Bernanke calls on Congress to help to state and local governments
Ben Bernanke, who steered the US Federal Reserve through the financial crisis, has called on Congress to “act decisively” to avoid repeating the mistakes of past crises.
In an opinion piece for the New York Times, Mr Bernanke said that local and state government need help to continue to provide essential services and millions of jobs.
He said that policymakers committed a key error following the 2008-2009 crisis by forcing through state and local budget cuts, which coupled with federal austerity “meaningfully slowed the recovery”.
“We have been here before,” Mr Bernanke wrote, pointing to the stimulus package of nearly $800bn agreed during the financial crisis.
But that package was partly offset by cuts in spending and employment by state and local governments. Like today, with sharp declines in tax revenue as the economy slowed, states and localities were constrained by balanced-budget requirements to make matching cuts in employment and spending. This fiscal headwind contributed to the high unemployment of the Great Recession, which peaked at 10 percent in late 2009.
UnitedHealth earnings boosted as elective payouts drop
UnitedHealth reported a surge in quarterly profits as delayed elective procedures during the coronavirus crisis lowered costs for America’s largest health insurer.
The Minnesota-based company’s profits more than doubled to $6.64bn or $6.91 a share in the second quarter, up from $3.3bn or $3.60 a share in the year ago quarter. Adjusting for one-time items its earnings of $7.12 a share eclipsed analyst expectations for $5.28.
That came as UnitedHealth’s medical care ratio, the portion of premiums collected by insurers that get paid out to medical providers, fell to 70.2 per cent. That compared with consensus for 78.4 per cent and was down from 83.1 per cent in the year ago quarter.
Hospitals began postponing non-essential surgeries as the pandemic picked up in mid-March as they prepared to cope with thousands of coronavirus cases. UnitedHealth said its earnings “were substantially higher than anticipated due primarily to the unprecedented, temporary deferral of care in the company’s risk-based businesses”. However, it cautioned that this would be offset in the coming quarters as these deferred procedures resume and by future “Covid-19 cost and economic impacts”.
The company reported a 2.5 per cent year-on-year increase in second quarter net revenues to $62.1bn, shy of analysts’ expectations for $63.5bn, according to a Refinitiv survey.
UnitedHealth shares, which are up 5 per cent so far this year, were little changed in pre-market trade.
UK government commits to future inquiry into handling of pandemic
Jim Pickard, chief political correspondent
Boris Johnson has committed the UK government for the first time to an independent inquiry into the handling of the coronavirus pandemic – in a move that heralds intense scrutiny of the decisions made before and during the crisis by ministers and officials.
That pledge goes much further than previous ministerial comments on an inquiry, which have been more vague. By promising an “independent” inquiry Mr Johnson cannot limit the scope of the investigation into an internal, private review.
Speaking in the House of Commons on Wednesday, the prime minister said it would not be right to hold an inquiry immediately.
I do not believe that now in the middle of combating, as we still are, a pandemic is the right moment to devote huge amounts of official time to an inquiry.
But he continued: “Of course we will seek to learn the lessons of this pandemic in the future, and certainly we will have an independent inquiry into what happened.”
Issues that an inquiry is likely to explore will be the UK government’s readiness for the pandemic, its provision of personal protective equipment and the timing of the lockdown – several days after many other comparable European countries.
Earlier on Wednesday the government categorically ruled out the mandatory use of face masks in offices despite new rules that will make them compulsory in shops from July 24.
Goldman Sachs profits bolstered by bond trading boom
Laura Noonan in New York
Goldman Sachs defied the coronavirus crisis to earn as much in the second quarter of 2020 as it did a year earlier after a boom in bond trading offset a surge in loan loss provisions and legal charges.
The Wall Street bank, which has been criticised for its continued commitment to fixed income trading since the financial crisis, reported net income of $2.42bn for the year, unchanged from a year earlier.
Earnings per share for the most recent period were $6.26, far better than the $3.78 expected by analysts, as the bank benefited from a 150 per cent surge in fixed income trading revenues in the second quarter. The same bonanza allowed JPMorgan Chase to almost double its fixed income revenues in the second quarter and drove a 68 per cent rise at Citigroup.
