in almost every property rental segment despite a partial lockdown due to the coronavirus and months of street protests, a survey released on Tuesday found.
Office rentals declined in most cities in the first half of 2020, ranging from a 12 per cent drop in Hong Kong to just a 1.9 per cent decline in Singapore, the survey by Savills found.
However, Hong Kong remained the most expensive office market in the region, with average monthly rates of $267 per sq m.
Seoul recorded one of the few rises in the region with an uptick of 2.6 per cent compared with the previous six months.
Retail space has been severely disrupted by the pandemic, especially for luxury fashion and jewellery outlets and a “structural shift towards ecommerce”, Savills wrote.
Retail rents fell 19.2 per cent in Hong Kong, the biggest regional decline. Coronavirus-related lockdowns had a significant impact, with Sydney, Melbourne and Singapore rents falling by 12.4, 11.5 and 6.5 per cent respectively.
Only Vietnam’s Hanoi, pictured, saw an increase — of just 0.2 per cent — which Savills attributed in part to a “rapid resumption of domestic activity”. It added that Ho Chi Minh City posted a 1.6 per cent decline but “may recover in the second half, depending on the successful containment of a second wave”.
Hotels recorded the largest declines in the first half of 2020, with a 34.1 per cent reduction in rental rates. Cities reliant on foreign tourists saw dramatic declines, including Hong Kong (down 34.1 per cent), Hanoi (33.8 per cent), Sydney (26.6 per cent) and Tokyo (16.5 per cent).
Simon Smith, research director at Savills in Hong Kong, said he expected short-haul travel to recover sooner than the long-haul sector. “Domestic tourists will continue to support the hotel markets of larger, more populous countries such as China,” he said.
Luxury apartment rents also declined, as business activity and labour mobility were affected. Shenzhen rents fell 7.3 per cent, the largest drop in China, while Beijing dipped 1.5 per cent and Shanghai dropped 2.2 per cent.
New Zealand fears new outbreak at aged-care home
A New Zealand retirement village has taken swabs from its residents after several displayed symptoms of a respiratory illness, more than 100 days since the country reported its last local case with no known source, media reported on Tuesday.
The Village Palms Retirement Village in the Christchurch suburb of Shirley advised family members of the illnesses in a letter, the New Zealand Herald reported.
“We currently have several residents on our 1st floor care unit who are displaying symptoms of a respiratory illness,” the letter said, according to the paper. “We have forwarded swabs to the Public Health department to test for Covid-19.”
New Zealand announced an imported case of Covid-19 on Tuesday. A man in his 20s had arrived in Auckland on July 30 from Melbourne, the Australian city now under lockdown after thousands of coronavirus cases emerged in recent weeks.
Global shares rally as investors bet on new stimulus
Hudson Lockett in Hong Kong
Shares across the Asia-Pacific region rallied as investors pinned their hopes on Washington pushing through more support measures to limit the economic damage from coronavirus.
Japan’s benchmark Topix index rose 2.2 per cent on Tuesday as traders in Tokyo returned from a long weekend.
Hong Kong’s Hang Seng index climbed 2.1 per cent while China’s CSI 300 of Shanghai- and Shenzhen-listed shares gained 1.3 per cent.
Australia’s S&P/ASX 200 index was up 1.2 per cent.
There was “no single piece of hard data” driving gains on Tuesday, said Robert Rennie, global head of market strategy at Westpac, but the reopening of markets in Tokyo and Singapore had boosted liquidity.
Chinese internet stocks rose after two consecutive days of losses scythed billions of dollars of market value from these companies.
The country’s technology groups have been under pressure after the US administration unveiled executive orders targeting popular social media apps TikTok and WeChat.
The Hong Kong-listed shares of Tencent, the owner of WeChat, rose 3.5 per cent while ecommerce group Alibaba added 1.2 per cent.
Overnight, Wall Street’s S&P 500 inched 0.3 per cent higher as concerns over rising US-China tensions weighed on markets.
Beijing on Monday sanctioned 11 US citizens in the latest tit-for-tat escalation between the world’s two biggest economies.
China reports 44 new confirmed Covid-19 cases
China’s health authorities reported 44 new confirmed cases on Tuesday, of which 31 were imported and all 13 local cases were identified in the restive region of Xinjiang.
