European futures indicate equities to open higher
European stock futures were higher on Wednesday while gold extended its surge above $2,000 a troy ounce as investors monitored the progress of US talks on more economic stimulus.
Stoxx 600 futures rose 0.2 per cent while FTSE 100 ones gained 0.4 per cent, implying a positive start for the indexes. Futures however tipped Wall Street’s S&P 500 to fall 0.2 per cent when US trading begins, after closing Tuesday up 0.4 per cent.
In Asia-Pacific however equities have lost some fizz. Japan’s Topix index trimmed earlier losses to be little changed while Australia’s S&P/ASX 200 dropped 0.5 per cent. China’s CSI 300 of Shanghai- and Shenzhen-listed stocks was 0.1 per cent down, while Hong Kong’s Hang Seng added 0.3 per cent.
Congressional leaders and White House officials said on Tuesday they are far away from a deal on more economic stimulus.
Gold, viewed as a haven during times of uncertainty, accelerated its gains, with a 1.1 per cent push to $2,023.7 an ounce. The precious metal rose as high as $2,024.9 overnight.
The price of gold has climbed more than 30 per cent this year as weak corporate earnings fuelled concerns about the US economic recovery.
UK’s Metro Bank swings to loss as bad loan charges mount
Nicholas Megaw in London
Metro Bank fell to a £241m loss in the first half of the year as it became the latest lender forced to set aside hefty sums to deal with expected loan losses.
The bank, which is dealing with the first recession since it was established a decade ago, reported £112m of of expected credit losses, up from just £4.4m in the same period last year. The vast majority of the total – £97m – was due to changes in economic forecasts rather than actual customer defaults.
Government rescue schemes and programmes such as loan repayment holidays have so far kept customer default rates low, but banks are predicting a sharp increase later in the year as more businesses collapse and the unemployment rate rises.
However, the bank insisted the disruption caused by coronavirus had not derailed its turnround plans. Metro recently announced a four-year restructuring programme based on cutting costs and shifting its focus toward more profitable areas of lending, after a reporting error last year forced it to abandon its previous strategy of rapidly expanding its branch network and lending in the highly competitive mortgage market.
UK warehouse group Segro boosted by e-commerce and data centre boom
Coronavirus has boosted the logistics and warehousing sector, according to bellwether Segro, which announced on Wednesday that the value of its portfolio had increased during the crisis.
Segro, the UK’s largest listed property company by market capitalisation, said it was “clear that the structural trends that have been contributing to occupier demand for our space over recent years have strengthened as a result of the pandemic”.
“E-commerce penetration has accelerated markedly across all our markets, there is a renewed focus on the efficiency and resilience of supply chains, and the demand for data centre space is increasing as a result of the need for additional data storage to support remote working and video streaming services,” added the company.
Where owners of shops and offices have seen the value of their portfolios diminish as a result of uncertainty about the future of work and retail, Segro and others in the logistics and warehousing space have not.
The value of the company’s portfolio of UK and European warehousing and logistics sites increased by 0.7 per cent to £11.2bn over the six months to the end of June. Adjusted pre-tax profits were up 6.5 per cent, to £140.4m, compared with the same period of 2019.
Segro’s share price has risen during a time of intense strife in the broader property industry. It is up 7 per cent over the year to date, to £9.63 as of Tuesday’s close.
Segro raised £680m in June, which it intends to spend on new ”last-mile” delivery sites across the UK and continental Europe.
Price surge puts ETF among world’s biggest gold owners
Robin Wigglesworth in Oslo
An exchange traded fund has become one of the world’s biggest owners of gold, surpassing even the central banks of Japan and India, as investors have scrambled to buy the precious metal and pushed it to record highs.
SPDR Gold Shares, an ETF that owns physical bullion rather than just financial derivatives, has hoovered up gold this year as investors seeking price gains or a haven asset channel more money into the fund.
Enthusiasm for the metal is being driven by some investors who fret that extraordinary moves by central banks to dampen the economic impact of coronavirus could ultimately ignite long-dormant inflationary pressures.
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Palestinian leaders grapple with Covid-19’s economic fallout
Mehul Srivastava in Ramallah
As the coronavirus pandemic wreaked havoc on the world’s economy, Azzam Shawwa watched with envy as central bankers across the globe deployed their full arsenal of tools to support their nations through it.
