George Russell 7/19/2020, 10:06:02 PM

News you might have missed

Hong Kong said on Sunday it would ramp up testing at border checkpoints in a bid to check a new wave of coronavirus infections. Truck drivers and students, as well as air crew and shipping personnel, would be subject to greater scrutiny, authorities said. A government spokesman said exemptions to an entry ban were needed to “maintain … operation of the society and the economy, and to ensure an uninterrupted supply of all daily necessities”.

Singapore continues to record hundreds of positive coronavirus cases daily in foreign worker dormitories, even as few Covid-29 infections are found elsewhere in the city-state. The health ministry on Sunday reported an additional 257 cases, with all but eight found among migrant labourers living in group accommodation.

British prime minister Boris Johnson contradicted his own chief scientist on Sunday by playing down the idea of another nationwide lockdown due to the coronavirus. Speaking to the Sunday Telegraph, the prime minister said he did not think the UK would be in the same position as it was in March, when the first lockdown was imposed. Patrick Vallance, the UK’s chief scientific adviser, said on Friday that another national lockdown was possible.

Nigeria’s foreign minister, Geoffrey Onyeama, said on Sunday he had tested positive for coronavirus. He said he underwent his fourth Covid-19 test on Saturday “at the first sign of a throat irritation”. The 64-year-old Mr Onyeama wrote on Twitter: “Unfortunately this time it came back positive. That is life! Win some lose some. Heading for isolation in a health facility and praying for the best.” He has been foreign minister since 2015.

A legal fight has broken out between EssilorLuxottica, maker of Ray-Ban and Oakley glasses, and retailer GrandVision, its €7bn Dutch takeover target. EssilorLuxottica said on Saturday it had started legal proceedings in the Netherlands to access information allowing it “to assess the way GrandVision has managed the course of its business during the Covid-19 crisis, alleging it had breached its obligations under the merger agreement.

The fate of thousands of small UK businesses affected by coronavirus will be at stake this week when regulators take on the insurance industry at the High Court in a legal battle worth potentially billions of pounds. Judges will be asked to make decisions on the thorny issue of how much insurers will have to pay out to companies under their business interruption policies to meet claims for Covid-19-related losses.

The head of India’s largest bank said the country’s escalating coronavirus outbreak risks jeopardising a years-long clean-up of the financial system if authorities and lenders aren’t ready to support struggling sectors such as aviation or hotels. Rajnish Kumar, chairman of the State Bank of India — India’s largest lender with more than $500bn in assets — said public—sector banks may require further capitalisation by the government.

Seven more plaintiffs have joined a lawsuit against a US education department decision to force state schools to share Covid-19 relief funds with private schools. The city of New York, Hawaii, Maryland, Pennsylvania, Chicago, and the Cleveland and San Francisco school districts are plaintiffs joining a suit filed by the California and Michigan attorneys general. Maine, New Mexico, Wisconsin and the District of Columbia joined earlier.

George Russell 7/19/2020, 10:06:26 PM

Toronto mayor seeks restaurant reopening safeguards

The mayor of Canada’s largest city said on Sunday he has urged the Ontario provincial government to include additional safeguards for a gradual reopening to prevent a new surge of Covid-19 infections.

Toronto mayor John Tory, in a letter to Ontario premier Doug Ford, called for six extra conditions for bars and restaurants before the city could move to a more relaxed stage of reopening.

He said the rules should require patrons to be seated at all times unless using a toilet or paying the bill, not just while actually eating or drinking; require restaurants and bars to keep a customer log; reduce maximum capacity to ensure physical distancing can be “easily” maintained; enforce a midnight closure; require staff screening protocols; and implement mandatory face-covering requirements for staff and patrons.

“We have seen in other jurisdictions that further reopening can lead to increased outbreaks of Covid-19 and growing case count numbers,” Mr Tory told the premier. “We do not want to go in that direction.”

George Russell 7/19/2020, 10:06:48 PM

Trump plays down pandemic, calls Fauci an ‘alarmist’

Donald Trump, the US president, again played down the extent of the coronavirus pandemic in a Sunday television interview, repeating an earlier assertion that the virus would eventually disappear.

He claimed the US has the “lowest mortality rate” in the world from the coronavirus, although data indicate the world’s largest economy has one of the worst death rates.

Asked about a daily death toll of about 1,000 people, Mr Trump responded: “It is what it is.”

He described Anthony Fauci, National Institute of Allergy and Infectious Diseases director since 1984, as “a little bit of an alarmist” but added he had a good relationship with the epidemiologist.

Mr Trump insisted the pandemic was overblown, defending earlier comments that it would vanish of its own accord. “I’ll be right eventually,” he told Fox Business News. “It’s going to disappear and I’ll be right.”

George Russell 7/19/2020, 10:07:11 PM

More than 70% of Britons back mandatory masks, says poll

More than 70 per cent of British adults support the mandatory wearing of face masks in shops, a recent opinion poll indicates.

Overall, 71 per cent support compulsory use of face coverings. Nearly two-thirds of UK adults believe face masks are an effective way to contain the virus and almost half already wear a mask when going to the supermarket.

Approval of the UK government’s handling of the outbreak edged upwards, with 38 per cent approving — the highest rating since mid-May — compared with 43 per cent disapproving.

“The consistent trend of polling on public safety measures during the coronavirus crisis has been that the public are much more safety-first than we think,” said Adam Drummond, head of political polling at Opinium, which surveyed 2,003 UK adults from July 15-17.

“Complaints that public health measures trample on ancient sacred liberties are an extremely niche concern,” he added.

George Russell 7/19/2020, 11:04:36 PM

EU leaders struggle to break recovery fund logjam

Sam Fleming, Mehreen Khan and Jim Brunsden in Brussels

EU leaders haggled over how far to cut the size of a recovery fund worth hundreds of billions of euros over a fraught dinner on the third day of a marathon summit, after an offer of grants from richer northern capitals was immediately rebuffed by southern countries.

A “frugal” alliance of Austria, Denmark, the Netherlands and Sweden told other EU states they wanted to scale back proposed grants from €450bn to €350bn, coupled with another €350bn of loans, in a recovery package worth €700bn to help fight the coronavirus.

The offer was backed by Finland but received a cool response from nations that have been hardest hit by the pandemic.

Read more here

Alice Woodhouse 7/19/2020, 11:18:45 PM

Florida tops tally as US records 64,000 new cases

The US added 64,000 new coronavirus cases on Sunday as Florida, Texas and California continued to lead infection tallies.

Florida recorded a further 12,478 cases on Sunday with California reporting 9,329 new infections and Texas recording 7,300 cases, according to the Covid Tracking Project. Tallies for Sundays are often lower than other days because of slower reporting on weekends.

The three states have been hit by rising coronavirus cases in recent weeks, forcing restrictions designed to halt the spread of the virus to be reimposed.

There were 523 new deaths linked to Covid-19 reported on Sunday, which was the highest Sunday total since the end of May.

The spike in coronavirus cases is stretching laboratories and piling pressure on President Donald Trump to approve new federal funding for testing.

George Russell 7/19/2020, 11:38:54 PM

Canada bans Toronto Blue Jays baseball home games

The Toronto Blue Jays Major League Baseball team will not be able to stage home games due to the Covid-19 restrictions enforced in Canada.

“Based on the best-available public health advice, we have concluded the cross-border travel required for MLB regular season play would not adequately protect Canadians’ health and safety,” immigration minister Marco Mendicino said in a weekend statement.

Summer training has begun in Toronto for the Jays, including, pictured from left, first baseman Vladimir Guerrero, shortstop Bo Bichette and first base coach Mark Budzinski.