The National Health Commission reported nine cases in Shaanxi, six in Shandong, three in Guangdong, two in Gansu, and one each in Hebei, Heilongjiang and Zhejiang provinces. A further eight cases were recorded in the Shanghai municipality.
China has officially reported 84,712 confirmed cases, including 4,634 deaths, since the pandemic began.
On Tuesday, Hong Kong’s Hospital Authority announced the death of a 79-year-old man from respiratory failure. He was the territory’s 56th Covid-19 fatality.
NYC companies vow to hire more disadvantaged students
Andrew Edgecliffe-Johnson in New York
Some of New York City’s largest employers have agreed to hire 100,000 students from its most disadvantaged communities over the next decade despite the financial pressures and doubts about big cities that have been raised by the Covid-19 crisis.
An initial 27 chief executives from the New York Jobs Council pledged to provide long-term career paths to New Yorkers from low-income and minority communities.
The members of the council span financial services groups such as AIG, BlackRock and JPMorgan Chase; consultancies such as Accenture, EY and McKinsey; and technology companies including Amazon, Google and Microsoft.
Read more here
Postponements and suspensions hit US baseball
Major League Baseball on Monday indefinitely postponed two games between the Detroit Tigers and St Louis Cardinals due to a spreading coronavirus outbreak among the latter team, underscoring the difficulties the US faces in resuming the professional sport.
MLB said in a statement that 17 members of the Cardinals’ organisation — 10 players and seven staff — have tested positive.
The postponements follow the suspension of two of the Cleveland Indians’ main pitchers due to violation of Covid-19 protocols.
The Indians put starting pitcher Zach Plesac into quarantine on Sunday because he had gone out with friends on Saturday night, MLB said. Mike Clevinger, another starter, also broke unspecified rules and is in self-isolation.
IAC places $1bn bet on Las Vegas going digital
Anna Nicolaou and Andrew Edgecliffe-Johnson in New York
Barry Diller’s IAC group has bought a $1bn stake in MGM Resorts, the casino company, for the billionaire mogul’s latest bet in online media: gaming.
Mr Diller on Monday revealed he had accumulated a 12 per cent stake in MGM Resorts in recent months, believing that an established casino operator would be able to transform itself with a substantial online business.
Like other hospitality operators, MGM Resorts has been battered by the pandemic as lockdowns forced it to close its casinos.
Read more here
China car sales recovery accelerates in July
Christian Shepherd in Beijing
A recovery in China’s car sales accelerated in July, as government measures to support the market in the wake of Covid-19 spurred purchases.
Passenger car sales were up 8.5 per cent year-on-year in July, marking the third month of positive sales growth since the pandemic began, the China Association of Automobile Manufacturers said on Tuesday.
The outbreak, which began in Wuhan, set China on course for a third year of declining annual sales. A rollback of tax breaks for small vehicles in the summer of 2018 ended decades of uninterrupted growth in the world’s largest car market.
Sales of plug-in hybrids and battery powered electric passenger vehicles also rose 28.7 per cent, the first month of positive sales since August 2019 when subsidy cuts ended two years of rapid growth in the strategically important sector.
Caam said that local government support for the industry had driven the recovery and called on the policies to be expanded in the second half of 2020 in order to ensure continued sales growth.
Can maker secures lowest borrowing costs for junk bond
Joe Rennison in London and Eric Platt in New York
US aluminium can maker Ball Corporation secured the lowest-ever borrowing costs for a US junk-rated company on Monday, as investors starved of returns shrugged off lingering concerns over Covid-19 in their pursuit for higher yields.
Ball raised $1.3bn through a 10-year bond, paying an annual coupon of 2.875 per cent, according to people familiar with the terms.
It was the lowest borrowing cost clinched in the junk debt market for a 10-year bond, according to financial data provider Refinitiv.
Read more here
Sydney Airport to raise $1.4bn after pandemic halts flights
Jamie Smyth in Sydney
Sydney Airport is raising A$2bn (US$1.4bn) from shareholders to strengthen its balance sheet and restructure its operations in response to the calamitous impact of the Covid-19 pandemic on air travel.
The ASX-listed company said on Tuesday that passenger traffic through Australia’s busiest airport fell by 96 per cent in the second quarter to just 400,000 people and it needed to take action as it remained “unclear” when travel restrictions would be eased.
