US stocks hover close to record as Treasuries remain steady
US stocks slipped yet stayed close to an all-time high while Treasuries steadied after a three-day selling bout as investors turned their attention to economic data and this week’s large sales of bonds.
The 10-year Treasury note yield trimmed an earlier decline to be little changed at 0.688 per cent. The tame performance for US debt comes after a significant sell-off in recent days. Yields have risen 12 basis points since the end of July, after tumbling in February, when coronavirus fears gripped financial markets.
Treasuries have come under pressure this week as investors shifted into equities, pushing the Wall Street benchmark S&P 500 index briefly above its all-time closing high on Wednesday. The US index opened Thursday’s session 0.2 per cent lower. The index, at 3372.43 points, is just shy of its intraday record of 3,393.52 struck in mid-February.
Equities in Europe remained under pressure on Thursday. The continent-wide Stoxx 600 accelerated its slide once New York opened to shed 0.7 per cent in early afternoon trading. Markets in Frankfurt, Paris and London tumbled, with the FTSE 100 in particular shedding 1.2 per cent.
US jobless claims fall below 1m for first time since pandemic hit
Matthew Rocco in New York
New applications for US unemployment benefits fell below 1m for the first time since the start of the pandemic, although the pace of claims eased for a second straight week as businesses slowly emerge from the coronavirus restrictions.
Initial jobless claims totalled 963,000 on a seasonally adjusted basis last week, compared with 1.19m a week earlier, according to the US Department of Labor. Economists had anticipated 1.1m new claims.
The federal Pandemic Unemployment Assistance programme, which extends aid to the self-employed or other individuals who would not qualify for regular unemployment compensation, had 488,622 new applicants on an unadjusted basis. That was down from 655,999.
The number of Americans actively collecting state jobless aid decreased to 15.5m from 16.1m for the week that ended August 1. Continuing claims equalled 10.6 per cent of the workforce, down from 11 per cent.
Employers have cautiously resumed hiring over the summer, although it has not been enough to make up for massive losses in the spring.
The US has gained more than 9m jobs in the past three months, representing about 43 per cent of the more than 21m jobs lost in March and April.
But unemployment remains historically high as the White House and Congress struggle to agree a new stimulus package to help the millions of Americans left out of work amid the pandemic.
Kate Spade parent sales fall less than expected on China recovery
US luxury group Tapestry said its quarterly revenues fell less than feared as sales in mainland China recovered and consumers flocked online during coronavirus lockdowns.
The company behind brands such as Coach and Kate Spade said its net sales more than halved to $715m in the company’s fiscal fourth quarter ending June 27, compared with $1.51bn in the same period a year ago. However, that exceeded analysts’ expectations for $663.4m.
Retailers were hit hard by the closure of non-essential businesses and lockdowns aimed at curbing the coronavirus pandemic, although those with strong ecommerce operations were better able to navigate the downturn. Tapestry’s digital sales climbed “triple digits versus prior year” but were not enough to stem a decline in overall sales. The company said sales in mainland China turned positive on a year-on-year basis.
The retailer, which said the current “backdrop remains volatile” sharply lowered its costs by reducing headcount and tightly controlling its expenses. It also reduced discounting helping it achieve a gross margin of 69.8 per cent, up from 66 per cent a year ago.
However, the company swung to a loss of $294m or $1.06 a share, compared with net income of $149m or 51 cents a share in the same period a year ago. Adjusting for one-time items the company recorded a loss of 25 cents a share, that was narrower than expectations for a loss of 57 cents.
Despite the better than expected results concerns remained about the top line “where each of its brands was struggling prior to the pandemic”, according to Paul Lejuez, an analyst at Citi, adding that “turnaround is likely to take a while to materialise”.
NHS England waiting list numbers reach record high
The number of patients waiting for treatment for more than 18 weeks with NHS England has hit the highest level on record at 1.85m, highlighting the large backlog caused by the coronavirus crisis.
The percentage of people waiting from GP referral to treatment for more than 18 weeks, a key marker enshrined in the constitution of the NHS, rose to 48 per cent at the end of June, its highest level since records began in 2007, NHS England reported.
Before the crisis began, it only took the health service that long to treat 15 per cent of patients and NHS England aims for the waiting time to be fewer than 18 weeks for under 8 per cent of those referred for treatment.
More than 50,000 patients have been waiting more than a year for treatment, which is the highest level since 2009 and a large rise from the average of about 1,500 patients before the pandemic hit Europe.
Coronavirus makes for a brutal quarter for smaller US companies
Mamta Badkar and Eric Platt
Small and medium-sized US companies suffered a complete wipeout in profits in the second quarter because of the Covid-19 crisis, in sharp contrast to large multinationals that emerged from the most intense phase of the pandemic in better shape.
As the earnings season draws to a close, companies within the Russell 2000 stock index — the small-cap benchmark — have reported an aggregate loss of $1.1bn, compared with profits of almost $18bn a year earlier, according to data provider FactSet. Meantime, the much bigger companies within the benchmark S&P 500 index have posted a 34 per cent aggregate drop in earnings, to $233bn.
Investors said the figures underline a divide between the small companies that have been squeezed by the Covid-induced recession and the bigger companies that “have the strength to ride out whatever is thrown at them,” said Margie Patel, a senior portfolio manager at Wells Fargo Asset Management.
“Small companies don’t have the resources,” she added. “They don’t have the deep financial pockets.”