The Blue Jays have been the only Canada-based MLB team since the Montreal Expos became the Washington Nationals after the 2004 season.

Alice Woodhouse 7/20/2020, 12:11:53 AM

Asia-Pacific stocks struggle for direction as EU leaders in logjam

Asia-Pacific stocks lacked direction at the start of trading on Monday as EU leaders struggled to break a logjam over a coronavirus recovery package.

In Japan, the Topix was flat, the Kospi in South Korea added 0.1 per cent and the S&P/ASX 200 in Australia dipped 0.1 per cent.

EU leaders had yet to agree to a recovery deal for the bloc after their summit was extended into a third day as a “frugal” alliance of Austria, Denmark, the Netherlands and Sweden sought to scale back the proposed grants portion of the package.

On Friday, the S&P 500 ended the day 0.3 per cent higher to notch its third consecutive weekly gain.

S&P 500 futures were up 0.2 per cent.

George Russell 7/20/2020, 12:27:18 AM

Unions fear job losses in Tata Steel rescue plan

Michael Pooler and Jim Pickard in London

Union leaders have warned of potentially significant job losses if the owner of Britain’s biggest steelworks converts its furnaces to electric power in order to secure hundreds of millions of pounds of emergency state aid.

Tata Steel has been in talks for months over a coronavirus relief package under the government’s Project Birch for its UK operations, centred on the Port Talbot plant in south Wales that accounts for almost half its 8,000-strong workforce.

But ministers are imposing strict conditions on rescue deals, such as limits on executive pay and tough environmental targets in order to help the UK hit its 2050 “net zero” carbon target.

Read more here

Alice Woodhouse 7/20/2020, 12:53:19 AM

Japan’s exports fall faster-than-expected 26.2% in June

Japan’s exports fell at a faster rate than forecast in June, official figures showed on Monday as shipments to North America fell by almost a half.

Japan’s exports dropped by 26.2 per cent year on year in June, according to the Ministry of Finance. That reading was lower than a Reuters poll of economists that forecast a 24.9 per cent fall.

The June figure was a slight improvement on May’s 28.3 per cent fall when Japan was subject to government restrictions designed to slow the spread of coronavirus.

Exports to North America fell by 47.1 per cent year on year in June while those to western Europe dropped by 30 per cent.

Shipments to Asia fell at a slower pace, down 15.3 per cent as exports to China were unchanged.

Imports declined by 14.4 per cent, slightly better than the estimated 16.8 per cent fall.

The country recorded a ¥‎268.8bn ($2.5bn) trade deficit.

George Russell 7/20/2020, 1:16:27 AM

Car, plane manufacturers warn of UK ‘jobs bloodbath’

Daniel Thomas and Jim Pickard in London

More than half of UK manufacturers expect to make job cuts over the next six months as large employers across automotive, aerospace and other core industries brace themselves for a sustained downturn in demand during the Covid-19 pandemic.

The UK will lose high value skills in what is being called a “jobs bloodbath” by manufacturing trade group Make UK, whose members reported that their redundancy plans were ramping up as the prospects for a return to normal trading faded.

The warning comes amid gloomy predictions of the worst employment market since the 1980s, with millions of jobs at risk as companies aggressively cut back their operations to survive the downturn caused by the lockdown.

Read more here

George Russell 7/20/2020, 1:30:47 AM

China cinemas sell 496,000 tickets for reopening

China will ease some restrictions on conferences and cultural events from Monday, state-run media reported.

Cinemas will open Monday with limited capacity. According to the English-language Global Times, 496,000 tickets had been pre-sold nationwide by 6.30pm on Sunday.

Conferences with up to 500 participants will be allowed, the official Xinhua news agency reported, while exhibitions, sports events and live performances are expected to reopen gradually after risk appraisal.

The country’s professional football league will also resume this week.

George Russell 7/20/2020, 1:50:56 AM

UK companies slash dividends 57% as finances crash

Daniel Thomas and Attracta Mooney in London

British companies cut payouts to shareholders by £22bn last quarter as they raced to shore up their finances in the face of the economic crash caused by the coronavirus pandemic.

Only £16.1bn of dividends were paid in the second quarter this year, with 176 companies cancelling payouts and 30 more cutting them back — representing about three-quarters of companies that normally pay a dividend in the period.

This was significantly more than during the last financial crisis, when two-fifths of companies cut or cancelled payouts at the worst point, according to a report by Link Group, an investor services business.

Read more here

Alice Woodhouse 7/20/2020, 2:02:25 AM

China reports 17 coronavirus cases in Xinjiang region

Health authorities in China reported 17 new coronavirus cases in its Xinjiang autonomous region to the end of Sunday as officials battle an outbreak in the region.

The new cases in the western region that is home to most of China’s Uighur ethnic group take the total number of infections recorded since Wednesday to 47.

Officials have imposed what were described as “wartime” restrictions on Urumqi, Xinjiang’s capital.

The restrictions involve sealing of some residential compounds and a ban on travelling outside the city, in a bid to halt the spread of the virus.

The new Xinjiang cases and five imported cases take China’s total number of people reported to have contracted Covid-19 to 83,682.

Beijing, which saw an outbreak at a wholesale food market in early June, has now recorded 14 days without a locally-transmitted coronavirus case.

George Russell 7/20/2020, 2:12:22 AM

Argentina president pleads for understanding over $65bn debt

Benedict Mander in Buenos Aires

Alberto Fernández, Argentina’s president, has made an impassioned appeal for the world to accept that — with an economy devastated by coronavirus — he cannot budge from his final offer to restructure $65bn of foreign debt.

Weighed down by $323bn of borrowing, Argentina was already in a deep recession before the pandemic and in May the South American country defaulted for the ninth time in its history — although no creditors have attempted to sue it yet.

Mr Fernández told the Financial Times that “anything more would put our ability to [pay our debts] at risk, and I don’t want to swindle anybody”, as he dismissed bondholders’ demands for additional sweeteners before an August 4 deadline.

Read more here

George Russell 7/20/2020, 2:33:19 AM

Saudi Arabia coronavirus cases top 250,000

Saudi Arabia’s Covid-19 caseload passed 250,000 during the weekend, according to the kingdom’s health ministry.

An official statement announced on Sunday that 2,504 new confirmed cases of coronavirus had been reported, bringing the total number in the country to 250,920 cases, including 50,699 active cases undergoing treatment.

There have been 2,486 deaths, according to ministry data.

The official Saudi Press Agency said on Monday that Muslims approved to make the Hajj pilgrimage this year would begin seven days of self-isolation before departing for Mecca.

Fewer than 10,000 pilgrims would be permitted this year, compared with about 2.5m in 2019.

Workers have been disinfecting around the Ka’bah, the sacred shrine in Mecca, in preparation for visitors, pictured.

Alice Woodhouse 7/20/2020, 2:44:33 AM

Stocks slip as EU leaders struggle to agree on recovery fund

Hudson Lockett in Hong Kong

Global stocks fell on Monday after EU leaders failed to break a logjam over the size of a coronavirus recovery fund and as new infections in the US continued to rise.

Japan’s benchmark Topix index shed 0.4 per cent in early trading in Asia-Pacific, while Australia’s S&P/ASX 200 fell 0.5 per cent and South Korea’s Kospi dropped 0.7 per cent. Hong Kong’s Hang Seng dropped 1 per cent.

EU leaders on Sunday failed to agree the size of a recovery fund on the third day of a summit that saw an offer from richer countries of €350bn in grants coupled with another €350bn in loans rebuffed by the nations that have been hardest hit by the pandemic.