The company reported an after-tax loss of A$53.6m in the six months to June 30, compared with a profit of A$17.3m in the same period a year earlier.
“Six months into the pandemic, there remains uncertainty as to how long it will take for aviation markets to return to pre-Covid-19 levels,” said Geoff Culbert, chief executive.
“Accordingly, Sydney Airport is taking further decisive action to strengthen its balance sheet and to help ensure it remains well capitalised to meet the challenges presented by an uncertain Covid-19 operating environment.”
The airport has been hammered by the reintroduction of strict travel restrictions in Victoria due to an outbreak of coronavirus in Melbourne, which has brought one of the world’s busiest air routes almost to a halt.
Revenues in the first half of 2020 fell 35 per cent to A$511m on the same period a year earlier, although this includes a period in January and February when travel restrictions had not yet taken effect.
UK retail sales remain robust despite pandemic
Chelsea Bruce-Lockhart in London
UK retail sales remained robust in July as more shoppers returned to the high street following the easing of coronavirus lockdown restrictions, but purchases continued to be focused on life at home, with sales of luxury items subdued.
Sales by value increased 3.2 per cent in July compared with the same month in 2019.
This was the second consecutive month of growth following three months of falling sales, according to data published on Tuesday.
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Singapore GDP contracts a worse-than-expected 13.2%
Singapore’s economy contracted 13.2 per cent year-on-year in the second quarter, in a worse showing than government expectations.
According to Ministry of Trade and Industry estimates released on Tuesday, gross domestic product was expected to fall 12.6 per cent over the same quarter in 2019.
GDP fell an annualised 42.9 per cent in the second quarter from the previous three months, exceeding an estimate of 41.2 per cent.
The manufacturing sector shrank by 0.7 per cent year-on-year, a reversal from the 7.9 per cent growth in the previous quarter.
“Manufacturing output was weighed down by output declines in the transport engineering, general manufacturing and chemicals clusters,” the ministry said in a statement.
Biomedical manufacturing, electronics and precision engineering output grew during the quarter, “supported by better-than-expected demand for semiconductors from the 5G market, data centres and cloud services”.
Singapore’s construction sector contracted by 59.3 per cent year-on-year, following a 1.2 per cent decline in the previous quarter, as authorities fought to control a surge of coronavirus cases among 300,000 migrant labourers.
The city-state’s economy is expected to contract 5-7 per cent in 2020, according to revised forecasts issued on Tuesday.
Advent to pay €1bn for UK parcel group Hermes
Kaye Wiggins in London
US private equity firm Advent International has agreed to pay €1bn for the UK operations of Hermes parcel delivery group, seeking to capitalise on the boom in online shopping amid the pandemic.
The buyout group will acquire 75 per cent of the company’s Leeds-based UK business, which delivers parcels for retailers including Next and John Lewis, from the German mail-order group Otto.
It will also take a 25 per cent stake in its German business.
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Asia stocks gain as US weighs economic support measures
Daniel Shane in Hong Kong
Shares across Asia-Pacific followed Wall Street slightly higher as investors assessed rising US-China tensions and attempts in Washington to pass coronavirus relief measures.
In early trading in the region on Tuesday, Japan’s Topix index gained 1.2 per cent as the Tokyo market returned from a public holiday. South Korea’s Kospi benchmark added 0.8 per cent while Australia’s S&P/ASX 200 was little changed.
Hong Kong’s Hang Seng index and mainland China’s CSI 300 open later in the morning. Futures trading suggested that both indices would rise slightly.
Overnight on Wall Street, gains for the S&P 500 were capped by concerns over US-China tensions after Beijing sanctioned 11 US citizens in retaliation to similar measures by Washington. The index closed 0.3 per cent higher.
Investors are also closely watching manoeuvres in the US capital as lawmakers negotiate over new support measures intended to relieve the world’s biggest economy from the impact of coronavirus.
Futures tipped the S&P to fall slightly when US trading begins later in the day.
Prices for both West Texas Intermediate and Brent oil benchmarks ticked up slightly. Gold was 0.1 per cent lower at $2,025.31 per troy ounce.