“The turbulence we have seen in recent months only reinforces our commitment to the strategy we outlined earlier this year to investors,” said David Solomon, chief executive. In January, Mr Solomon detailed a plan to broaden Goldman’s business into new areas such as cash management while maintaining its big trading operation.
“While the economic outlook remains uncertain, I am confident that we will continue to be the firm of choice for clients around the world who are looking to reshape their businesses and rebuild a more resilient economy.”
The fixed income performance was that division’s best quarterly haul in nine years, delivering revenues of $4.24bn compared with $1.7bn the year before. Goldman said the performance reflected “continued strong client activity in intermediation and financing”.
Guardian to cut jobs as pandemic takes heavy toll on news industry
Alex Barker in London
The Guardian Media Group is planning to cut 180 jobs, including 70 from its newsroom, as the free-to-read publisher tries to ride out the slump in its revenues after the pandemic.
With its revenues hit by more than 10 per cent, the Guardian’s editor Katharine Viner and chief executive Annette Thomas described the pandemic as leaving the publisher’s finances in an “unsustainable” position that required “decisive action”.
The proposal will mainly seek to reduce staff numbers across the Guardian’s commercial operations. But it will also include around 70 job cuts across the editorial department, a step news publishers have sought to avoid. The Guardian group employs around 1,500 people in total.
Falling advertising revenues and circulation has already prompted far reaching cost-cuts across news media groups based in the UK, including salary reductions for senior staff. A second wave of cuts is now hitting staff numbers. Reach, the publisher of titles including The Daily Mirror and The Daily Express, last week unveiled plans to cut 550 jobs.
Iran dealing with ‘intense pressure’ of resurgence in Covid-19
Najmeh Bozorgmehr in Tehran
Iran’s president Hassan Rouhani said that “the second wave” of coronavirus infections since last month has proven “more intense” than the first wave.
“Unfortunately, people thought we had completely left behind coronavirus,” Mr Rouhani said in a cabinet meeting on Wednesday. “It is about one month that we are dealing with intense pressure of coronavirus.” He added that he hopes the country will manage the renewed outbreak over the next month as it did during the first surge in infections.
Over the past 24 hours to noon on Wednesday, 199 more deaths were reported, pushing total fatalities up to 13,410. It comes after Iran’s Covid-19 death toll had gone down to around 40 a day in May.
Iran’s health ministry said that 25 out of 31 provinces are currently in an alarming situation. Tehran is in a worse situation with authorities putting some restrictions back in place until at least next week.
Alireza Zali, the doctor leading the capital city’s Covid-19 response, said on Wednesday that Tehran faced “the most complicated situation” compared with other provinces and “not to lose time” in imposing urgent measures.
He said 890 patients were hospitalised in Tehran over the past day alone which equalled the total number of coronavirus patients hospitalised in some of the worst-hit provinces.
UK Covid-19 round-up: no masks in offices, council tightens measures
Matt Hancock ruled out recommending face masks in offices, after the government made a U-turn on requiring masks to be worn in all shops in England.
The health secretary said it would not become mandatory for office workers to cover up their nose and mouth, despite reports suggesting that the UK government was preparing to announce the measure.
Epidemiologists say that evidence suggests masks help prevent the spread of Covid-19 and mitigate the virus load received when close to an infected person.
David Lloyd, a doctor operating in north west London, said on Sky News that “if you’ve got poor air circulation, you should be wearing a mask”.
The rejection of the move came as a borough in northwest England put five measures in place including wearing masks in all public places to stem a rise in coronavirus cases and avoid a strict local lockdown.
Blackburn with Darwen also decided to limit outside visitors to households to two people, ramp up testing, inspect and advise on social distancing in corner shops and replace handshakes and hugs with elbow bumps as greetings.
Dominic Harrison, director of public health for Blackburn with Darwen council, said on BBC Radio 4 that:
We have what we call a rising tide event rather than an outbreak. By that we mean that we have a number of cases rising in specific areas across a significant community but not a single big outbreak.
The area had 114 cases in the past two weeks, of which 85 per cent were south Asian people, who often live in terraced households with more than 4 people. The rise in its rate of confirmed cases to 47 per 100,000, up from 31.6 in the week to July 4, triggered the local response, Prof Harrison said.
If case numbers do not begin to lower within two weeks, then local authorities will reimpose the lockdown measures one by one but it will try to avoid a return of a strict local lockdown as seen in Leicester.