Countries including France, Germany and Italy are determined to ensure grants of no less than €400bn.

China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks rose 0.3 per cent, however, after Beijing announced that cinemas in the country would open with limited capacity. State media reported on Sunday that almost half a million tickets had been pre-sold ahead of the reopenings.

George Russell 7/20/2020, 3:05:01 AM

UAE reit considers delisting as regulator investigates

Simeon Kerr in Dubai

A Dubai-based real estate investment trust is considering delisting amid the worsening property downturn as the emirate’s financial regulator opened an investigation into its manager.

The Dubai Financial Services Authority said on Sunday that it began a probe into the management by Equitativa Dubai of Emirates REIT in late May. The reit’s board said it was considering delisting from Nasdaq Dubai as part of a “review of strategic options”.

The impact of the coronavirus pandemic on the trade and tourism-focused emirate is expected to heap more pressure on occupancy as firms cut staff and downsize office space.

Read more here

George Russell 7/20/2020, 3:26:36 AM

Pandemic drives business schools to overhaul curricula

Andrew Jack in London

Andrea Galeotti, a professor at London Business School, co-developed a presentation called Leading Through a Pandemic, while at Wharton business school, Mauro Guillén launched a course for academic credit on the impact on business of coronavirus.

Academics disagree on the extent to which the current crisis marks a radical turning point for capitalism, but business schools are rushing to adapt their research and overhaul their curricula to meet the demand for new skills and insights that the post-coronavirus world requires.

Read more here

George Russell 7/20/2020, 3:48:32 AM

India records more than 40,000 new cases in past day

Amy Kazmin in New Delhi

India has recorded more than 40,000 new coronavirus infections over the past 24 hours, a new all-time high, pushing the country’s total caseload to more than 1.1m cases as the virus continues to spread into rural areas.

Total confirmed coronavirus deaths in India have now exceeded 27,500, including 675 deaths reported on Sunday.

The Indian capital, New Delhi, which has been a major hotspot for the virus with more than 122,000 cases, has shown early indications that the city’s caseload is plateauing, with daily recoveries now exceeding new cases.

However, the virus is now spreading deeper into other states, including the under-developed state of Bihar, where the health infrastructure is exceedingly fragile.

In India’s tech hub of Bangalore — where infections are surging — hospitals are being overwhelmed by new cases.

Public health experts say the true magnitude of the epidemic and its toll is undoubtedly far higher than the official numbers, given the low rate of coronavirus testing. India’s testing rate for coronavirus is among the lowest of any major economy.

George Russell 7/20/2020, 4:09:36 AM

Yamana plans London listing as Covid-19 drives up gold

Neil Hume in London

One of Canada’s biggest gold producers plans to list in the UK as the precious metal’s price soars as a result of the coronavirus pandemic.

Yamana Gold, with a market value of $5.3bn, expects its shares to start trading on the London Stock Exchange in the next couple of months.

Peter Marrone, Yamana’s founder, said its attractions to investors would include its focus on the Americas, where it has five operating mines — including Cerro Moro in Argentina, pictured — and its record of paying almost $1bn in dividends since 2007.

Gold has risen almost 20 per cent this year to a nine-year high of more than $1,800 an ounce, boosted by nerves over the spread of Covid-19 and the outlook for global trade.

Read more here

George Russell 7/20/2020, 4:29:36 AM

S Korea’s Celltrion releases antibody treatment trial timeline

By Song Jung-a in Seoul

Celltrion, South Korea’s leading biopharmaceutical company, plans to start production of its antibody treatment for Covid-19 in September as the global race to develop drugs to combat the worsening pandemic intensifies.

The company is investing about Won300bn ($250m) to develop the treatment, which it aims to commercialise early next year.

The company will begin human trials of the treatment this week after South Korea on Friday approved an early stage of clinical trial of the experimental drug. Celltrion said 32 healthy volunteers have applied for the initial test at a local hospital after animal tests last month showed up to 100-fold reduction in viral load.

It aims to complete the first-phase trial, which will be conducted in South Korea and the UK, by September and expand the second-phase clinical trial for 200-300 people and third-phase trial for 2,000-3,000 people. The second and third-phase trials will be conducted globally for patients with mid and moderate symptoms and the company expects primary results by the end of this year.

“We aim to complete all clinical trials and win regulatory approval by the end of the first half of next year,” said company chairman Seo Jung-jin at an online press conference on Monday. “The keys will be how much we can reduce the production cost and how much capacity we can have.”

Global pharmaceutical companies are in a heated race to develop Covid-19 vaccines and treatments as the coronavirus has infected about 14m people and killed more than 580,000 globally.

Celltrion’s move to in-human trials follows similar advancements by US rivals Eli Lilly and Regeneron and comes as a handful of other groups – including Amgen, AstraZeneca, AbbVie and GSK – are expected to also start testing treatments on humans in the third quarter.

Mr Seo said its early production of the potential treatment before regulatory approval is to have its capacity ready for mass production. He expects the company’s capacity to be able to address 6m patients a year.

Alice Woodhouse 7/20/2020, 4:49:24 AM

Actress Aishwarya Rai Bachchan hospitalised for Covid-19

Benjamin Parkin in New Delhi

Aishwarya Rai Bachchan, an Indian film star and former Miss World, has been hospitalised for Covid-19 alongside her eight-year-old daughter, according to local media, the latest members of “Bollywood’s first family” caught up in India’s escalating coronavirus outbreak.

Last week septuagenarian Amitabh Bachchan, arguably Bollywood’s biggest star, was hospitalised with coronavirus along with his actor son Abhishek, Ms Rai’s husband.

While Ms Rai, 46, and her daughter initially quarantined at home after also testing positive, wire agency ANI and other outlets report that they too checked into a hospital in Mumbai over the weekend.

The outbreak among some of India’s most cherished icons has shocked the public, underscoring coronavirus’ uncontrolled and destructive spread through the country. The family were previously said to have mild symptoms despite their hospitalisation.

India added a high of 40,000 new infections over the past 24 hours to total 1.1m, the third highest of any country.

George Russell 7/20/2020, 5:10:12 AM

UK universities start to cull thousands of academics

Bethan Staton in London

British universities are cutting the jobs of thousands of academics on short-term contracts as the sector prepares to make sweeping cuts in the wake of coronavirus.

Institutions across the country have dropped hundreds of hourly posts and left temporary contracts to expire, leaving academics facing unemployment and depleting the capacity of departments to run courses and support students.

Universities are expecting a sharp drop in income as the number of foreign students falls owing to the pandemic.

Read more here

George Russell 7/20/2020, 5:31:07 AM

Australian state records drop in new Covid-19 cases

Victoria has recorded a drop in coronavirus cases, raising hopes that a surge in Melbourne has peaked.

The Australian state’s premier, Daniel Andrews, confirmed 275 new cases on Monday, down from 363 the previous day, adding that an elderly woman died overnight.

The state on Monday began an official inquiry into breaches of a hotel quarantine regime, which was suspected of causing the recent surge.

There have been 1,283 cases recorded in Victoria in the past four days, compared with single or double-digit daily rises in other states.

More than 5m people in and around Melbourne have been put into lockdown.

Police on Sunday night fined 20 people for lockdown violations in a Melbourne flat after a noise complaint was received.

The illegal partygoers were removed from the residence, a short-term rental, and each was issued a fine of A$1,652 (US$1,154), according to a Victoria Police statement.