But as the governor of the Palestine Monetary Authority, Mr Shawwa had few options. The best he could do was cobble together a $300m fund to offer struggling businesses loans at below-market interest rates. He also asked banks to give borrowers a four-month repayment holiday and allow some Palestinians to overdraw their accounts. Then, his ammunition ran out.
Mr Shawwa’s travails underscore the challenges that Palestinian authorities are grappling with as they try to support their battered economy — as well as the struggle they face in their fight to break the chain of infection.
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Second member of Modi cabinet tests positive
Amy Kazmin in New Delhi
India’s petroleum minister, Dharmendra Pradhan, has become the second member of Prime Minister Narendra Modi’s cabinet to be sent to hospital with coronavirus, as the pathogen spreads through the senior leadership of the ruling Bharatiya Janata party.
Mr Pradhan, pictured, was one of among 51,000 people in India to test positive on Tuesday, bringing the country’s total confirmed infections to 1.9m, the third-highest burden in the world, after the US and Brazil. Of those known to be infected, more than 39,800 have died.
The virus now appears to be circulating widely among India’s political class, particularly members of the ruling BJP. Home minister Amit Shah, Mr Modi’s most trusted lieutenant and the second-most powerful man in the country, was admitted to hospital over the weekend after testing positive for the virus.
The chief ministers of the states of Karnataka and Madhya Pradesh – both ruled by the BJP – have also both been hospitalised with the virus, as has Karnataka’s opposition leader.
In Uttar Pradesh — another BJP stronghold — a member of the state cabinet died at the weekend; another state cabinet minister is infected, and the BJP state chief has also tested positive.
Mr Modi will be spending time at close quarters with Uttar Pradesh’s chief minister Yogi Adityanath on Wednesday, as the two men preside over grand ceremonies for the ground-breaking of a temple dedicated to Lord Ram on the site of a razed temple in the small city of Ayodhya.
UK broadcasters lose ground to streaming services
Alex Barker in London
Britain’s BBC and ITV broadcasting networks are losing ground to big US streaming services post-lockdown, with new viewers sticking with Disney+, Amazon and Netflix.
The annual report on viewing habits by Ofcom, the UK’s media regulator, noted the dramatic inroads made by streaming services since the coronavirus crisis, with sign-ups rising by 12m and overall viewing time doubling.
The accelerated shift to online viewing was particularly marked with younger people. Under 34s watched almost six-and-a-half hours of audiovisual content — a more than 40 per cent increase during lockdown — including two hours of streamed content every day.
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Alibaba healthcare unit to pile $1bn into ecommerce
Primrose Riordan in Hong Kong
Alibaba’s healthcare arm said it would use the proceeds of a more than $1bn follow-on share sale to develop its ecommerce offering, as it seeks to capitalise on the rising popularity of digital services due to coronavirus.
Hong Kong-listed Alibaba Health Information Technology’s sold 498.7m new shares at HK$20.05 (US$2.59) each, or an 8 per cent discount to Tuesday’s HK$21.80 closing price.
“Online healthcare consultation services have had a significant positive social impact during the Covid-19 pandemic,” the company said in a statement.
“The net proceeds of the placing will provide further flexibility … and allow it to have access to and compete in new areas in the internet healthcare industry,” the statement added.
Credit Suisse and Citibank acted as placing agents.
UK start-ups face £15bn pandemic funds shortfall
Andy Bounds in Huddersfield and Daniel Thomas in London
UK start-ups face a cash shortage of up to £15bn this year after investor funding fell away during the coronavirus pandemic, with companies outside London notably struggling for financial support, in what will be a blow to the government’s efforts to boost underperforming regions.
An annual report into so-called growth capital — money needed to support the UK’s fast-growing businesses — found that the funding shortfall for start-ups has doubled from about £7.5bn in 2019 because of the Covid-19 crisis.
The report by the ScaleUp Institute, a think-tank, and Innovate Finance, which represents the interests of the non-bank lending sector, comes as the government starts work on how to address the vast equity needs of companies that have accumulated large debts during the pandemic.
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China resumes issuing visas to some South Koreans
Song Jung-a in Seoul
China resumed visa issuance for South Korean students and workers on Wednesday to boost bilateral exchanges as its neighbour largely contained the coronavirus pandemic.
South Korea is the first country for which China eased entry restrictions after it banned foreign arrivals at the end of March amid the pandemic.