UK universities urged to be ‘flexible’ on admissions
Bethan Staton and George Parker in London
The UK government has urged universities to be “as flexible as possible” in admissions this year, as it acknowledged that the grades to be awarded, with exams having been cancelled because of coronavirus, might not be fair for all students.
In a letter to university vice-chancellors ahead of A-level results being released on Thursday, Michelle Donelan, universities minister, asked that places be held for students who are appealing against their grades after not meeting conditional offers.
“Where you are aware that a student’s grade may change as the result of an appeal, I would encourage you, where possible, to hold their place until they receive the result of that appeal,” she wrote.
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US reports smallest increases in cases and deaths in weeks
The US reported its smallest daily increases in new cases and deaths in weeks, with reporting delays keeping a lid on Monday’s figures.
A further 41,807 people tested positive for the disease over the past 24 hours, according to Covid Tracking Project data, from 51,319 on Sunday when the total number of confirmed coronavirus cases in the US topped 5m. It was the smallest daily increase in cases since July 6, according to Financial Times analysis.
Figures on Monday tend to be lower than other days of the week owing to weekend delays in reporting, but there were several other issues with state data that were being worked through today.
Of note, officials in Texas said a “large backlog” of laboratory reports in Nueces county meant new cases counts for the region around the city of Corpus Christi would not be posted today. The state reported 4,455 new infections, its smallest daily increase in about a fortnight.
California reported an increase in cases (7,751) that was higher than its average over the past week and also higher than other hotspot states in the sunbelt on Monday. The most populous US state on Friday fixed up a glitch with its data system and subsequently worked through a backlog of about 300,000 tests that were affected by the issue.
Florida (4,155) and Arizona (600) reported their smallest daily increases in new cases since June. Missouri (2,575) was the only state to report a record daily jump in cases, but was catching up for not reporting figures on Saturday and Sunday like a handful of other states that do not report data through the weekend.
A further 426 people in the US died, down from 616 on Sunday and the smallest daily increase since July 20.
Indonesian leader to watch Chinese vaccine trial
Joko Widodo, the Indonesian president, will on Tuesday witness the beginning of phase-three clinical trials of a vaccine candidate made by China’s Sinovac, official media reported.
Mr Widodo is scheduled to attend the trials at a hospital in Bandung, the Antara news agency quoted health minister Terawan Agus Putranto as saying.
He said the first 21 volunteers had undergone swab tests as a prerequisite for the injection of the China-made vaccine. About 1,600 Indonesian volunteers would be required for the full trial, the company has said.
Sinovac is working with Indonesia’s state-owned drugmaker Bio Farma on the trial, which is expected to take about six months.
Honesti Basyir, Bio Farma director, said he hoped the vaccine would be available in the first quarter of 2021.
Texas reports smaller rises in cases and deaths after ‘backlog’
Peter Wells in New York
Texas reported its smallest increases in new coronavirus cases and new deaths in weeks after revealing a “large backlog” of laboratory reports in Corpus Christi would not be included in Monday’s data.
The state’s health department said on the web site for its Covid-19 dashboard that new case counts for Nueces county would not be posted today and instead added to Tuesday’s numbers.
“The Nueces County – Corpus Christi Public Health District received a large backlog of positive lab reports that they are working through to ensure that no duplicate or probable cases are reported in their confirmed case counts,” officials said.
That led Texas to report that a further 4,455 people tested positive for Covid-19 over the past 24 hours, down from 4,879 on Sunday. It is the smallest daily increase since July 27, excluding a scheduled update to the state’s online coronavirus dashboard on July 2 that led to no data being reported that day.
Fatalities rose by 31, down from 116 on Sunday. This was the smallest daily increase since July 6, excluding that same July 2 update.
New York City to ban parents from preschool classrooms
New York City kindergartners and their parents will have to deal with separation anxiety on their first day of preschool, as families will be banned from classrooms under coronavirus restrictions.
“We have to be very careful about parents coming into school buildings,” mayor Bill de Blasio said at a briefing on Monday. “That’s not going to be something we allow under the vast majority of situations, just because of the health issues we’re dealing with.”
He said parents might be disappointed but the vast majority of preschoolers would be unbothered by the rule.
“I think what we learn as parents is that our youngest kids are incredibly adaptable,” Mr de Blasio said. “They yearn for that social experience. They love to be with their teachers and their friends.”