Vaccine hopes lift global markets
Global stocks rallied as encouraging results for an experimental Covid-19 vaccine and hopes of further stimulus for pandemic-hit economies outweighed escalating US-China tensions over Hong Kong.
The announcement from US biotech group Moderna that its vaccine had produced an immune response in a small, early stage trial lifted markets.
European equities continued the rally on Wall Street and much of Asia with the continent-wide Stoxx 600 and the UK benchmark FTSE 100 both rising about 0.8 per cent.
Jim Reid, analyst at Deutsche Bank, said the Moderna announcement had raised “hopes that the vaccine may be within sight”, despite noting the significant side effects experienced by some patients in the study.
Chinese stocks proved an exception to the upbeat trading picture. Mainland and Hong Kong markets slipped after President Donald Trump signed legislation rescinding the city’s special trade privileges with the US and clearing the way for sanctions on Chinese officials.
S&P 500 stock futures were 0.7 per cent higher on Wednesday ahead of another day of second-quarter earnings announcements. Investors appeared to have largely priced in the grim picture for corporate profits, which are expected to fall by the most since 2008. The Wall Street benchmark ended Tuesday 1.3 per cent higher after several Federal Reserve officials signalled that more economic support may be forthcoming.
Merck warns over unrealistic expectations for a vaccine
Investors have welcomed any sign of a possible Covid-19 vaccine, with even incremental developments tending to boost equity markets.
The latest news surrounds US biotech Moderna’s potential vaccine, which produced immune responses in patients in its early stage trial, according to results in a peer-reviewed journal.
But traders and fund managers have paid less attention to a stark warning over unrealistic expectations from within the pharma industry itself this week.
Merck chief executive Ken Frazier said:
I think when people tell the public that there’s going to be a vaccine by the end of 2020, they do a grave disservice to the public.
The US company describes itself as the leading vaccine producer in the world, and Mr Frazier added: “My view is unless all of us are safe, none of us are safe.”
What worries me the most is that the public is so hungry, so desperate to go back to normalcy, that they are pushing us to move things faster and faster. But ultimately, if you’re going to use a vaccine in billions of people, you better know what that vaccine does.
It is not the first time he has spoken out. In May Mr Frazier told the FT that a 12 to 18-month timeframe to develop an effective coronavirus vaccine was “very aggressive”.
UK corporate news round-up: Asos, Burberry, Dixons Carphone
Online fashion retailer Asos predicts pre-tax profit will hit the top end of market expectations for the year, even with extra costs due to the pandemic, as shoppers scooped up comfortable at-home leisurewear. Group sales increased 10 per cent to £1bn in the four months to the end of June compared with the same period last year. Customers bought more activewear, casualwear and beauty products as they stayed at home instead of formalwear and outdoor clothing.
Luxury fashion group Burberry sees no immediate end to disruption to its business from coronavirus, as the pandemic crimps activity in its stores and tourism remains muted.
Dixons Carphone reported a fall in adjusted pre-tax profit to £166m, from £339m a year earlier, as the electrical and telecoms company’s mobile business experienced a 20 per cent drop in sales with retail stores closing due to the pandemic.
Storage company Big Yellow Group has benefited from increased interest among individuals and businesses since mid-May when the lockdown was eased, although overall activity remained 15 per cent lower in June compared with the year before.
Dunelm Group, the furniture retailer, said that it is taking a “cautious” view on the short to medium-term outlook, as it reported sales declined by more than a quarter in the three months to June relative to the same period a year earlier.
European markets set to open higher after vaccine trial result
European stock futures pointed to a buoyant start to trading, with the continent’s markets set to follow most Asian bourses higher.
Futures for the continent-wide Stoxx 600 composite were up 1.2 per cent, while the UK benchmark FTSE 100 futures rose 1 per cent. London trading was largely unmoved by a slightly better than expected reading of a 0.6 per cent rise in UK consumer prices.
The positive mood took hold across Asia following encouraging results from an early Covid-19 vaccine trial by US biotech company Moderna. China’s markets were an exception to the upbeat day after President Donald Trump signed legislation rescinding Hong Kong’s special trade privileges with the US and clearing the way for sanctions on Chinese officials.