The move comes as South Korea has brought the virus outbreak under control with aggressive testing, contact-tracing and isolation tactics.
Late last month, China agreed to resume visa issuance for South Korean students studying or planning to study in China, employees hired to work in the country and those with residence permits. But they have to submit health certificates that show they tested negative for coronavirus.
The move comes after Seoul and Beijing agreed in April to run a “fast-track” entry system for businesspeople in an effort to minimise economic fallout from Covid-19.
South Korea will also begin to issue visas for Chinese in a similar way. The two countries are also in talks to increase bilateral flights to meet growing demand.
Covid-19 delays prison for ex-Google self-driving car chief
Anthony Levandowski, co-founder of Google’s self-driving car project, has been sentenced to 18 months in prison for stealing trade secrets and allegedly using them to help build a rival driverless programme at Uber.
Mr Levandowski, who had pleaded guilty to one of the 33 counts against him in March, will not go to prison right away because of coronavirus concerns. He has previously called prison time a “death sentence” because of Covid-19, after prosecutors had earlier recommended a sentence of 24-30 months.
Judge William Alsup has ordered him to be under house arrest until his sentence can begin, describing his actions as “the biggest trade secret crime I have ever seen”.
Mr Levandowski is suing Uber for $4bn.
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US CDC warns of parallel surge of children’s disease
The US Centers for Disease Control and Prevention on Tuesday warned that public health systems battling the coronavirus pandemic are likely to face another challenge from a life-threatening illness affecting children.
Acute flaccid myelitis, a serious paralytic condition affecting mostly children, is due for a return to the US in 2020 as enterovirus d68, which causes AFM, tends towards a two-year cycle.
“This means it will be circulating at the same time as flu and other infectious diseases including Covid-19 and could be another outbreak for clinicians, parents, and children to deal with,” said CDC director Robert Redfield.
“AFM affects the nervous system, specifically the area of the spinal cord called the grey matter,” he said. “Most patients develop sudden arm or leg weakness.”
Dr Redfield said AFM can progress quickly and patients can become paralysed over the course of hours or days and require a ventilator to help them breathe. “Some patients will be permanently disabled,” he added.
CDC data indicate the US experienced its worst outbreak in 2018, with 238 cases in 42 states. “Most cases were in young children,” said Tom Clark, a paediatrician and deputy director of CDC’s viral diseases division. “The average age was five years.”
Treasury yields plumb new depths as bond investors fret
Colby Smith in New York
US Treasury yields closed at new lows on Tuesday as anxious bond investors continued to drive a “relentless rally” in government debt that stood in stark contrast to America’s much more optimistic equity market.
The yield on the 10-year Treasury note dropped 0.05 percentage points to a record low 0.52 per cent, according to the US Treasury department’s daily closing calculation.
The debt benchmark has only once briefly fallen below that number in intraday trading at the height of the coronavirus crisis. On March 9, the 10-year yield plunged to 0.31 per cent before rising again.
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Australian state reports record Covid-19 deaths and new cases
Australia’s state of Victoria reported its highest one-day tally of both new Covid-19 cases and deaths a day after it introduced higher fines for people who break isolation orders.
Daniel Andrews, Victoria’s premier, said the state had found 725 new coronavirus cases in the past 24 hours, and 15 deaths.
The new fatalities take Victoria’s total from the pandemic to 162.
Of those deaths reported on Wednesday, 12 were linked to care homes for the elderly, which have become a focus of public health efforts in the state.
Victoria has tightened its lockdown on Melbourne after the virus continued to spread.
Essential workers will have to carry a permit issued by their employers and photo identification when traveling to and from work starting from Thursday.
Mr Andrews asked those who were not following the coronavirus restrictions in Melbourne to change their behaviour and said those who are sticking to the rules were “amazing”.
Eighth Bolsonaro cabinet member tests positive
Andres Schipani in Brasília
Another minister in the government of Brazilian President Jair Bolsonaro tested positive for coronavirus on Tuesday, bringing the tally to eight as infections continue to rise in the country suffering from the world’s second-worst coronavirus crisis after the US.
Secretary of the Presidency Jorge Oliveira said in a tweet that he had quarantined himself on Tuesday after testing positive for Covid-19. “I have mild symptoms and follow up under medical supervision”, he wrote.
The news of his infection came less than a week after Brazil’s first lady, Michelle Bolsonaro and the country’s science minister, Marcos Pontes, also tested positive.