George Russell 7/20/2020, 5:50:20 AM

Developing nations squeezed as virus fuels public spending

Jonathan Wheatley in London

Some of the world’s largest developing economies are set to face a fiscal crisis in the coming years unless they can roll back huge increases in public spending enacted in response to the Covid-19 pandemic, analysts have warned.

The economic downturn caused by the pandemic, combined with rising healthcare spending to tackle the spread of the virus, have caused budget deficits to soar in many countries. They will have to face the choice of risking public unrest by cutting back on spending, or negotiating with investors to restructure their debts.

In some countries — including India, Malaysia, Poland, Qatar, South Africa and Thailand — pandemic-related public spending has topped 10 per cent of gross domestic product.

Read more here

Sarah Provan 7/20/2020, 6:09:02 AM

Julius Baer first-half profit surges 43% on focus of ultra wealthy clients

Owen Walker in London

Heavy trading by ultra wealthy clients helped Julius Baer push profits up by nearly a half to a record in the first six months of the year.

The Swiss private bank reported a 43 per cent rise in net profit to SFr491m ($514m) on Monday, while earnings per share rose 45 per cent to SFr2.28.

“With the full economic impact of Covid-19 still ahead of us, we are confident that we are well prepared for a challenging second half of the year,” said Philipp Rickenbacher, chief executive of Julius Baer.

In February Mr Rickenbacher, who became chief executive last year, unveiled a shift in emphasis for the bank away from asset gathering. The strategy included 300 job cuts and plans to end relationships with clients that were no longer profitable.

Just weeks later, Julius Baer was hit by sanctions from Finma, the Swiss markets regulator, tied to its connections in alleged cases of corruption between 2009 and 2018, involving Petróleos de Venezuela, a state-owned energy group, and Fifa, international football’s governing body.

George Russell 7/20/2020, 6:09:17 AM

UK is first to sign up for potential German vaccine

Joe Miller in Frankfurt

Britain has become the first country to secure supplies of a potential Covid-19 vaccine developed by Germany’s BioNTech and US pharmaceutical maker Pfizer, signing an agreement for 30m doses to be delivered over the next two years.

The companies’ coronavirus vaccine is one of 23 currently being evaluated in clinical trials, according to the World Health Organization, and will soon be tested on 30,000 volunteers, following positive preliminary data.

BioNTech and Pfizer, which aim to have “some form of regulatory approval” in the US for their vaccine by October, have previously said they have the capacity to manufacture 100m doses by the end of the year, and more than 1.3bn by the end of 2021.

Read more here

Naomi Rovnick 7/20/2020, 7:04:31 AM

Euro jumps as EU leaders edge closer to recovery fund agreement

The euro hit a four-month high against the dollar after EU leaders appeared to edge closer to an agreement over the size of a new coronavirus recovery fund.

After three days of haggling about the recovery fund, which has pitted the leaders of richer countries against those nations hardest hit by the pandemic, Dutch prime minister Mark Rutte and Austrian chancellor Sebastian Kurz both expressed optimism about breaking the logjam.

Overnight negotiations broke up at 6am on Monday morning after Charles Michel, president of the European Council, floated a new figure of €390bn in grants for stricken countries. This was lower than proposals going into the summit but higher than earlier demands from an alliance of so-called “frugal” nations including the Netherlands.

The euro strengthened by 0.3 per cent to $1.146, its highest level against the dollar since early March. Against sterling, the euro jumped 0.53 per cent to 91.36p.

Sarah Provan 7/20/2020, 7:06:15 AM

Cat Rutter Pooley’s City Bulletin: Covid-19 vaccines, Amigo, gold

Two developments on Monday tie Britain to international players in the Covid-19 vaccine race. First, the UK has become the first country to secure supply of a potential vaccine developed by Germany’s BioNTech and US pharma group Pfizer. Britain has signed up for 30m doses to be delivered over the next two years, plus another 60m doses of a different vaccine from Valneva of France.

Second, FTSE 100 group GlaxoSmithKline plans to take a 10 per cent stake in BioNTech rival CureVac, another German biotech developing a vaccine. GSK will invest £130m (€150m) for the equity stake, a month after the German government spent €300m on a 23 per cent share in CureVac following reports it had attracted interest from the Trump administration.

GSK and CureVac are set to collaborate on the special type of technology used by CureVac – mRNA technology – that can help develop vaccines more quickly than traditional methods. GSK will pay £104m in cash upfront, and could make regulatory and commercial milestone payments of up to €700m depending on product sales. The collaboration won’t cover CureVac’s existing Covid-19 mRNA and rabies vaccine research programmes.

Finally, Synairgen, a small drug development group reported positive results from a clinical trial of its drug SNG001. Patients who received the treatment had a 79 per cent lower risk of developing severe disease, and were more than twice as likely to recover from Covid-19 compared with those on the placebo, Synairgen said.

Other news in brief

The FCA test case on business interruption insurance kicks off in court today. Insurers have resisted paying out for Covid-related disruption under the policies. The court case will decide whether they are right to do so.

The coronavirus crisis has cost investors £22bn in lost dividends, with about three-quarters of groups that usually pay a dividend in the second quarter either cancelling payouts or cutting them back. Only £16.1bn of dividends were paid in the second quarter, the lowest quarterly dividend figure since 2010 and almost 60 per cent below the amount paid out in the same period last year.

Gold rush: A $5.3bn Canadian gold producer is planning a London listing to capitalise on soaring gold prices. Yamana, listed in Toronto, has applied for a standard listing on the London Stock Exchange. The gold price is up almost 20 per cent this year, while Yamana’s shares have climbed more than 40 per cent.

Guarantor loan provider Amigo Holdings has long-delayed results out today, along with a new chairman. It swung to a loss after a sharp rise in complaints

Sarah Provan 7/20/2020, 7:20:57 AM

GSK scoops up 10% of German vaccine producer CureVac for £130m

Donato Paolo Mancini in London

GlaxoSmithKline is to buy a 10 per cent stake in CureVac, the German vaccine manufacturer that had entered the crosshairs of Donald Trump for its experimental coronavirus jab.

Under the deal, GSK will invest £130m, an upfront cash payment of £104m and a one-off, reimbursable payment for vaccine capacity reservation of £26m to CureVac, covering up to five mRNA-based vaccines and monoclonal antibodies targeting infectious diseases.

The agreement does not include CureVac’s existing Covid-19 and rabies vaccine programmes. CureVac will be eligible to receive up to £606m in various milestone payments, as well as tiered royalties on revenues, said the companies.

The mRNA technology, when harnessed in vaccines, allows the body to fend off infections by expressing proteins that are called antigens. Some efforts to investigate a Covid-19 vaccine also rely on this technology.

Last month, Berlin said it plans to invest €300m for a 23 per cent stake in CureVac, a move that was disclosed on the day the private biotech said it was planning an initial public offering. The company had attracted the interest of the White House in March, German media reported, after an executive met with Mr Trump.

Sarah Provan 7/20/2020, 7:38:45 AM

Drug results show positive signs in treatment of Covid-19 patients

Anna Gross in London

An immunosuppressant drug produced by biotech company Synairgen has shown positive results in reducing the severity of Covid-19 in hospitalised patients.

Patients who received interferon beta, which is commonly used in the treatment of multiple sclerosis and thyroid dysfunction, were twice as likely to recover from Covid-19 than the placebo control group, the company said on Monday.

Recipients of the drug were 80 per cent less likely to develop a more severe version of the disease while breathlessness was “markedly reduced”, the results showed.

Synairgen, which was spun out from Southampton University, conducted its trial on 101 patients from nine specialist hospital sites in the UK between March 30 and May 27. Three subjects in the study who received placebo died, while no-one who received interferon beta did.