UK abandons centralised contact tracing in England
Laura Hughes and Anna Gross in London and Andy Bounds in Huddersfield
England’s army of contact tracers will be assigned to local authorities this month as the government abandons its more centralised approach to stemming the spread of coronavirus.
The move, which the government announced on Monday, comes amid concern the national “test and trace” strategy is still failing to reach large numbers of those who test positive for the virus.
From August 24 “ringfenced” teams of tracers will start to work with local councils following successful trials in Leicester, Luton and Blackburn with Darwen, the government said.
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Kodak shares plunge after $765m loan hits hurdle
Eric Platt, Richard Henderson and Andrew Edgecliffe-Johnson in New York
Shares in Eastman Kodak fell 30 per cent on Monday after the US federal government said it would not move ahead with a heavily scrutinised $765m loan until allegations of potential wrongdoing were cleared.
The loan, the first under the Defense Production Act since the start of the coronavirus pandemic, drew scrutiny from members of Congress because shares of the company rose in advance of its announcement.
Share purchases in June by Jim Continenza, executive chairman of Kodak, and Philippe Katz, a board member at the Rochester, New York-based company, also drew attention.
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Cuba reimposes curbs after new wave of infections
Cuban authorities on Monday reimposed measures aimed at containing the spread of Covid-19 after a second wave of infections emerged.
The 93 new cases announced on Monday beat the previous record of 74 set on May 1, leading authorities to reimplement a lockdown that had been gradually relaxed.
Most of the cases are in Havana, the capital, and the adjacent province of Artemisa.
The government said it would be restricting inter-provincial travel, closing beaches, bars, restaurants, and keeping the main airport closed to international flights.
Authorities blamed breaches of movement and gathering rules for the surge in new cases and renewed lockdown.
“Not one more day can be allowed to pass with the collective good being threatened by the actions of a few,” an editorial in the official Granma news agency said on Monday.
US struggles with pandemic as caseload tops 5m
Peter Wells in New York
Total coronavirus cases in the US topped 5m on Monday as the country worst hit by Covid-19 has struggled to get the pandemic under control.
Johns Hopkins University data showed that cumulative cases reached the milestone on Sunday, while the death toll was in excess of 162,000 people in America.
The volume of daily cases has been decreasing slowly across the country but remains elevated at about 50,000 and the daily death count from the virus has risen steadily to average more than 1,000 per day over the past week, according to calculations by the Financial Times.
California, Texas and Florida are the three states that have been recording the highest number of daily cases and deaths over the past month, although case numbers appear to be trending downwards.
California reported an above-average increase in new coronavirus cases on Monday in the wake of fixing a glitch in the state’s data system. A further 7,751 people tested positive for Covid-19 over the past 24 hours, the state’s health department said, down from 8,373 on Sunday and higher than the 6,716 cases a day California has averaged over the past week.
The website for the state government’s Covid-19 dashboard noted that “recent issues found in the state’s electronic laboratory reporting system that contributed to delays have been corrected” and today’s data include some cases from previous days.
A California activist group, Age-Friendly Marin Network, has begun hanging face masks in Ziploc bags from trees to encourage their use.
Texas reported its smallest increases in new coronavirus cases and new deaths in weeks after revealing a “large backlog” of laboratory reports in Corpus Christi would not be included in Monday’s data.
That led Texas to report that a further 4,455 people tested positive for Covid-19 over the past 24 hours, down from 4,879 on Sunday. It is the smallest daily reported increase since July 27.
Florida reported its smallest number of new coronavirus infections since the state reversed its reopening about seven weeks ago. A further 4,155 people tested positive for the disease over the past 24 hours, down from 6,229 on Sunday. It was the smallest daily increase in cases since June 23, just three days before governor Ron DeSantis ordered bars across the state to close.
Arizona on Monday reported its smallest daily increase in new Covid-19 cases since early June and its smallest daily rise in deaths in a month. A further 600 people tested positive for coronavirus over the past 24 hours,state data revealed on Monday, down from 816 yesterday.
Survey shows rising dissatisfaction over Covid-19 responses
Consumers are becoming less supportive of governments relaxing restrictions with a new poll indicating a sharp drop in acceptance of measures from 32 per cent in June to 21 per cent in August.