According to the government, 178 civil servants working at the Brazilian presidency office have tested positive through July 31.
“Captain Corona”, as detractors call Mr Bolsonaro, who is a former army captain, has repeatedly played down the seriousness of the pandemic despite having tested positive for the virus himself. He claimed to have recovered in late July.
With 51,603 new cases and 1,154 deaths in the past day, on Tuesday evening Latin America’s largest country confirmed more than 2.8m infections and 95,819 fatalities since the pandemic began.
Wynn Macau shares dip as pandemic hits casinos
Shares in Wynn Macau dipped in Hong Kong on Wednesday after its parent company reported an almost $640m loss in the second quarter as the pandemic hit casinos.
Wynn Macau shares slipped 2 per cent after Wynn Resorts reported the $637.6m net loss in the three months to the end of June, from a $94.6m profit in the same period last year.
Wynn Macau reported a $351.6m loss down from a $169m profit a year earlier.
Revenue from Wynn Resorts’ casino business fell by more than 99 per cent to $9.4m during the period. Casino revenue in Macau was negative in the second quarter, from $1bn a year earlier.
Casinos in Macau were forced to close for two weeks in February to limit the spread of the virus in the Chinese territory. But the gambling hub has struggled to recover owing to strict quarantine restrictions on its core mainland Chinese clientele.
Gaming revenue in Macau for the seven months of the year was down almost 80 per cent compared with the same period in 2019.
Casinos have reopened with limits on the number of people per table and with temperature checks, Wynn said.
“In Macau, the authorities have begun to gradually and thoughtfully ease some visitation restrictions, and we are confident the market will benefit from the return of the Chinese consumer as we move through the back half of 2020,” said Matt Maddox, Wynn Resorts chief executive.
Restrictions on travel between neighbouring Guangdong and Macau were eased in July, allowing those who test negative for the virus to cross the boundary.
US to send first cabinet member to Taiwan in 6 years
The US secretary for health and human services, Alex Azar, would visit Taiwan in the next few days to congratulate its government on its response to the coronavirus pandemic, Washington announced on Tuesday.
The department said in a statement that Mr Azar would be the first US cabinet member to visit Taiwan in six years, and the highest level official visitor from Washington since 1979.
“Taiwan has been a model of transparency and co-operation in global health during the Covid-19 pandemic and long before it,” Mr Azar said in the statement.
Mr Azar “will meet his Taiwan counterparts, Covid-19 responders and experts, and other Taiwan partners to discuss the Covid-19 response, global health, the US-Taiwan partnership, and Taiwan’s role as a reliable global supplier of medical equipment and critical technology”, the statement said.
Covid-19 to trigger M&A and succession shake-ups, says Mizuho chief
Leo Lewis in Tokyo
The president and chief executive of Mizuho bank has forecast a broad shake-up of Japan’s business world as Covid-19 accelerates succession plans and triggers a wave of dealmaking.
In an interview, Tatsufumi Sakai said Japanese companies could not afford to wait patiently for a return to pre-pandemic conditions, warning that instead they should adapt businesses and financial structures to a “with-corona” era that will probably stretch into years.
Over that period, he added, the modest liquidity issues of the early months of the crisis risk deepening into solvency problems for many companies, increasing the need for capital and accelerating trends that many Japanese companies have been slow to address.
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ADB approves $1.5bn loan to help Thailand fight virus
The Asian Development Bank on Tuesday said it would provide a $1.5bn loan to Thailand to help the kingdom fight the coronavirus pandemic.
The Manila-based multilateral lender said that although Thailand has one of the more developed healthcare systems in south-east Asia, the country remains “highly vulnerable” to the pandemic.
“Potential surges in Covid-19 cases could overwhelm the system, resulting in constraints in human resources and medical equipment,” ADB said in a statement.
The loan would help fund the government’s relief packages, the bank said, which are aimed at better preparing the healthcare system against possible future waves.
Some money would support small and medium-sized enterprises, ADB added, specifying sectors most affected by the outbreak such as tourism and manufacturing.
The bank has forecast Thailand’s economy to contract by 6.5 per cent in 2020, a sharp downgrade from its December 2019 projection of 3 per cent growth.
The ADB said it feared an economic crisis in Thailand would have repercussions in Cambodia, Laos, Myanmar and Vietnam.