Sign of hope for UK job market as online ads record biggest weekly jump
Online job adverts in the UK posted their largest weekly increase of the year in early August, as the labour market stumbled back to its feet after the coronavirus crisis effectively ground new hiring to a halt.
The total number of online job adverts increased by 9 percentage points in the week ending August 7 to 62 per cent of its 2019 average, said the Office for National Statistics, based on data from search engine Adzuna.
The uptick marks a departure from the recent flatlining trend, in which online job adverts have remained close to half their average of the previous year since mid-June.
The category of transport, logistics and warehousing recorded the largest increase, adding to its gains for the fifth consecutive week to be significantly above last year’s average, the ONS said. The sharp rise is likely to have been driven by the boom in ecommerce under the nationwide lockdown.
Hindu priest tests positive for Covid-19 after close contact with Modi
Amy Kazmin in New Delhi
A Hindu holy man who shared a platform with Indian Prime Minister Narendra Modi at a grand opening ceremony for a temple to Lord Ram last week has tested positive for coronavirus.
The 82-year-old high-ranking priest Nritya Gopal Das is the head of the Ram Temple Trust established to oversee the construction of a grand new temple on the site of a razed 16th century mosque in the town of Ayodhya in north-east India.
Mr Modi presided over the ceremonies, fulfilling the role traditionally performed by Hindu kings in consecrating the ground for the new structure.
Images from the grand event — which were broadcast live on state television — showed the priest at close quarters with Mr Modi over the course of the festive proceedings, leaning on the premier’s shoulder and shaking hands.
Uttar Pradesh’s chief minister, Yogi Adityanath, and the head of the influential Rashtriya Swayansevak Sangh were also on the dais with the priest.
The religious rites at Ayodhya held on August 5 were a triumphant occasion for Mr Modi, and his Hindu nationalist supporters, who had long pushed for the construction of a temple on the site where a Hindu mob had razed the mosque in 1992. In a speech on the day, Mr Modi likened the agitation for the temple construction to the struggle against British colonial rule.
However, critics had questioned the wisdom of holding the gathering in the midst of a pandemic that has already claimed the lives of more than 47,000 Indians, and infected at least 2.4m.
Among those infected so far have been three ministers from Mr Modi’s government, including the premier’s closest political ally, Amit Shah, the home minister and the chief ministers of two BJP-ruled states.
In a statement on Thursday, the Uttar Pradesh government said Mr Adityanath had appealed to Medanta, a privately-owned five-star hospital, to provide medical care for the ailing Hindu ascetic.
Carlsberg warns of profit fall and suspends share buyback
Carlsberg has become the first large brewer to reinstate financial guidance after the start of the coronavirus pandemic but disappointed investors by pointing to a weaker second half of the year and suspending its share buyback programme.
The world’s third-largest brewer said underlying operating profits would drop 10 per cent to 15 per cent in 2020, after an 8.9 per cent fall in the first half.
Analysts said that implied a drop of about 17 per cent in underlying operating profits during the second half, far worse than expectations, as the Danish brewer warned of renewed lockdowns in its biggest market of China in the third quarter and increased spending on marketing.
Carlsberg also said it would suspend the second half of its share buyback programme due to the uncertainty over Covid-19 and possible acquisitions after repurchasing DKr2.5bn ($397m) in stock up until last week.
Shares in the group fell 5.5 per cent to DKr888 on Thursday morning.
Read the full story here
Imperial study estimates 6% of England had Covid-19 by July
Anna Gross in London
About 6 per cent of people in England had Covid-19 by the end of June, equating to roughly 3.4m, a study by Imperial College London found.
London was found to have the highest rate of infection in the UK, at 13 per cent, while the South West had the lowest, at 3 per cent.
The findings were part of the REACT study, commissioned by the Department of Health and Social Care, which looked at antibody test results from 109,076 participants.
The population-wide prevalence of past infection was roughly in line with data previously published by the Office for National Statistics, which showed that 6.78 per cent of people in England had received positive antibody tests.
The latest iteration of the study, published on Thursday, revealed that key workers in care homes and healthcare were the most likely groups to have been infected with Covid-19. Black, Asian and minority ethnic people were two to three times as likely to have had the virus than white people, the study showed.
One-third of antibody positive participants reported having had no symptoms, the study said.
IEA warns rise in Covid-19 cases will weigh on demand for oil
David Sheppard in London
The International Energy Agency has revised down its forecasts for oil consumption this year and next as a recovery in global demand slows.
The first downgrade in several months reflects “the stalling of mobility as the number of Covid-19 cases remains high, and weakness in the aviation sector”, the IEA said in its monthly report.
The Paris-based agency said global oil demand would average 91.9m barrels a day in 2020, down 8.1m b/d year on year and 140,000 b/d lower than last month’s forecast. The IEA’s 2021 demand forecast was lowered by 240,000 b/d to 97.1m b/d, a level still some 3m b/d below the pre-crisis peak.
GVC 2020 profit fall cushioned by surge in online gambling
GVC, owner of bookie Ladbrokes Coral, has forecast 2020 earnings above analysts’ estimates, as a rise in online gambling and the reopening of betting shops has helped to remedy the pandemic-related uncertainty.
Underlying earnings before interest, tax, depreciation and amortisation are expected to come in between £720m and £740m for the year assuming no further disruptions, only 3 to 5 per cent lower than the previous year and above analyst forecasts of £681m in a Bloomberg poll.