S&P 500 futures also edged 0.8 per cent higher. The Wall Street benchmark ended Tuesday trading up 1.3 per cent on hopes of further stimulus from the Federal Reserve, despite another record day for Covid-19 cases and grim start to the second quarter earnings season.
Burberry warns of lingering Covid-19 impact as sales tumble
British luxury fashion group Burberry has said it sees no immediate end to disruption to its business from coronavirus, as the pandemic crimps activity in its stores and tourism remains muted.
In a trading update, Burberry said:
In retail, tourist flows are likely to remain negligible, and store operations are continuing to face significant headwinds, with some remaining closed and operating with reduced trading hours.
The group forecast that retail sales in the quarter to September would be as much as 20 per cent lower than the same time last year. In its wholesale business, revenues in the first half of the year were running around 50 per cent lower than a year ago.
In the 13 weeks to June 27, Burberry’s same-store retail revenues fell 45 per cent on the equivalent period in 2019.
Burberry, whose business model relies on wealthy tourists visiting its European stores, said that lockdown measures in Europe meant sales fell 75 per cent on a year ago in the quarter.
Revenues in the US fell by 70 per cent, although Burberry said trading was now improving after some lockdown measures eased.
Chief executive Marco Gobetti said that, despite such declines, consumer response to Burberry’s latest collections had been “excellent”, particularly with new, younger customers.
UK inflation rate inches up in June from four-year low
Rising prices for games and clothing meant UK consumer price inflation rose slightly in June after falling to its lowest level in four years, as the economy begins to reopen after months of coronavirus lockdown.
Consumer price inflation rose to 0.6 per cent year-on-year in June, data from the Office for National Statistics released on Wednesday showed, a slight increase from 0.5 per cent in May. Economists polled by Bloomberg had forecast a dip to 0.4 per cent.
Rising prices for clothes and footwear and in recreational and culture activities such as computer games drove up the rate of inflation, but it was offset by falling costs of food, hotels and restaurants.
The nationwide shutdown imposed to prevent the spread of coronavirus has sent inflation plummeting, from 1.5 per cent in March to 0.8 per cent in April. The Bank of England’s target is 2 per cent.
With wage growth forecast to remain low in a slowly reopening economy, and many businesses dropping prices to attract customers, economists have forecast that inflation is likely to fall further and some have predicted a near-zero rate in the coming months.
Gross domestic product rose 1.8 per cent in May month-on-month, but the UK economy was still 24.5 per cent smaller than in February, figures released on Tuesday show. Economists had forecast a significantly sharper rebound in GDP in May.
Infected US hairdresser case suggests mask wearing works
Two hairstylists who continued working for days after they caught coronavirus did not appear to pass it on to any of their clients, suggesting that the masks they and their customers wore were effective in stopping the spread of the disease, according to a new study published on Tuesday.
The report from the US Centers for Disease Control and Prevention, said that the first hairdresser developed respiratory symptoms on May 12 and continued to see clients for eight days until testing positive for the virus.
The second stylist developed symptoms on May 15 and stopped working the day the first stylist tested positive. A test later confirmed the second stylist, who had had unmasked time with the second one during breaks between clients, was also infected.
By the time they stopped working, they had seen 139 clients between them and had worked with other hairdressers in the salon.
However, after two weeks of self-quarantine, none of the clients reported either symptoms or positive tests, suggesting that the salon’s requirement that all hairdressers and their clients wear facemasks was effective.
While working, the first stylist wore a double-layered cloth face mask and the second alternated between wearing either a similar cloth face mask or a surgical face mask.
Health authorities were able to interview 104 clients of whom 98 per cent said they had worn a face covering for the entire appointment, while two people said they wore face coverings only part of the time.
Six close contacts of the hairdressers from outside work were also identified. The four who were close contacts of the first hairdresser all developed symptoms and tested positive, while none of the two close contacts of the second developed any symptoms.
The CDC notes that asymptomatic cases might have been missed because only half of the clients agreed to be tested and the tests were offered five days after exposure, which might have meant that some clients could have been presymptomatic. However, none reported suffering any symptoms in the follow up interviews.
Tokyo raises coronavirus alert level as new cases climb
Robin Harding in Tokyo
The city of Tokyo has raised its coronavirus alert level to the top of a four-point scale as an expert group warned that the virus was spreading in the metropolis.