In addition to economic havoc caused by Covid-19, the kingdom was hit this week by flooding in its north-eastern provinces, pictured.
US stimulus negotiations ‘far away’ from a deal
Lauren Fedor in Washington
Congressional leaders and White House officials warned on Tuesday that they were still far away from a deal on more economic stimulus for the pandemic-ravaged US economy.
Nancy Pelosi and Chuck Schumer, the top Democrats in the House and Senate, respectively, have met regularly with Mark Meadows, White House chief of staff, and Steven Mnuchin, Treasury secretary, since emergency unemployment aid ran out last week.
After talks on Capitol Hill on Tuesday, Mr Mnuchin told reporters that negotiators had agreed to work “around the clock” to “reach an overall agreement” by the end of the week so that a bill could be drawn up and approved by the Democratic-controlled House and Republican-held Senate next week.
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Hong Kong PMI dips as Covid-19 cases climb
Business activity in Hong Kong was hit in July as the government imposed social-distancing measures in a bid to combat a new wave of coronavirus infections, according to a private survey.
The IHS Markit Hong Kong purchasing managers’ index fell to 44.5 in July after a slowing in the number of new cases and lifting of restrictions saw the index climb to 49.6 in June. A reading below 50 marks a fall in activity compared with the previous month.
“Latest PMI data pointed to a marked deterioration in private sector conditions across Hong Kong, representing a setback to the economic recovery,” said Bernard Aw, principal economist at IHS Markit. “The tightening of Covid-19-related measures in response to a rise in new infections dealt a new blow to the economy”
Despite the deterioration, the July reading was still above that seen during February to April during the worst of the pandemic.
Companies surveyed said business activity shrank sharply and new orders fell as the city experienced a third wave of coronavirus infections forcing the government to close businesses deemed as high-risk. Restaurants are limited to take-out only after 6pm and bars that do not serve food are shut.
The third wave of infections piles pressure on an already delicate economy. Hong Kong entered a recession in 2019 on the effects of the US-China trade war and social unrest.
Employment levels remained “broadly unchanged”, said Mr Aw, but “the concern is that further severe deteriorations in business conditions well see a new round of job losses”.
UK panel blames Covid-19 spread on lack of early quarantine
Laura Hughes in London
The British government’s decision to maintain loose border controls in the early months of the pandemic “accelerated” the spread of coronavirus, parliamentarians have concluded in a new report.
The House of Commons home affairs select committee said on Wednesday that the government’s decision not to impose quarantine rules increased the number of “imported” infections and saw “many more” people contract the virus.
As the pandemic spread, Britain remained in a small club of nations that failed to match the tighter borders and stringent quarantine rules on arriving travellers that had become common in other countries.
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Virgin Australia lays off a third of workforce as Covid-19 bites
Virgin Australia said on Wednesday it would lay off 3,000 employees — about a third of its workforce — and shed its long-haul jets as part of a restructuring under new owner Bain Capital.
The airline, which went into voluntary administration, a form of creditor protection, in April owing A$6.8bn (US$4.9bn), said the moves would make it a “stronger, more profitable and competitive” carrier.
In a statement issued on Wednesday, the airline said the moves were a necessary “reduction in cost base to meet sector uncertainty and Covid-19 market conditions”.
Virgin would let go of its Boeing 777 and Airbus A330 long-haul aircraft, its short-haul turboprops and short-to-medium-haul Airbus A320 planes, to become an all Boeing 737 fleet.
The budget Tigerair brand would cease to operate, the airline said.
“Our aviation and tourism sectors face continued uncertainty in the face of Covid-19 with many Australian airports recording passenger numbers less than 3 per cent of last year and ongoing changes to government travel restrictions,” said Virgin Australia group chief executive Paul Scurrah.
The company said customers would retain “travel credits post administration with validity dates extended for bookings made prior to administration”.
Asia-Pacific stocks open lower as gold hits new high
Stocks in Asia-Pacific were broadly lower and gold touched a new record high as concerns swirled over the post-pandemic recovery.
Japan’s Topix dropped 0.6 per cent, the S&P/ASX 200 in Australia shed 0.3 per cent and the Kospi in Seoul added 0.3 per cent. S&P 500 futures dipped 0.1 per cent.
In Asia on Wednesday, China’s Caixin services purchasing managers’ index will provide pointers on the state of the country’s economy outside manufacturing, months after lockdowns were lifted.