“The strong performance of the online business coupled with the return of the sporting calendar and the reopening of our retail operations means that the group is well placed for the balance of the year,” GVC said. It added that it had accelerated £20m of cost cutting from the acquisition of Ladbrokes Coral.
Online gambling revenues rose 20 per cent in the first half of the year, while revenues for betting shops in the UK were halved, with a similar fall seen in its European bricks-and-mortar outlets due to government-mandated closures.
GVC has faced further challenges in recent weeks after Kenny Alexander, its chief executive of 13 years, stepped down with little notice and UK tax authorities launched a probe into its former Turkish online gaming business.
GVC said it would not pay an interim dividend due to the risk of further lockdowns and restrictions to stop the spread of Covid-19 but it would consider paying them in future results.
Tui plans cost cuts as losses mount to more than €2bn
Alice Hancock in London
Tui, Europe’s largest tour operator, has reported a loss of more than €2bn so far this year and said it planned to cut its business costs by nearly a third after the pandemic forced it to bring its holiday itineraries to a standstill.
The Hanover-based travel group said on Thursday that occupancy at the hotels that it had reopened was about a fifth of normal levels as it posted a loss in earnings of €2.3bn in the nine months ending in June this year.
In the third quarter alone, it fell to a €1.5bn loss with revenues of €75m, down 98 per cent compared with the same period last year.
With its planes grounded and hotels shut, Tui was hit hard by the crisis and has only been able to make a slow recovery due to a faltering resumption of European travel as localised second outbreaks provoke governments to advise against holidays in certain areas.
On Wednesday, the company said that it had secured an extra €1.05bn loan from the German government, on top of a €1.8bn facility secured in April, leaving Tui with total cash and liquidity of €2.4bn to fund it through the typically quieter winter months.
The group added that it had launched a €300m annual cost-saving programme designed to cut costs across the business by 30 per cent by 2023.
Zurich operating profit drops 40% as Covid-19 takes its toll
Oliver Ralph in London
The impact of Covid-19 has wiped $686m off first-half profits at Zurich, the insurance group.
Operating profits fell 40 per cent in the first half of the year to $1.7bn, Zurich said on Tuesday. Insurance claims for Covid-related losses were mostly to blame.
The company expects to pay out a total of $750m in property and casualty insurance claims related to coronavirus, with that cost partly offset by lower losses in other areas of the business, such as motor insurance, because of the lockdown.
The payouts could rise if there is an unfavourable ruling in the UK High Court where regulators have taken on eight insurers, including Zurich, over the question of whether they should be paying out on business interruption claims. The ruling is expected next month.
Like other insurers, Zurich reported rising prices for commercial insurance, especially in the US. The company said that it was well positioned to benefit from higher prices.
French youth employment sinks to lowest level in at least 45 years
Victor Mallet in Paris
The coronavirus pandemic has pushed down youth employment in France to the lowest level since records began in 1975, the national statistics institute Insee said on Thursday as it released the latest official jobs numbers.
French unemployment according to the standard ILO measure fell in the second quarter to 2m people or 7.1 per cent of the workforce, which was 1.3 percentage points below the level of a year earlier.
But the lockdown between mid-March and mid-May skewed the figures – at one point official unemployment fell to 5 per cent – because those who count as unemployed must be seeking work, something that was almost impossible when people were forbidden to leave their homes except for essential purposes such as buying food.
Insee said the number of those who consider themselves jobless but are not counted as unemployed rose by 767,000 in the second quarter to 2.5m. The employment rate in the second quarter fell 1.6 points to 64.4 per cent, the lowest level since the start of 2017, and it declined for all categories of workers, male and female.
For the young – aged between 15 and 25 – the jobs crisis was particularly marked, with their employment rate falling 2.9 points to 26.6 per cent, the lowest level since Insee started measuring it in 1975.
Philippines’ Duterte volunteers for Russian vaccine trial
John Reed in Bangkok
The Philippines plans to begin offering Russia’s Covid-19 vaccine as soon as May 2021 and its President Rodrigo Duterte plans to be injected with it, his spokesman said on Thursday.
The Philippines would conduct clinical trials of the vaccine between October and March, and the president would be given it by May 1 at the earliest, said the spokesman, Harry Roque.
“It’s not a metaphorical statement,” Mr Roque said in an online briefing with journalists. “He is willing to undergo it.”
Russia this week became the first country to grant regulatory approval to a coronavirus vaccine, but some experts outside the country have voiced doubts as to its ability to develop and approve the vaccine safely.
Mr Duterte said on Monday that Russia had agreed to supply his country with its Covid-19 vaccine free of charge, and that he would “agree to be injected” as “the first to be experimented on”.
Amid a ramp-up of testing, the Philippines recently overtook Indonesia as the south-east Asian country with the highest number of coronavirus cases — 143,749 according to latest figures. The country has reported 2,404 deaths from the disease.
CanSino vaccine hopeful doubles in China stock debut
Christian Shepherd in Beijing and Hudson Lockett in Hong Kong
Shares in a pharmaceutical group that is developing a coronavirus vaccine alongside China’s military more than doubled on their trading debut, as investors brushed aside longstanding doubts over profitability.
CanSino Biologics’ stock surged as much as 120 per cent on its first day of trading on Shanghai’s Nasdaq-like Star Market on Thursday after the company raised Rmb5.2bn ($749m) in a secondary share offering. The shares later pared some of that initial enthusiasm to trade 90 per cent higher.