The results of the study are still awaiting peer reviews and publication.

Synairgen’s share price rose 174 per cent to 100p in early Monday trading.

Harry Dempsey 7/20/2020, 8:09:35 AM

Renault first-half car sales slide but point to June pick-up

David Keohane in Paris

Renault sales dropped by more than a third in the first half as the coronavirus pandemic hammered demand for cars worldwide.

Electric vehicle sales rose by a half while June brought some relief, the French carmaker said on Monday.

The group, which is 15 per cent owned by Emmanuel Macron’s government, sold 1,256,658 vehicles in the first six months, a drop of 34.9 per cent. Renault on Monday pointed to “a strong commercial recovery in June”.

Sales in Europe were down 41.8 per cent, in a market down 38.9 per cent, said Renault, but again sales “picked up” in June. Sales of its electric Zoe car rose 50 per cent in the first half.

Renault was “particularly affected” in Russia, India, Brazil and China.

The pandemic follows a tumultuous year for Renault, with the arrest of boss Carlos Ghosn at the end of 2018 rocking the carmaker and shaking its alliance with Japan’s Nissan.

Luca de Meo took the reins as chief executive at the end of last month, taking over a group that has recently put in place a €2bn cost-cutting plan and taken on €5bn state-backed credit line to see it through the Covid-19 pandemic.

Harry Dempsey 7/20/2020, 8:17:53 AM

Italian borrowing costs hit lowest level in more than four months

Tommy Stubbington in London

Italian borrowing costs fell to their lowest since early March on Monday as signs that EU leaders are edging towards a deal on a pandemic recovery fund fuelled a rally in riskier eurozone government debt.

Italy’s 10-year bond yield fell 0.06 percentage points to a four-and-a-half month low of 1.12 per cent, as investors bought their debt pushing up prices and lowering yields. Greek, Spanish and Portuguese bond yields also dropped, despite the gridlock in negotiations over the weekend.

Investors were “taking heart from the apparent progress towards an EU agreement”, with talks set to resume in the afternoon, strategists at Rabobank said.

A group of so-called “frugal” countries informally led by the Netherlands is resisting plans to allow the European Commission to borrow unprecedented sums to support the countries hardest-hit by the pandemic, a step which would bolster the finances of weaker eurozone members.

Analysts at Commerzbank said a further setback in Monday’s talks should not spark a major sell-off for riskier eurozone bonds.

They said:

For one, market expectations going into summit were subdued. More important, even a failure to reach an agreement this afternoon would not terminate the recovery fund as disagreements…can still be solved during the summer.

Harry Dempsey 7/20/2020, 8:45:12 AM

Virus cluster found at NHS contact tracing centre in Scotland

Mure Dickie in Edinburgh

A cluster of coronavirus cases has been found at a Scottish call centre carrying out test-and-trace work for NHS England, Scotland’s deputy first minister said on Monday.

The discovery of six cases at the facility operated by US outsourcing company Sitel in North Lanarkshire near Glasgow comes amid a rise in reported weekend infections of Covid-19 in Scotland.

John Swinney, the deputy first minister, said the Sitel call centre has been closed and “extensive” tracing of contacts of staff was under way and there would be examination of whether procedures for stopping the spread of the virus had been properly followed there.

“If there has been transmission within the building [or] facility, then something has gone wrong,” the deputy first minister told BBC Radio Scotland.

Official data suggests prevalence of Covid-19 in Scotland is much lower than in England. Government modelling last week estimated that 700 people in Scotland had the virus.

However, the Scottish government has repeatedly warned that the easing of lockdown rules including the reopening of pubs and restaurants have created new risks of transmission. On Saturday, 21 new confirmed infections of Covid-19 were reported, the largest daily increase since June 21, followed by 23 more reported on Sunday.

Harry Dempsey 7/20/2020, 9:42:58 AM

Taiwan export orders rise at fastest rate in two years

Kathrin Hille in Taipei

Taiwan’s export orders increased at the fastest pace in two years in June, as strong demand for electronics and communication equipment continues to offset the weakness in most other sectors.

Companies received export orders worth $41bn in June, up 6.5 per cent compared with the same month last year and the biggest jump since July 2018. Orders for electronic products increased the most with a 23.9 per cent jump compared with June 2019.

“The main reason is that 5G and high performance computing are developing rapidly and, combined with the continuation of working from home, are fueling demand for contract manufacturing of semiconductors, chip design, memory chips, printed circuits,” the Ministry of Economic Affairs said in a statement.

Overseas orders in most other sectors continued to fall compared with last year, but the slump showed signs of easing, with machinery, basic metals, plastics products and chemicals reverting to positive growth compared with a month earlier.

Orders from China for Taiwanese machinery had increased, offsetting still sluggish investment in south-east Asia, Europe and Japan as the pandemic continues to weigh on economic activity, the ministry said.

Harry Dempsey 7/20/2020, 10:36:26 AM

Australia eases visa restrictions to lure international students back

Australia plans to resume granting visas to international students in an attempt to kick start a key revenue stream for universities that have been pummelled by the coronavirus pandemic.

Canberra has made five changes to its immigration policy to boost the competitiveness of its fourth-largest export sector, the acting immigration minister said.

The changes include restarting the issuance of visas to international students, waiving additional student visa application fees and allowing international students to apply to return on a post-study work visa if unable they cannot go back to complete their studies.

The rules are aimed at ensuring the safety of Australians and intended to avoid disadvantaging international students further, Alan Tudge said on Monday.

“Doing so will not only support the education sector, it will also have flow-on effects for many local communities and businesses, including accommodation services, tourism, hospitality and retail,” Mr Tudge said.

Australia’s borders remain closed, with only citizens, residents and immediate family members allowed to travel into the country. Australians are not permitted to travel overseas.

The tourism minister said last month that he expects the border to stay closed until next year and airline Qantas has suspended most international flights until October.

Sarah Provan 7/20/2020, 11:33:26 AM

M&S to cut 950 jobs in business shake-up

Patricia Nilsson in London

Marks and Spencer plans to cut nearly 1,000 jobs as the disruption wrought by coronavirus puts pressure on the UK retailer’s profits.

The FTSE 250 company said on Monday that the 950 job cuts would affect office support staff as well as store and property managers.

M&S said the changes, part of a previously announced restructuring programme, were aimed at cutting down on role duplication and would lead to clearer leadership accountability.

The group’s pre-tax profit before exceptional items tumbled by a fifth in the year to March to the lowest level in at least three decades. Covid-19 has dealt a heavy blow to retailers that rely on their bricks-and-mortar premises, which M&S has only partially offset with the strength of its grocery business.

“Through the crisis we have seen how we can work faster and more flexibly by empowering store teams and it’s essential that we embed that way of working,” said Sacha Berendji, director of retail, operations and property at M&S. “Our priority now is to support all those affected through the consultation process and beyond.”

The company said it had started collective consultation and had as its “intention” to offer voluntary redundancy to those affected by the cuts.

Mamta Badkar 7/20/2020, 12:02:49 PM

Halliburton reports $1.7bn loss as oil crash bites

Myles McCormick in London

Halliburton posted a net loss of $1.7bn in the second quarter and took a write down of $2.1bn as the crash in crude prices causes work to dry up in the oil field services sector.

The results mark the third straight quarter of losses for the company — one of the world’s biggest oil field services providers — which reported a profit of $75m in the same period last year. Adjusted earnings of 5 cents a share, however, topped analyst expectations for a loss of 11 cents. Total revenue of $3.2bn was down 45 per cent on last year, broadly in line with analysts estimates.