The percentage of respondents expressing disapproval of the UK government’s approach in tackling the pandemic has risen from 25 per cent in May to 43 per cent now, research by Kantar shows.
Disapproval is highest in the countries currently with the highest numbers of cases of coronavirus such as the US, where disapproval in the government’s approach has risen from 36 per cent in May to 48 per cent in July.
Globally, just 36 per cent are willing to return to travelling on public transport, compared with 41 per cent in July.
An increasing number of people approve of delaying visits to hairdressers, restaurants and bars, religious sites, gyms, cinemas and large events for at least one more month.
Kantar said it interviewed more than 100,000 adult consumers in Australia, Brazil, China, France, Germany, Indonesia, Italy, Kenya, Netherlands, Nigeria, Philippines, Poland, South Africa, Spain, Thailand, UK, US and Vietnam from July 17-21.
US landlords see cracks in August rent payments
Joshua Chaffin in New York
Apartment rent payments in the US largely held up in August, although several property executives warned that weaknesses were emerging and that a failure to extend federal aid programmes could prove calamitous.
As of August 6, 79.3 per cent of US households made a full or partial rent payment, according to a survey conducted by the National Multifamily Housing Council, a residential developer trade group. That was down 1.9 percentage points from the same period a year earlier.
Many property executives and policymakers had looked with trepidation to August because the $600 in additional weekly unemployment benefits granted under the first coronavirus relief package, known as the Cares Act, expired at the end of July. A federal moratorium on evictions has also expired — as have similar measures at the city and state level.
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US stocks wavered to start a new week, as investors gauged the possibility of renewed stimulus talks in Washington. The S&P 500 notched its seventh consecutive daily rise, adding 0.3 per cent at the close. The tech-heavy Nasdaq Composite was down 0.4 per cent. The Dow Jones Industrial Average jumped 1.3 per cent, led by Boeing, Caterpillar and Dow.
German businesses expect restrictions on public life to continue for another eight and a half months on average, as the pace of the economic recovery from the pandemic has shown signs of slowing down. Companies in the leisure industry anticipate restrictions to last for the longest, a July survey by Ifo, a Munich-based think-tank showed.
French economic activity in July was running at 7 per cent below its pre-crisis level as a result of the coronavirus pandemic, a slight improvement on the 9 per cent fall-off in June, according to the latest report from the country’s central bank. In the second quarter as a whole, French gross domestic product fell 13.8 per cent, the Banque de France said.
A “sizable share” of US publicly listed groups faces a potential credit crunch, as a slump in cash flow brought on by the pandemic squeezes companies with elevated levels of debt, economists at the Federal Reserve Bank of New York warned. “The cash flow shock far outpaced the benefits of lower interest payments,” they said.
Antonio Banderas spent his 60th birthday on Monday in quarantine after testing positive for coronavirus. “I would like to add that I feel relatively good, just a little more tired than usual, and am confident that I will recover as soon as possible,” the Spanish actor, pictured, who was nominated for an Oscar for Pedro Almodóvar’s Pain and Glory, wrote on Twitter. Mr Banderas lives in Surrey, England.
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Occidental Petroleum, the largest onshore oil producer in the US, sank to a loss of $8.4bn in the second quarter as it booked substantial writedowns in the wake of the oil price crash. The group reported impairments totalling $6.6bn, compared with a profit of $635m in the second quarter of 2019.
Royal Caribbean reported a bigger loss than expected in the second quarter after the cruise operator suspended its sailings as a result of the coronavirus pandemic. Revenues fell to $175.6m, from $2.8bn in the same quarter a year ago. The company suspended cruises from March 13 and had no voyages in the second quarter.
Hotel chain Marriott has said that its full recovery from the coronavirus pandemic “will clearly take time” as the group was pushed to a wider than expected quarterly loss. Second-quarter revenue fell 72 per cent year on year to $1.46bn. Revenue per available room fell 84.4 per cent globally.
Barrick Gold’s second-quarter profit beat forecasts to more than double, in the wake of a record rally in the yellow metal’s price. The gold miner reported adjusted profit of $415m, or 23 cents a share, up from $154m a year earlier. Revenues rose 48 per cent from a year earlier to $3.06bn.