Appetite for Tianjin-based CanSino’s stock has been driven by its development of an experimental Covid-19 vaccine that seeks to stimulate an immune response to coronavirus using a chemically weakened common cold.
Read more here
South Korea reports one-month high in new cases
Edward White and Kang Buseong in Seoul
South Korea on Thursday reported a one-month high in new locally transmitted coronavirus cases amid concerns of potential clusters linked to a church near Seoul, a bustling street market and a fast-food outlet in the capital.
The country of 52m people recorded 47 new locally transmitted cases, the highest daily toll since 52 in early July, according to the Korea Centers for Disease Control.
The new cases took the total caseload to 14,770 with 305 deaths and 13,817 patients now cured.
South Korea won international praise for its handling of the global pandemic and has continued to deploy a high-tech contact tracing system as well as an efficient mass testing programme to monitor and suppress potential outbreaks.
The methods – which have allowed the country to avoid a nationwide lockdown throughout the pandemic – has put the economy on track to outperform all others in the OECD.
The economy is expected to contract 0.8 per cent this year compared with an OECD average of minus 7.5 per cent, according to the organisation’s latest forecast.
Jakarta authorities call for Shangri-La punishment
Authorities on Thursday called for the luxury Shangri-La Hotel Jakarta to be penalised after it allegedly violated social distancing restrictions introduced due to the pandemic.
City officials said the hotel was offering live music and alcohol sales, which are both banned under Covid-19 restrictions.
Agents from Parekraf, Jakarta’s tourism and creative industries agency, visited the hotel on August 8, the official Antara news agency reported on Thursday, after members of the public called to complain about violations of Jakarta’s Large Scale Social Restrictions, also known as PSBB.
“There are PSBB violations, such as live music and there is a display of alcoholic drinks, which means they are selling,” Parekraf director Bambang Asmadi told Antara.
He said the Shangri-La had not posted mandatory physical distancing signs at its restaurant indicating maximum occupancy at 50 per cent of capacity.
Mr Bambang said the city police would decide whether the hotel would be forced to close or a fine would be issued.
Jakarta has handed out fines totalling Rp902m ($61,000) to businesses violating PSBB rules since the pandemic began.
India reports record 67,000 new coronavirus cases
Amy Kazmin in New Delhi
India detected a record 67,000 new coronavirus infections over the past 24 hours — more than any other country in the world — as the pathogen continues to spread, facilitated by government moves to open up more public places.
The country’s confirmed coronavirus caseload has now reached 2.4m, the third-highest in the world, after the United States and Brazil. Of those infected, more than 47,138 have died, including 950 yesterday, giving India the fourth-highest death toll.
India is also dramatically scaled up testing, which has remained at one of the lowest levels per million inhabitants of any major nation.
The rapid spread of the virus continues to overshadow India’s efforts to revive the economy, while children — out of school since March — have little prospect of returning to the classroom any time soon.
Despite this, Prime Minister Narendra Modi’s government insists that India is faring far better than richer, more advanced countries, citing its relatively low death rate per million people as evidence.
Mr Modi is also touting its declining case fatality rate, which is being pushed down every day by the steady rise in newly detected infections, and the lag time between infections and death.
Yet even as it touts its success, Mr Modi’s ruling Bharatiya Janata party has been particularly hard hit by the virus.
Shripad Naik, the minister of state for defence and also minister for traditional Indian health systems, on Wednesday became the third member of Mr Modi’s government to test positive for the virus.
News of the latest infection within the party comes after home minister Amit Shah and petroleum minister Dharmendra Pradhan tested positive, while the chief ministers of two BJP-ruled states have also been hospitalised.
India’s 84-year-old former president, Pranab Mukherjee, a Congress party stalwart, is now in critical condition after being infected with the virus.
Lenders to baggage handler Swissport offer rescue
Daniel Thomas and Robert Smith in London
Lenders to Swissport, the world’s biggest baggage handling group, have offered a rescue package that would restructure its €2.1bn of net debt and could transfer ownership to them from struggling Chinese conglomerate HNA Group.
The owners of €1.4bn of senior secured bonds issued by Swissport have promised to invest in the business to help it survive the pandemic, which has hit its operations hard with the grounding of flights.
Swissport needs funding of between €450m and €570m over the next 14 to 18 months, according to Reorg Research.
Read more here
Global stocks climb on new hopes for US recovery
Hudson Lockett in Hong Kong
Global stocks rose after new signs that the US economy is recovering from the coronavirus pandemic helped propel Wall Street shares higher.
Japan’s Topix index gained 1.1 per cent in early trading on Thursday to hit a two-month high while South Korea’s Kospi climbed 0.7 per cent. China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks and Hong Kong’s Hang Seng both edged up 0.2 per cent.
Overnight in the US, the S&P 500 rallied 1.4 per cent and briefly climbed above its record closing high. The gains left the US benchmark up 50 per cent from its lows in March, when the emergence of Covid-19 pummeled global markets.
Gold continued its recent rollercoaster ride, climbing 1 per cent to $1,936.50 per troy ounce. The precious metal has rallied this year in the face of broad dollar weakness and last week touched a record high of more than $2,070 per troy ounce.
However, rising hopes of a new US stimulus package sparked a sell-off of the precious metal earlier this week.
Data on Wednesday showed core US consumer inflation rose more quickly than expected in July, another indication that parts of the world’s largest economy have begun to stabilise after the heavy blow caused by Covid-19.