New cases in the Japanese capital have been above 100 for six days in a row and the positive rate in tests has crept up to 6.2 per cent.
The city’s experts had previously drawn attention to intensive testing on clusters of the disease in nightlife areas, making the rise in case numbers hard to interpret, but they said there were now more cases in different locations and age ranges.
Tokyo governor Yuriko Koike has urged customers to avoid clubs and bars without proper social distancing measures, but so far the government has stuck to its programme for reopening the economy, promoting a new “Go to” campaign to encourage domestic travel with subsidies.
South Korea’s unemployment rate edges lower
Song Jung-a in Seoul
South Korea’s unemployment rate fell slightly in June on the back of the government’s job creation efforts but remained near a decade high as the coronavirus pandemic pummels the country’s job market.
The seasonally-adjusted unemployment rate fell to 4.3 per cent in June from a decade-high of 4.5 per cent in May, according to data from Statistics Korea. The economy, Asia’s fourth-largest, shed 352,000 jobs last month with the retail, lodging and restaurant sector hit hardest.
The government has announced a series of stimulus packages totalling Won277tn ($230.6bn) to battle economic headwinds. On top of that, it announced a $130bn spending plan on Tuesday to create 1.9m jobs by 2025, mostly in the digital technology and green energy sectors.
The country is struggling to contain sporadic outbreaks of the coronavirus amid a rising number of imported cases. The country reported 39 new cases on Wednesday, including 11 local infections, bringing the total caseload to 13,551, according to the Korea Centers for Disease Control and Prevention.
Bank of Japan revises down GDP forecast, holds rates
Robin Harding in Tokyo
The Bank of Japan has kept monetary policy on hold even as it revised down its growth forecasts and warned that risks to economic activity and prices are skewed to the downside.
Growth in the year to March 2021 is now expected to come in at minus 4.7 per cent while prices will fall 0.5 per cent, according to estimates by the BoJ’s nine-member policy board, before a rapid rebound in 2021 and 2022.
The BoJ’s decision to stand fast despite the weak economic outlook suggests it believes it has done all it can for now and is taking comfort from the stability of the yen against the US dollar.
“Japan’s economy has been in an extremely severe situation with the impact of Covid-19 remaining at home and abroad, although economic activity has resumed gradually,” said the central bank
Central Asian countries fear economic hit as virus cases surge
Max Seddon in Moscow
Central Asian countries that had boasted of their early success fighting the pandemic have reintroduced lockdowns in response to a new surge in coronavirus cases that threatens their economies.
Kazakhstan, the region’s wealthiest nation where gross domestic product per capita has risen sixfold since 2002, according to the World Bank, was one of the first countries worldwide to relax quarantine restrictions in mid-May, when it had 5,100 confirmed cases.
Since then, that number has soared to more than 61,755, forcing President Kassym-Jomart Tokayev to extend a new lockdown until early August on Tuesday.
Neighbouring Uzbekistan, central Asia’s most populous country, also imposed a new lockdown last week after cases topped 10,000, more than double the number a month earlier.
Kyrgyzstan’s capital Bishkek and several other cities have restricted opening times for shops and restaurants while closing most spaces to outdoor gatherings.
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India advises schools to limit online instruction to 2-3 hours a day
Amy Kazmin in New Delhi
The Indian government has advised schools to limit online instruction for children below the age 13 to just two hours a day, and for older students to just three hours a day, as the country starts a new school year with the coronavirus pandemic still raging.
The restrictions, which are advisory in nature but likely to be adopted by many schools, highlight the heavy price that children are paying for authorities’ failure to control the virus.
Yet the inability to safely reopen schools barely figures in public debate as Prime Minister Narendra Modi’s government attempts to persuade citizens that the country has fared far better than many advanced nations in its battle against the virus.
India, with the third-highest confirmed coronavirus burden in the world, now has more than 935,000 known infections, and the recorded daily caseload is steadily rising, hitting new daily records, with nearly 30,000 new cases now being added every day.
India’s new academic year has started in July, but schools remain shuttered as they have been since March, with little indication as to when they reopen. Expensive private schools have returned to online education, however, as they try to limit the disruption to children’s learning.