Services groups carry out the oil industry’s grunt work, from drilling wells to installing pipes and supplying sand and maintaining roads. They tend to be hit particularly hard by downturns, as producers slash expenditure and put any new work on hold.

The bulk of the 100,000 jobs lost in the US oil and gas industry since the beginning of the crash — triggered by the coronavirus pandemic and a price war between Russia and Saudi Arabia – have been in the services sector.

The impairment charge makes Halliburton the latest oil company to account for the oil-price collapse on its balance sheet. Analysts expect hundreds of billions of dollars worth of write downs across the sector before the year is out.

Jeff Miller, Haliburton chief executive said the company had performed well given the “tough market”. “Our results demonstrate a significant and sustainable reset to the power of our business to generate positive earnings and free cash flow,” he said.

Sarah Provan 7/20/2020, 1:22:23 PM

Craving for Covid-19 cure fuels demand for biotechs, led by Synairgen

The FTSE index focused on biotech and other pharmaceutical stocks rose 2.5 per cent, buoyed by a number of coronavirus trials and developments that conveyed the heightened demand for a Covid-19 cure.

Shares in UK-based Synairgen accelerated their gains during trading on Monday after the respiratory drug developer reported positive results from a clinical trial of one of its drugs aimed at treating Covid-19. The disease has claimed more than 600,000 lives worldwide in eight months.

The biotech group’s share price rose more than six times by early afternoon trading in London, giving it a market capitalisation of more than a quarter of a billion pounds. Synairgen has 14 employees, its annual report published last month said.

Taking off from its Friday close of 36.5p, the stock jumped as much as 550 per cent to as high as 240p, a never-before struck level for the tiny biotech group that was originally spun off from Southampton university. The price was recently at 174p, putting its market cap at £260m. On Friday its outstanding shares were valued at nearly £55m.

That compares with a share price, since the group’s initial public offering in 2004, that has been as low as 6.88p, a level it hit in September 2017.

The FTSE 350 pharmaceuticals and biotechnology index, host to a market cap of about £213bn, has risen nearly 11 per cent this year. AstraZeneca rose 5 per cent while Oxford BioMedica was up 1.6 per cent.

Other Covid-19 news highlighted France’s Valneva, the recipient of a 60m vaccine dose order from the UK government. That propelled its share price more than 12 per cent higher on Monday. Britain became the first country to secure a supply of a potential vaccine developed by Germany’s BioNTech with US group Pfizer when it ordered 30m doses over the next two years. BioNTech has risen 66 per cent over the past 30 days.

Investors in GlaxoSmithKline were relatively unmoved by the news of the UK heavyweight’s plans to take a near 10 per cent stake in CureVac, a BioNTech rival and another German biotech developing a vaccine. GSK shares were down 0.6 per cent in early afternoon London trading.

Harry Dempsey 7/20/2020, 2:02:52 PM

Gulf states to increase borrowing by record $100bn in 2020, S&P says

Simeon Kerr in Dubai

Gulf Arab states are expected to increase borrowing by a record $100bn this year as fiscal deficits widen on lower oil prices and the economic impact of coronavirus, S&P predicts.

The new debt, along with a rundown on government assets of about $80bn, will finance the overall government deficit of $180bn across the six Gulf Cooperation Council states, the rating agency said in a research report on Monday.

The GCC states’ collective government deficits will reach about $490bn from 2020 to 2023, of which 55 per cent relates to Saudi Arabia, followed by 17 per cent in Kuwait, and Abu Dhabi with 11 per cent.

About 60 per cent of this collective deficit would be financed by debt issuance, S&P said, citing recent trends. The GCC has already issued about $35bn in eurobonds this year.

The average GCC government deficit in 2020 — 18 per cent of combined gross domestic product — is slightly higher than the 16 per cent of GDP recorded in 2016 in the aftermath of the oil price collapse in the second half of 2014.

S&P expects deficits to shrink back in 2021 on higher oil prices, forecasting an average for Brent crude of $30 a barrel for the rest of this year and $50 a barrel in 2021, but the sizable deficits will nonetheless see state balance sheets deteriorate until 2023. Brent crude was trading at about $42 per barrel on Monday.

Sarah Provan 7/20/2020, 2:05:06 PM

Oxford Covid-19 vaccine shows promise in early trials

Anna Gross in London

A coronavirus vaccine being developed by Oxford university in collaboration with AstraZeneca has shown promise in an early trial.

The vaccine generated “robust immune responses” and was “tolerated” among patients in the study, AstraZeneca said on Monday.

The trial, which involved 1,077 healthy adults, induced a strong antibody and T-cell response for at least 56 days, a positive indication that the immunisation could be effective in preventing disease.

A sub-trial conducted on 10 patients suggested that a second dose of the vaccine could generate an even greater immune response, the study found.

AstraZeneca’s announcement came alongside the publication in The Lancet medical journal on the trial.

The authors of the study noted that further tests would need to be done as the Phase 1 trial only demonstrated the efficacy of the vaccine in laboratory conditions, and not during infection in the community.

Harry Dempsey 7/20/2020, 2:52:05 PM

Q magazine to fold after 34 years

Patricia Nilsson in London

Music magazine Q will close after the next issue, as owner Bauer Media confirmed it would get rid of 10 UK titles in total.

The German company on Monday said it had concluded a pandemic-induced review of its UK portfolio and would close five magazines, merge another two and sell three titles. Aside from Q, car title Modern Classics will also close. Sea Angler, Car Mechanics and Your Horse have been sold to UK publisher Kelsey Media.

Chris Duncan, chief executive of Bauer’s UK publishing arm, said the “tough decisions” would help the company recover from the pandemic, which has wreaked havoc on the advertising spend that much of the publishing industry relies on.

Ted Kessler, the editor of 34-year-old title Q, said on Twitter: “The issue that comes out on July 28 will be our last. The pandemic did for us and there was nothing more to it than that.”

Bauer would not immediately confirm how many titles it had closed internationally. In March, the company shut its entire New Zealand operation, shedding over 200 jobs.

Peter Wells 7/20/2020, 3:44:14 PM

Florida reports sixth straight day of more than 10,000 new cases

Florida reported a daily increase of more than 10,000 coronavirus cases for the sixth consecutive day and more than 90 new deaths.

A further 10,347 people tested positive for Covid-19 over the past 24 hours, the state’s health department said on Monday, down from 12,478 on Sunday.

Florida has reported a daily increase of more than 10,000 cases in 10 of the past 11 days, including the July 12 record of 15,300 that was the biggest one-day increase for any US state.

A further 92 people in Florida died from coronavirus over the past day. The total death toll for residents crossed 5,000 for the first time, reaching 5,072, while the state’s health department reports that 111 non-residents have died since the pandemic began. That tally has increased by almost 1,600 since the end of June.

Overall, Florida ranks eighth among US states with the highest coronavirus death tolls, behind Michigan and ahead of Connecticut.

On Sunday, there were 9,363 people currently in the state’s hospitals with coronavirus, the highest since Florida began reporting current hospitalisation levels 11 days ago.

Peter Wells 7/20/2020, 5:08:38 PM

Chicago reintroduces curbs on bars and some indoor businesses

Chicago will reintroduce restrictions on bars, restaurants and gyms and limits to personal gatherings following a recent increase in coronavirus in the city.

From July 24, bars without a food licence will no longer be able to serve customers alcohol indoors, while the maximum party size at restaurants and pubs will be reduced to six people and indoor fitness classes limited to a maximum of 10 people. Grooming services that require the removal of a face covering — such as barbers and spa services — will no longer be permitted and residential property managers will be asked to limit guest entry to five people per unit in an effort to prevent indoor gatherings and parties.