“We expect most equity markets to rally further, so long as progress in limiting the economic impact of the virus continues,” said Oliver Allen, an economist at Capital Economics. “But we think that real yields are more likely to fall a little further from here than rise significantly.”
Renewed investor bullishness helped push 10-year US Treasury yields to 0.66 per cent on Wednesday, up from about 0.5 per cent last week. Yields slipped 0.03 percentage points to 0.647 per cent during Asian trading hours on Thursday. Bond prices rise as yields fall.
UK house price fall won’t help first-time buyers: think-tank
George Hammond in London
Big falls in house prices are likely across the UK over the next 12 months but first-time buyers will not find it easier to get on the property ladder because of tighter credit conditions and falling incomes, according to a leading think-tank.
With the UK’s economy falling into its deepest recession on record, and unemployment rising dramatically as the government’s furlough scheme for workers winds down, most analysts are forecasting that house prices will suffer.
According to the Resolution Foundation, if average prices collapse by more than 20 per cent — in line with the most pessimistic forecast by the fiscal watchdog, the Office for Budget Responsibility — first-time buyers will still have a harder time buying a property than before the coronavirus crisis.
Read more here
Shenzhen finds coronavirus in Brazil chicken imports
A shipment of frozen chicken wings from Brazil was found to test positive for coronavirus in the southern Chinese city of Shenzhen, in the latest example of traces of the virus being found on imported food products from South America.
The city’s health authorities said related products and people who had been in contact with the shipment were tested for the virus and all results came back negative.
The virus is known to be able to survive low temperatures and officials warned the public to be careful when buying imported frozen meat products.
Brazil, the world’s largest chicken exporter, recorded a 5.1 per year-on-year rise in exports to 1.365m tonnes in the first four months of 2020, according to ABPA, a trade body.
The report over Brazilian chicken comes after the outer packaging on batches of frozen shrimp imports from Ecuador had tested positive for the virus in July in Yunnan and Sichuan, Chinese state media reported.
Early speculation over the source of New Zealand’s first community coronavirus cases in more than 100 days this week first pointed to the cold storage facility where one of the infected people worked.
However, the country’s top health expert dismissed the suggestion, and said it was more likely that the infection was linked to New Zealand’s quarantine facilities, airport or ports.
Hong Kong Covid-19 patients evacuated after malfunction
A negative pressure room where four Covid-19 patients were being treated malfunctioned, forcing their evacuation, Hong Kong’s hospital authority said on Wednesday.
A voltage dip caused an interruption to the mechanical ventilation and air-conditioning system to wards at Prince of Wales Hospital, leading to a loss of pressurisation in some isolation rooms inside the intensive care unit.
The patients were moved to another ward while the pressure was restored within an hour. “The infection risk is assessed to be low,” the authority said in a statement.
Cisco chief executive decries US response to pandemic
Richard Waters in San Francisco
The failure to mount a more effective battle against Covid-19, particularly in the US, has dented the outlook for a key part of the information technology market, networking equipment company Cisco Systems has warned.
“I wouldn’t say that we’re coming out of the coronavirus right now,” Chuck Robbins, chief executive, said on Wednesday. “It feels to me very much how it felt 90 days ago.”
He added that he had expected the battle against the pandemic to be showing results by now, but that US lapses had left a cloud over his company’s prospects. “It sure feels like a coherent, nationwide testing programme would have been welcome,” he said.
Read more here
Singapore returns 800 migrant workers to quarantine
About 800 migrant labourers in Singapore were forced to re-enter quarantine late on Wednesday after health officials discovered a Covid-19 case among them in a dormitory that had been classified as cleared of the infection.
The city-state’s Covid-19 task force this week completed the testing of about 300,000 migrant workers — mostly from China — who live in dormitories.
“There are currently about 22,800 workers who are still serving out their quarantine period,” a health ministry statement said. “[This figure] includes about 800 migrant workers who were newly quarantined because we discovered a case amongst them in a cleared dormitory.”
The labour ministry said on Wednesday it would this month start to allow dormitory residents to visit recreation centres on their days off to buy groceries and remit their pay to their home countries.
New Zealand reports 13 new Covid-19 cases as cluster grows
New Zealand reported 13 new confirmed cases in the community after the discovery of the first locally transmitted infections in more than 100 days as its top health expert said he expects the cluster to grow.
All the new cases were linked to the four people who were found to be infected with coronavirus earlier this week.
“Given that all these cases are linked, we are treating them as a cluster, and what we know about clusters … is that they do continue to grow, so we fully expect there will be further cases,” said Ashley Bloomfield, director-general of health.
New Zealand was forced to reimpose lockdown restrictions on Auckland on Wednesday following the discovery of the first case of community transmission of the virus in three months.
One of the new cases is a pupil at a school, but Dr Bloomfield said the risk to the school community was low.
Three of the cases worked at Americold, a cold storage facility where one of the first four cases worked.
A case was also found in the workplace of one of the other members of the four early infections. Seven of the new cases were found in family members.
Three Americold sites have been closed and staff have been tested, said Dr Bloomfield, pictured.
He said the outbreak could have come from a managed quarantine facility, the airport or maritime ports, and said imports at the cold storage facility were “unlikely” to be the source of the virus.
The new cases and an imported case take the total number of active cases in the country to 36.