In the new guidance, New Delhi has warned of the importance of limiting screen time and called on schools to find new methods to teach children. The government is also advocating that parents play a larger role in helping teach children or that local volunteers, neighbours or peers should help parents who are unable to do the job.
India’s education system was already failing to deliver even before the pandemic. Studies have repeatedly shown a large percentage of children, particularly in remote rural areas and crowded urban slums, were failing to master basic foundational skills such as reading and basic maths.
The inability to reopen schools — and the shortage of online devices in many working-class families — is expected to further widen India’s educational divide.
Since March, the Indian government has also advised that children under the age 10 of should not step outside at all.
Venezuela imposes ‘radical quarantine’ on capital Caracas
Gideon Long in Bogotá
The Venezuelan government has ordered the capital Caracas and the neighbouring state of Miranda into “Level 1 of radical quarantine” from Wednesday as the number of coronavirus cases continues to rise.
Venezuela has recorded some of the lowest coronavirus figures in Latin America, despite being in the midst of an acute economic and humanitarian crisis. It has registered just over 10,000 cases and 96 deaths in a country of 28m.
The opposition says Nicolás Maduro’s government is covering up the true extent of the outbreak. New York-based NGO Human Rights Watch has described the official numbers as “absurd”.
The government says there have been 1,079 cases in Caracas and 889 in Miranda.
The country has been in steep economic decline, which has been exacerbated by US sanctions, for years. Some 5m people have fled the country since 2015 creating one of the biggest migrant crises on the planet.
Tourist arrivals to Hong Kong drop by 90% in first half of 2020
Visitors to Hong Kong fell by almost 90 per cent in the first six months of the year as the coronavirus pandemic hit the city’s tourism industry.
A total of 3.5m people visited the Chinese territory in the six months to the end of June, according to figures from the Hong Kong tourism board.
The city’s government has limited entry to residents since March in a bid to limit the spread of coronavirus after the virus took off outside Asia. Arrivals must undergo a 14-day quarantine.
This week, Carrie Lam, chief executive, said those travelling to Hong Kong from high-risk countries must now test negative for coronavirus before boarding flights.
Hong Kong’s tourism industry was already in the doldrums after mainland Chinese visitor numbers dropped in the second half of 2019 following often violent street protests.
In the first half of 2020, the number of mainland Chinese visitors, who make up the bulk of the city’s tourists, fell 90.3 per cent compared to the same period last year. The fall for June was even steeper with a 99.8 per cent fall, compared to June 2019, to just 6,633.
Australia’s Victoria reports 238 new coronavirus cases
The Australian state of Victoria reported 238 new coronavirus cases on Wednesday as officials warned residents to follow lockdown restrictions or potentially face longer, more severe measures.
Daniel Andrews, Victoria premier, said one more person had died from Covid-19 over the past 24 hours and that the state had now conducted 1.2m coronavirus tests. He warned that residents must adapt to a “Covid normal” and said tougher restrictions may be needed if current rules are not followed.
The city of Melbourne entered a six-week lockdown last week after outbreaks were discovered in multiple postcodes.
“To the minority of people still making very selfish choices, not only is it the wrong thing to do, it’s just not very smart because Victoria police are out there in force and they are not mucking about,” Mr Andrews said.
Rick Nugent, Victoria’s deputy police commissioner, said the force had issued 350 infringement notices to people breaking lockdown restrictions since Thursday. Those caught included people who claimed to be playing Pokemon and a man who refused to leave a KFC restaurant.
Police have also issued infringement notices to 34 people at a party in a short-term rental property and 40 notices have been issued to people visiting massage parlours, he said.
Beijing records ninth consecutive day of no coronavirus cases
Health authorities in Beijing recorded a ninth consecutive day of no reported Covid-19 cases after re-imposing restrictions on parts of the city following an outbreak.
A total of 335 people were found to have Covid-19 in Beijing since the outbreak was first discovered at a wholesale food market on June 11. The city last reported the discovery of a single Covid-19 case on July 5.
There were also no new cases of people without symptoms testing positive for the virus. China does not record such infections in its official tally.
Beijing put restrictions on travel out of the capital to limit the spread of the virus.
China reported six new imported coronavirus cases to the end of Tuesday, taking the country’s official tally since the outbreak began to 83,6111.