Lori Lightfoot, Chicago mayor, said on Monday that the city had “made so much progress” in containing the spread of the virus, but while it “remains under control” locally, “we are again seeing a steady increase in new cases”.

“While we aren’t near the peak of the pandemic from earlier this year, none of us wants to go back there, and we feel these restrictions will help limit further community spread.”

A further 192 new cases were reported over the past 24 hours, Allison Arwady, commissioner of the Chicago Department of Public Health, revealed on Monday, bringing the seven-day average to 233, compared with levels of more than 1,000 during the city’s pandemic peak in May.

Dr Arwady said Chicago could soon be back above 200 cases a day “given what we are seeing around the country … will likely see some additional increase here”, and put the city in what the Centers for Disease Control and Prevention defines as a high-incidence state. While a breach of that level would not equal an automatic rollback of reopening, officials would analyse the data to determine whether that might mean the reintroduction of restrictions that target bars or long-term care facilities, for instance.

“If we get to a point where we are up to 400 cases per day that’s the equivalent of where the states are that we are requiring quarantine for our visitors. It’s the equivalent of needing to go back to a phase three, really pulling back on major activities.”

Chicago, the third most populous city in the US, was the site of the second confirmed case of coronavirus in the US back in January and the nation’s first known human-to-human transmission. About 57,000 people in the city have tested positive for Covid-19 and 2,727 have died since the pandemic began, according to city health officials.

Matthew Rocco 7/20/2020, 5:52:16 PM

Trump to hold coronavirus briefing on Tuesday

Lauren Fedor in Washington

Donald Trump will lead a White House coronavirus task force briefing for the first time in nearly three months, as the number of Covid-19 cases continues to rise in parts of the American south and west.

The US president told reporters at the White House on Monday morning that he would hold a press conference at 5pm on Tuesday.

“We’ve had this big flare-up in Florida, Texas, a couple of other places,” he said. “I’ll get involved, and we’ll start doing briefings … it’s a great way to get information out to the public as to where we are with the vaccines, with the therapeutics, and, generally speaking, where we are.”

Last week, Kellyanne Conway, a close adviser to the president, hinted that Mr Trump would return to the podium, telling reporters “people want to hear from the president of the US”.

Mr Trump held long, daily press conferences when coronavirus first began spreading across the US earlier this year. But he stopped briefing reporters shortly after attracting widespread criticism for suggesting that people could ingest household disinfectant to ward off infection, and has not led a coronavirus press conference since late April.

The president told reporters on Monday that the briefings were “very successful” and “record numbers” had watched them.

“In the history of cable television, television, there has never been anything like it,” he added.

Mr Trump, who is seeking re-election in November, has seen his approval ratings fall as more Americans disapprove of his handling of Covid-19, which has killed more than 140,000 of them. Joe Biden, the presumptive Democratic presidential nominee, leads Mr Trump by double digits in some national polls.

Peter Wells 7/20/2020, 7:16:54 PM

Florida teachers union files lawsuit over school reopening order

Florida’s teachers union has filed a lawsuit against governor Ron DeSantis, the state board of education and other officials challenging their order to reopen schools even as the number of new coronavirus cases in the region continue to surge.

The lawsuit, filed in Miami on Monday, aims to overturn an emergency order earlier this month from Florida’s education commissioner, Richard Corcoran, requiring all schools to be open at least five days a week and provide their full range of services when the new year begins in August.

Florida Education Association president Fedrick Ingram, in a virtual press conference, called the order — which has also received the support of Mr DeSantis — “reckless” and “unconstitutional”.

Mr DeSantis, Mr Corcoran, the Florida Department of Education, the Florida State Board of Education and Carlos Gimenez, mayor of hard-hit Miami-Dade county, have all been named in the lawsuit.

Florida on Monday reported a further 10,347 new cases of coronavirus, and 92 deaths, over the past 24 hours. Since the pandemic began, more than 360,000 people in Florida have tested positive for the virus and 5,183 people have died, positioning it as one of the new hotspots for the virus in the US.

“Everyone wants schools to reopen, but we don’t want to begin in-person teaching, face an explosion of cases and sickness, then be forced to return to distance learning,” Mr Ingram said in a separate statement. “Florida’s constitution demands that public schools be safe. Teachers and parents want our schools to meet that basic standard.”

The White House has been vocal about pushing for schools to reopen, with in-classroom learning, at the end of summer. Donald Trump has threatened to withhold federal funding from schools that do not reopen physical classrooms, but has no authority to hold back such finances without congressional approval.

The reopening debate has created a patchwork of planned approaches across the US. New Jersey governor Phil Murphy said on Monday that the state’s education department would soon release guidance allowing parents to choose the option of all-remote learning for their children, adding there “are a lot of moving parts to this” but that “we want to get it right”.

California last Friday set out guidelines that will probably prevent most of the state’s schools from returning to in-classroom learning owing to the continued spread of coronavirus there, having had the state’s two biggest school districts — Los Angeles and San Diego — decide days earlier they would not allow students back into classrooms.

Some states remain more hopeful. Officials in Texas, which is also experiencing a surge in Covid-19 cases and hospitalisations, have decided to give schools at least four weeks to delay the resumption of physical learning, having previously earmarked a three-week grace period from the start of the term. Iowa’s governor told schools there they must prioritise in-classroom learning and must be approved by officials if they wish to offer more than half of their instruction online, jeopardising the plans of some schools to restart the term remotely.

Peter Wells 7/20/2020, 7:29:52 PM

California has smallest increase in new cases in two weeks

California reported its smallest one-day increases in coronavirus cases and deaths in two weeks on Monday.

A further 6,846 people tested positive for the virus over the past 24 hours, the state health department said this afternoon, following three consecutive days of more than 9,000 cases. The average of the past seven days in 8,911, while the state reported a record increase of 11,694 on July 8.

Nine people died from coronavirus over the past day, one tenth of Sunday’s increase and following rates of more than 100 for the back part of last week.

Other states that have emerged as recent hot spots for the virus in the US also reported an easing in their latest virus numbers, although figures on Monday tend to be lower because of delays in reporting over the weekend. Arizona reported 1,559 new cases and 23 new fatalities, both the lowest since last Monday, while 1,268 new cases in North Carolina was the state’s smallest daily increase since June 30.

Mamta Badkar 7/20/2020, 8:11:18 PM

IBM revenues fall as companies cut back on traditional IT

Richard Waters in San Francisco

IBM’s revenue dropped 5.4 per cent in the second quarter, as the coronavirus crisis led companies to cut back spending on traditional applications and systems and shift a bigger slice of their IT budgets to the cloud.

The US technology supplier said it had seen some benefit from the swing in IT spending, with a 34 per cent jump in its own cloud revenue in the latest quarter, to $6.3bn. But that increase — nearly $900m of it stemming from its $34bn acquisition of open source company Red Hat — was not enough to make up for a fall-off in areas such as applications development, consulting and transaction processing.

Jim Kavanaugh, chief financial officer, said some parts of the company’s business, such as consulting, had seen a recovery in June as Covid-19 cases declined. Customer confidence “really is correlating with the curves of the pandemic”, he said. He would not comment on whether business had suffered as case numbers in the US turned up again in July.

IBM’s shares have fallen roughly 15 per cent since the coronavirus crisis struck, as investors have moved away from traditional IT suppliers and bet on the tech companies better positioned to catch the growth of spending on the cloud. They climbed 5 per cent in after-hours trade on Monday.