All positive cases will be handled at quarantine facilities to limit risk to the community, unlike during the first outbreak when people who tested positive were permitted to isolate at home.
The country had received praise for quickly imposing a strict lockdown in the early stages of its anti-virus measures in March. Swift action allowed New Zealand to reopen its economy more quickly than other countries.
Dr Bloomfield said genome sequencing was underway in a bid to discover the source of the outbreak and that early indications suggested it “most closely resembles the pattern from the UK and Australia”.
He said lockdown measures were not necessary in places visited by the confirmed cases.
China reports 19 new cases including 8 in Xinjiang
China reported 19 new coronavirus cases on Thursday, while another 62 emerged in Hong Kong on Wednesday.
All eight local cases in China were detected in the restive Xinjiang region, the National Health Commission reported on Thursday.
China reported 11 imported cases with four in Shandong, two each in Shanghai, Guangdong and Sichuan, and one in Hebei.
The country has had 79,398 cases in total with 4,634 deaths.
Hong Kong’s Centre for Health Protection said it was investigating 62 additional confirmed Covid-19 cases, taking the total number of cases identified in the territory to 4,244. There have been 56 deaths.
ADB to lend Philippines $400m for economic recovery
The Asian Development Bank will lend the Philippines $400m to raise productivity and competitiveness in the country’s agriculture sector as part of its Covid-19 pandemic economic recovery programme.
“The Philippines has made tremendous strides in reducing the national poverty rate, but rural poverty remains high because of low productivity and limited crop diversification,” said ADB vice-president Ahmed Saeed.
The loan will support farmers affected by the pandemic, help with transitions to higher-value crops and fund irrigation and groundwater investments, the bank said on Wednesday.
The loan will also be used to expand the government’s pre-school feeding programmes to families to reduce malnutrition and stunting.
Chicago to commission coronavirus-related art
Chicago plans to commission temporary public art on the theme of the Covid-19 pandemic this year, the city’s parks head announced on Wednesday.
Development will begin this summer, said Michael Kelly, general superintendent of the Chicago Park District.
Other themes would include inequality and racial reconciliation, he added, as part of an examination of the city’s publicly owned art.
“The Chicago Park District embraces the opportunity that the project will present to help examine public art and statues in our city’s parks,” he said.
Chicago plans to erect a series of new monuments that reflect the city’s diverse make-up, authorities have said.
“As we move forward together as a city, it is important to have open, honest and, at times, spirited debates about our history,” Mr Kelly added.
Victoria reports lowest daily case count in 2 weeks
The Australian state of Victoria reported 278 new cases of coronavirus over the past 24 hours, its lowest daily tally in two weeks.
The new cases reported on Thursday marked the lowest one-day count since July 29, well below the record of 725 cases recorded on August 5.
Daniel Andrews, the state’s premier, had reported 410 new cases on Wednesday.
Victoria’s health department said that eight more people had died from Covid-19.
Authorities in the state were forced to reimpose lockdown restrictions on metropolitan Melbourne in early July in a bid to contain an outbreak.
Coronavirus Business Update: UK economy shrinks by a fifth
“Hard times are here” was how UK chancellor Rishi Sunak greeted data showing Britain officially in its first recession — defined as two consecutive quarters of negative growth — since the global financial crisis.
The 20.4 per cent fall in output — the biggest UK quarterly fall ever and the largest in any of the world’s major developed economies — led to calls from business groups for “bold action”, especially as government job support schemes begin to wind down.
Read the FT’s Coronavirus Business Update here
Asia-Pacific stocks track Wall Street higher
Asia-Pacific equities climbed on Thursday after US stocks closed near a February record high on rosier economic data.
Japan’s Topix rose 0.8 per cent, the Kospi in Seoul gained 1 per cent and the S&P/ASX 200 nudged up 0.1 per cent.
Overnight on Wall Street, the S&P 500 closed 1.4 per cent higher, after the US consumer prices index came in higher than expected.
Futures tip the S&P 500 to open flat.
US reports biggest one-day rise in deaths in a fortnight
The US reported its biggest daily jump in coronavirus deaths in two weeks, spurred by large increases for hard-hit sunbelt states.
A further 1,485 people died, according to Covid Tracking Project data on Wednesday, up from 1,326 a day earlier. Over the past 24 hours, 55,742 people in the US tested positive for the disease, relatively on par with yesterday’s increase.
The daily jump in deaths was the biggest since July 29 and was led by a record 324 in Texas that took the state’s total number of fatalities to more than 9,000, now the fourth-highest tally among US states.
Florida (213), California (180), Arizona (148) and Georgia (105) also reported large increases.
North Carolina (45) was the only other state to report a record daily increase in fatalities. Separately, health officials there today announced a “major correction” to the state’s cumulative test count.
A discrepancy between electronic and manual reporting of test data that had been submitted by medical company LabCorp resulted in a higher total count of Covid-19 tests performed.
Many college students who returned to North Carolina State University, pictured, wore masks on the campus in Raleigh. © Reuters
“Although this reporting error impacts our count of total tests completed, it does not alter our key metrics or change our understanding of Covid-19 transmission in North Carolina, which shows stabilisation over the last few weeks,” Mandy Cohen, North Carolina’s secretary for the department of health and human services, said in a statement on Wednesday.
Data problems have cropped up elsewhere. California continues to add to its most recent case figures a backlog of positive tests that were held up by a glitch — which has since been fixed — with the state’s data system.