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US biotech company Moderna’s potential Covid-19 vaccine produced immune responses in patients in the early stage trial, according to results published in a peer-reviewed journal for the first time.
Anthony Fauci, a senior member of the White House coronavirus task force, said Americans should trust “respected medical authorities” when making decisions about how to stay safe in the pandemic, just two days after the White House appeared to publicly turn against the public health expert.
Lael Brainard, a senior Federal Reserve official, has warned that the new spikes in coronavirus infections across the US could lead to a “second dip” in the world’s largest economy.
The International Baccalaureate is set to reassess thousands of grades it awarded this month after wide-ranging criticism from students and teachers over the marks generated by a system introduced in response to coronavirus.
US consumer prices bounced back in June, posting their first monthly rise since before coronavirus-related shutdowns rattled the economy. The consumer price index climbed 0.6 per cent from May, a swing from a 0.1 per cent drop a month earlier, beating economists’ forecast for a 0.5 per cent increase.
Wells Fargo slashed its dividend by 80 per cent after a sharp increase in charges for loan losses and lower interest rates knocked the lender to its first quarterly loss since the depths of the financial crisis.
Virgin Atlantic has agreed a £1.2bn rescue package that will help secure the grounded airline’s future for the next five years after months of negotiating with shareholders and private investors.
Delta Air Lines is to shed at least 15,000 employees through early retirement, an uptake the company said would allow it to impose fewer furloughs than US rivals.
3M is partnering with researchers at MIT in a bid to develop a low-cost diagnostic test for coronavirus that can be mass produced and could deliver results “in minutes”.
The UK government’s fiscal watchdog said on Tuesday that government borrowing was set to exceed £370bn in 2020-21 after including the measures in Rishi Sunak’s summer statement last week. At about 19 per cent of national income, the Office for Budget Responsibility said the deficit would be a peacetime record. It imparted further bad news for the Treasury as it outlined three plausible economic scenarios only one of which involved a full economic recovery.
Asia-Pacific stocks track Wall Street gains
Asia-Pacific stocks rose on Wednesday, following on from Wall Street gains as expectations for more stimulus for the coronavirus-hit economy offset rising infections in southern states.
Japan’s Topix added 1 per cent ahead of the Bank of Japan’s monetary policy decision later this morning. The central bank is expected to hold interest rates. The Kospi in South Korea was up 1.3 per cent and Australia’s S&P/ASX 200 rose 0.5 per cent.
Rising US-China tensions remained in the background after Donald Trump signed legislation allowing his administration to place sanctions on Chinese officials over a draconian national security law imposed on Hong Kong. Futures tip the Hang Seng index to gain 0.5 per cent.
On Wall Street overnight, the S&P 500 ended up 1.3 per cent and the Nasdaq Composite added 0.9 per cent.
Those gains came as Lael Brainard, Federal Reserve governor, said she supported doing more to boost the US economy. She said that a “thick fog of uncertainty” meant monetary and fiscal support were needed to help the country’s economic recovery.
US reports more than 60,000 new cases for fifth day in a week
Peter Wells in New York and Emma Boyde in Hong Kong
The US reported its fifth one-day increase of more than 60,000 coronavirus cases in the space of a week on Tuesday, led by Texas, which reported a record 10,754 new infections.
A further 736 people were reported to have died, according to Covid Tracking Project data, more than double the 327 on Monday. Florida (133), North Carolina (42), Alabama (40), Nevada (19), Utah (10) and Hawaii (3) all had record one-day increases in fatalities.
“The recent rise in deaths is not equally distributed across the US. Where cases have risen most rapidly, deaths have followed suit,” Covid Tracking Project researchers said on Twitter.
A further 62,879 people tested positive for the disease over the past 24 hours, according to Covid Tracking Project data, from 58,465 on Monday. That is the third-biggest jump on record and the fifth time the daily increase has topped 60,000 since first crossing the mark on Jul 8.
After Texas, the states with the biggest jump in new cases were Florida (9,194) and California (7,346), which were lower than recent records.
Of the 13 states to report increases of more than 1,000 cases, only Texas and Nevada (1,104) had record jumps, according to Financial Times analysis of Covid Tracking Project data. The only other state with a record increase was Oklahoma (993).