IBM said revenue in the three months to the end of June fell to $18.1bn from $19.2bn the year before. Stripping out the impact of acquisitions, business divestitures, and foreign currency changes, reported revenue would have fallen 6-7 per cent. Pro forma earnings per share fell to $2.18, from $3.17.

However, the figures still topped most analysts’ downbeat estimates. Wall Street had been expecting revenue of $17.72bn and earnings per share of $2.07. IBM withdrew its financial guidance for the year after the first quarter.

Revenue from its business services division – which includes consulting and is heavily affected by cyclical pressures — fell 7 per cent to $3.9bn. Global technology services — which has suffered in the secular shift to cloud spending – dropped 8 per cent, to $6.3bn.

Matthew Rocco 7/20/2020, 8:27:24 PM

Nasdaq hits record high as US technology shares gain

US stocks advanced on Monday as investors gauged upbeat developments in a vaccine trial and the latest in negotiations for additional fiscal support amid fallout from the pandemic.

Wall Street’s S&P 500 closed 0.8 per cent higher on strong gains in the consumer discretionary sector. A rally in technology shares powered the Nasdaq Composite to a record closing high, with the index jumping 2.5 per cent in its biggest daily rise since April.

Amazon had its best day since December 2018, surging 7.9 per cent to close just shy of its record high. Microsoft was up more than 4 per cent.

Lawmakers returned to Washington with another stimulus package at the top of the agenda. Steven Mnuchin, US Treasury secretary, indicated during a White House meeting that the Trump administration would open talks for $1tn in supplemental aid. Mitch McConnell, Senate majority leader, said Republicans would put forward a “strong starting point” for a stimulus bill as early as this week.

Mamta Badkar 7/20/2020, 8:32:17 PM

Developing nations squeezed as virus fuels public spending | Free to read

Jonathan Wheatley in London

Some of the world’s largest developing economies are set to face a fiscal crisis in the coming years unless they can roll back huge increases in public spending enacted in response to the Covid-19 pandemic, analysts have warned.

The economic downturn caused by the pandemic, combined with rising healthcare spending to tackle the spread of the virus, have caused budget deficits to soar in many countries. They will have to face the choice of risking public unrest by cutting back on spending, or negotiating with investors to restructure their debts.

On average, emerging and developing economies have announced support packages worth 5.4 per cent of gross domestic product according to figures published by the World Bank last month; in some countries — including India, Malaysia, Poland, Qatar, South Africa and Thailand — pandemic-related public spending has topped 10 per cent of GDP.

Tourism-dependent economies and big commodity producers are particularly vulnerable, the World Bank said, warning that across emerging and developing economies government debt has hit a record 51 per cent of GDP and many countries which previously ran surpluses have moved into deficit in recent years, leaving limited room for further spending.

As a result of the strains on public finances, as many as 37 per cent of the bonds in the benchmark JPMorgan index of emerging market sovereign external debt could be at risk of default in the next year or so, according to Adam Wolfe of Absolute Strategy Research.

Read the full article here.

Matthew Rocco 7/20/2020, 9:21:06 PM

Trump endorses mask-wearing as ‘patriotic’

Donald Trump backed mask-wearing as “patriotic”, as federal officials step up efforts to encourage Americans to don face coverings in public.

“We are United in our effort to defeat the Invisible China Virus, and many people say that it is Patriotic to wear a face mask when you can’t socially distance. There is nobody more Patriotic than me, your favorite President!” Mr Trump wrote in tweet, which was accompanied by a photo of the president wearing a mask.

Mr Trump’s remarks come amid efforts to combat the spread of coronavirus in parts of the US south and west that have seen an increase in Covid-19 infections. Federal health officials have also sought to promote the use of masks, after guidance issued early in the pandemic indicated that it wasn’t necessary for most Americans.

Some states have made masks a requirement in stores and other public areas. Mr Trump has said he does not support a national order on the issue and would leave it up to governors.

The president has not worn a mask during most of his public events, although he is regularly tested for coronavirus. Mr Trump was spotted wearing a mask inside a Ford plant during a visit in May. More recently, he was masked while visiting wounded soldiers at the Walter Reed military hospital this month.

“Everybody who is saying don’t wear a mask – all of sudden everybody’s got to wear a mask, and as you know masks cause problems, too,” Mr Trump said in an interview on Fox News Sunday. “With that being said, I’m a believer in masks. I think masks are good.”

Peter Wells 7/20/2020, 9:27:58 PM

Southwest Airlines says nearly 4,400 emploees agree to severance packages

Claire Bushey in Chicago

More than a quarter of Southwest Airlines’ workforce has volunteered to take a buyout or extended leave as the company scales back in the face of diminished demand.

Nearly 4,400 employees agreed to take a severance package, while about 12,500 agreed to take voluntary extended leave, chief executive Gary Kelly said in a message to employees on Monday.

Southwest has 60,800 employees, so the buyouts will reduce the workforce by 7 per cent.

US airlines are preparing to reduce headcounts because Covid-19 collapsed demand for air travel. While US demand rebounded in May and June, it has since stalled.

The US Transportation Safety Administration reported that traffic for the week through July 16 was down 75 per cent compared with a year earlier. The previous week, it had only been down 72 per cent.

Rival airlines American and United have sent furlough warnings to tens of thousands of employees. About 17,000 employees at Delta will take early retirement, and furloughs remain a possibility.

Southwest’s lower cost structure and debt burden, as well as limited exposure to international routes, give it advantages over competitors.

Peter Wells 7/20/2020, 10:11:00 PM

EU leaders close to striking deal on €750bn Covid-19 recovery package

Sam Fleming, Jim Brunsden, Mehreen Khan in Brussels

EU leaders are closing to striking a deal on a landmark coronavirus recovery package that will involve the European Commission undertaking large-scale borrowing for the first time, as they attempt to relaunch the bloc’s recession-struck economies.

After days of at times bitter debate, EU leaders have hammered out the bulk of a €750bn package intended to fund post-pandemic reconstruction efforts in hard-hit parts of the EU, according to multiple people familiar with the talks.

Barring last minute hitches, it will centre on a €390bn programme of grants to economically weakened member states, a smaller sum than the €500bn package originally proposed by Berlin and Paris back in May. Alongside this, leaders are poised to sign off on the EU’s next seven-year, €1tn budget.

The deal, orchestrated by German chancellor Angela Merkel and European Council President Charles Michel, would be the fruit of marathon negotiations that have been under way in Brussels since Friday morning.

Peter Wells 7/20/2020, 11:15:05 PM

US new daily case tally eases below 60,000

The US reported its smallest increase in new coronavirus cases and deaths in a week as a number of hotspot states revealed numbers that had pulled back from recent highs.

A further 57,948 people in the US tested positive for coronavirus over the past 24 hours, according to Covid Tracking Project data, from nearly 64,000 on Sunday and about 19,300 fewer than the record jump on July 17.

Florida (10,347) had the biggest increase, reporting its sixth straight day of more than 10,000 cases, but down about one-third from its July 12 record of 15,300. California (6,846), Texas (7,404) had the next biggest increases, followed by a record jump of 3,186 in Louisiana.

Figures on Monday tend to be lower than other days of the week, owing to weekend delays in reporting.

While the overall increase in the US was below 60,000 for the first time in a week, 16 states reported single-day increases of more than 1,000 cases on Monday, according to Financial Times calculations using Covid Tracking Project data.

A further 365 people died from Covid-19 over the past day, compared with 523 on Sunday.

Florida (92) reported the highest number of fatalities on the day. Another 62 deaths in Texas pushed its total since the pandemic began past 4,000 for the first time, to 4,020.

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