That resulted in California reporting 11,645 confirmed cases on Wednesday, but 6,212 of these were historical and a result of the backlog. The state reported a near-record increase of 12,500 on Tuesday, which also included some cases from the backlog.
Florida (8,109), Texas (6,200) and Georgia (3,565) also had large daily rises in coronavirus cases.
US moves to shut down fraudulent Vietnamese websites
US law enforcement is attempting to shut down 300 websites run from Vietnam that have been offering hand sanitiser and other personal protective equipment but not delivering to consumers who have paid for the goods.
The justice department said on Wednesday that it had obtained a temporary restraining order in federal court in Tampa.
“We will use every resource at the government’s disposal to pursue scammers who are stealing money from citizens amid the ongoing public health crisis,” said Ethan Davis, acting assistant attorney general.
US authorities say Thu Phan Dinh, Tran Khanh and Nguyen Duy Toan, all residents of Vietnam, are alleged to have engaged in a wire fraud scheme seeking to profit from the Covid-19 pandemic.
They operated more than 300 websites that fraudulently purported to sell products that became scarce during the pandemic, including hand sanitiser and disinfectant wipes, the complaint alleges.
“Thousands of victims in all 50 states attempted to purchase these items from defendants’ websites,” Mr Davis said. “Victims paid for items supposedly sold through the websites but never received the purchased products.”
Brutal quarter for smaller US companies
Mamta Badkar and Eric Platt in New York
Small and medium-sized US companies suffered a complete wipeout in profits in the second quarter because of the Covid-19 crisis, in sharp contrast to large multinationals that emerged from the most intense phase of the pandemic in better shape.
As the earnings season draws to a close, companies within the Russell 2000 stock index — the small-cap benchmark — have reported an aggregate loss of $1.1bn, compared to profits of almost $18bn a year earlier, according to data provider FactSet.
The S&P 500 — which dropped more than 30 per cent in the Covid-19 sell-off — is now 3.2 per cent above where it began the year. The Russell 2000, by contrast, is still 5.6 per cent lower year-to-date.
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California cases and Texas deaths surge on revisions
Peter Wells in New York
California reported a daily increase of more than 11,000 coronavirus cases for a second straight day as the state continues to process a backlog of infections caused by a data glitch.
The state’s caseload rose by 11,645, governor Gavin Newsom revealed at a press conference on Wednesday, down from 12,500 on Tuesday that was the second-biggest one-day jump on record.
Since the pandemic began, California has confirmed 586,056 coronavirus infections.
Mr Newsom explained, though,that the latest figures included 5,433 new Covid-19 cases over the past 24 hours and 6,212 infections that stemmed from a backlog of data.
Texas became the US state with the fourth-highest number of coronavirus deaths after fatalities in the state topped 9,000 on Wednesday.
A further 324 people died, Texas’s health department revealed this afternoon, up from 220 on Tuesday.
This would rank as the state’s biggest one-day increase in fatalities, excluding a one-time revision on July 27 that resulted in the statewide total being revised higher by a combined 675 new and historical deaths.
Since the pandemic began, Texas has now reported 9,034 fatalities, the fourth highest tally among US states and behind New York, New Jersey and California.
Florida has reported 8,898 deaths, meaning both it and Texas today overtook Massachusetts, which was among the north-eastern states hit hardest in the early days of the pandemic.
New York, an early hotspot for Covid-19 in the US, took much less time than California, Texas and Florida to reach its first 100,000 cases, but has taken increasingly more time to add each subsequent batch of 100,000 infections.
New York reported a further 700 cases of coronavirus on Wednesday, slightly more than its seven-day average.
If that pace held steady, it would take New York more than 110 days to top the 500,000-case mark, having already taken 33 days to go from 400,000 to its total today of 422,703, according to FT analysis of Covid Tracking Project data.
NYC mayor in new warning over city layoffs
New York could lay off up to 22,000 workers on October 1 if no federal or state aid is forthcoming, the city’s mayor warned on Wednesday.
Mayor Bill de Blasio said he has repeatedly pressed the US Congress to pass a stimulus and New York’s state government to give the city authority to borrow money. “When that wasn’t possible we put in the budget that there would be 22,000 layoffs,” he said.
The mayor, who first warned of possible retrenchments in June, said every city department would experience layoffs. The planned cutbacks would affect nearly 7 per cent of the city’s 325,000-strong workforce.
“But if we don’t have something else that stops it, we do plan 22,000 layoffs on October 1,” he said. “It’s a massive, painful number. It resembles the kind of things we had to do decades ago, but the job here is to try and avert it if we can.”
Covid-19 news you might have missed
Jens Spahn, the German health minister, has expressed scepticism about Russia’s Covid-19 vaccine, saying it had not been adequately tested. In an interview with Deutschlandfunk radio, Mr Spahn said: “It’s not about being first, it’s about having a tried, tested and safe vaccine.” He said for people to be able to trust such a vaccine, it was important to do all relevant tests and make them public before it was licensed.
US equities climbed towards an all-time high on Wednesday while global bond markets extended a recent sell-off as investors shifted into riskier assets. The S&P 500 reversed the previous session’s losses to gain 1 per cent. In Europe, UK equities outshone their peers. Ten-year US Treasury yields pulled back from their highest level in more than a month,to hit 0.67 per cent, reflecting the fall in prices.
Eurozone industrial production rose 9.1 per cent in June, as the region’s manufacturers ramped up their activity after the heavy blow from the coronavirus pandemic. However, the rise in the bloc’s industrial output in June was below the 10 per cent consensus forecasts of economists surveyed by Reuters, raising questions about the speed of the recovery in the region’s pandemic-stricken economy.
The UK government has overhauled the way coronavirus death data is compiled in England after scientists revealed Public Health England had been counting people as having died from the virus regardless of when they tested positive. The move meant the UK death toll is lower by 5,377 to 41,329 on Wednesday. Daily death figures would only include those that occurred within 28 days of a positive test.
US commercial stocks of crude oil dropped sharply again last week, as falling imports combined with rising consumption sparked a draw from storage far greater than the market expected. Total commercial stocks for the week ended August 7 amounted to 514m barrels, compared with 519m barrels the week before. They remain 17 per cent above the same level last year.
The US Treasury saw solid demand for its record auction of 10-year notes, providing further evidence of the government’s ability to borrow massive sums at historically low yields to fund giant spending packages to limit the economic impact of coronavirus. On Wednesday, the department sold $38bn of 10-year Treasuries at a yield of 0.677 per cent.
A player at FC Barcelona has tested positive for coronavirus, a day before squad members from the world’s richest football club head off to Lisbon for the final stages of the Champions League. The unidentified player, among nine due to begin pre-season training on Wednesday, is self-isolating after testing positive, the club said. “The player has not been in contact with any of the senior team players.”
US consumer price gains kept pace into a second month as demand showed signs of a rebound from the depths of the pandemic-fuelled slump. The US Bureau of Labor Statistics said the consumer price index jumped a seasonally adjusted 0.6 per cent in July against the previous month, higher than economists’ forecast for 0.3 per cent growth. In April, the CPI sank 0.8 per cent, the biggest drop since December 2008.
Postponed Venice Biennale celebrates its past
Jackie Wullschläger in London
No contemporary art event is more eagerly awaited, as the gold standard of cultural recovery and reconnection, than the delayed 59th Venice Biennale, now expected in April 2022. While we yearn, this most beloved, prestigious and socially seismic of international exhibitions has seized the moment for reflection to present a landmark, riveting show, The Disquieted Muses: When La Biennale Meets History, displayed in the Giardini and online.
Through the prism of reimagining scores of exhibitions — a vast array of films, photographs, documents recounting significant visual art presentations and contributions from the other Venice festivals of cinema, music, theatre, dance, architecture, brought together in this show for the first time — it offers no less than a socio-cultural history of the past century: original, seductive, resolutely affirmative in its conviction of art’s role on the world stage.
Read more here
Corporate news you might have missed …
Tui, Europe’s largest tour operator, has secured an extra €1.05bn loan from the German government to fund it through its low winter season after the near total shutdown in international travel wiped out its revenues earlier in the year. The loan, from the state-backed bank KfW, comes on top of an existing loan from the same bank for €1.8bn that Tui secured in April. It leaves Tui with total cash and liquidity of €2.4bn as it goes into winter.
Danish energy company Orsted said that low power prices in the UK had knocked its earnings during the second quarter, and warned that low power prices could persist due to the economic impact of coronavirus. The company, which is the world’s largest developer of offshore wind farms, left its full-year guidance unchanged for earnings before interest, tax, depreciation and amortisation.
Coronavirus has blown a £430m hole in the value of London’s Covent Garden, according to Capital & Counties, the estate’s owner. Covent Garden has shed 17 per cent of its value, from £2.6bn to £2.2bn, since the start of the year, with coronavirus having emptied out the tourist destination for much of that time. Capital & Counties, or Capco, said it had reopened the majority of the estate and was pedestrianising more streets to facilitate that.
Shares in Asos jumped after the ecommerce fashion retailer said that sales and profits were to come in “significantly ahead” of market expectations for the year, as customers shifted to online shopping during lockdown. The group expects revenue growth to be 17-19 per cent compared with the year before and profit before tax to come in the range of £130m- £150m, supported by “strong underlying demand” and fewer goods returned.
M&G suffered a 57 per cent fall in profits in the first half of the year after spooked investors pulled money from its retail funds during the coronavirus-related market sell-off. The asset manager and insurer reported adjusted pre-tax profit of £309m, well below the £714m posted for the same period last year, after heavy net client outflows from its savings and investment business caused its fee revenues to drop by nearly 9 per cent.
Profits at car insurer Admiral jumped by almost a third in the first half of the year as the number of road accidents fell sharply during the lockdown, pushing down insurance claims. The company passed some of the benefit of lower claims on to customers in the form of a £25 per vehicle premium rebate. Admiral was the only UK insurer to offer an automatic rebate to all customers. Pre-tax profits for the first half jumped 30 per cent to £287m.
Cathay Pacific reported record losses in the first half of the year, with more than three-quarters of its passenger traffic disappearing compared with 2019 because of lockdowns and travel restrictions. The Hong Kong airline made a loss of HK$9.9bn ($1.3bn) in the six months to the end of June, confirming figures released as part of a profit warning in mid-July. That compares with a profit of HK$1.3bn over the same period last year.
The UK’s £1bn potato-growing sector has been hit so hard by extreme weather and coronavirus that its largest customer is stepping in with £25m of support to secure its supply chain. Canadian company McCain, which makes frozen chips and other potato products for UK retailers, restaurants and chip shops, will invest £10m this year and another £15m over the next four years to help growers overcome hits to supply and demand.