Investors are awaiting details of the next US recovery package, which has been stalled by disagreements over the size of extra unemployment benefit payments.
Economists have warned that a failure to reach an agreement would deal a blow to the global economic recovery.
Gold, which is seen as a haven, surged above $2,000 an ounce to a record high on Tuesday. The metal was up 0.5 per cent at a new record of $2,029 in early trading in Asia.
US Treasury yields hit record lows on Tuesday amid concerns over the economic recovery from the pandemic. The 10-year yield was steady at 0.5151 in morning Asia trading.
Overnight on Wall Street, the S&P 500 and the Nasdaq Composite added 0.4 per cent with the latter closing at a new record high.
Novavax reports ‘robust response’ to vaccine candidate
Novavax, one of the biotech companies that has secured US government funding to accelerate the development of a coronavirus vaccine candidate, revealed that its potential treatment showed promising results in an early-stage trial.
The company’s shares, which have surged more than 3,000 per cent so far this year, swung wildly in after market trade on Tuesday as investors perused the data from its trial.
Maryland-based Novavax said participants in a phase-one trial who took its potential Covid-19 vaccine produced neutralising antibodies, which scientists believe are necessary to help build immunity to the disease.
The vaccine candidates were “generally well-tolerated and elicited robust antibody responses numerically superior” to that from serum obtained from people who have recovered from the disease, the company said in a statement.
The stock, which finished the regular trading session up 0.8 per cent to $157.17, swung between a loss of 30.6 per cent and a gain of 13.9 per cent in after-hours trading, before steadying with a gain of about 9 per cent.
Novavax has yet to have any vaccines approved, but in early July signed a deal worth up to $1.6bn with the US federal government’s vaccine programme, known as Operation Warp Speed, to accelerate development of a coronavirus cure.
US president Donald Trump, pictured, last month visited a North Carolina laboratory where some components of the Novavax vaccine candidate are produced.
The company hopes to use the money to fund a larger phase-three trial, of up to 30,000 participants, later in the year.
The Novavax agreement was, at the time, the largest deal that had been announced in Operation Warp Speed, topping a partnership with AstraZeneca worth up to $1.2bn.
The vaccine programme includes other big pharmaceutical companies such as Johnson & Johnson, Pfizer and Merck, as well as biotechs such as Moderna and Emergent BioSolutions.
Novavax shares have gained about 3,850 per cent so far in 2020.
Olympics chief strikes defiant tone over Covid-19 delay
Robin Harding and Leo Lewis in Tokyo
The 2021 Olympic Games will be held “with corona”, according to the chief executive of the Tokyo organising committee, even as sceptics question whether the games will ever happen.
Toshiro Muto struck a defiant tone in an interview with the Financial Times, asserting that the Olympics would take place even without a resolution to the Covid-19 crisis.
His comments come as the country deals with a struggling economy, record infection rates in Tokyo, closed borders and questions about the government’s management of the health crisis.
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US pandemic death toll returns to 1,000-plus level
Peter Wells in New York
The US saw the number of new coronavirus deaths jump back above 1,000 on Tuesday as Texas and Florida reported large increases in fatalities.
While daily deaths linger at levels previously seen in May, new Covid-19 cases on Tuesday hovered around 50,000 for the third day in a row, continuing a recent trend of new infections peeling back from record highs despite a rise in fatalities.
A further 1,176 people died from coronavirus, according to Covid Tracking Project, up from 519 on Monday. Over the past week, the US has reported an average of 1,049 fatalities a day.
Florida reported a further 247 deaths, 10 shy of its record from last week, while Texas had a further 245 deaths that was among its biggest since the pandemic began.
Over the past 24 hours, 51,568 people tested positive for coronavirus, up from 49,561 on Monday. The US has averaged almost 59,200 new cases a day over the past week, down from a record rate of nearly 66,900 two weeks ago.
Texas (9,167), Florida (5,446) and California (4,526) had the biggest single-day increases in new cases.
San Francisco delays fee payments by hard-hit businesses
San Francisco plans to delay collection of about $63m in fees due between now and March 2021 to help small businesses such as restaurants ravaged by the coronavirus pandemic.
The city said on Tuesday it would defer business registration and licensing fees paid by restaurants and other food businesses, bars, convenience stores, small retailers, hotels and tour operators.
“Businesses in San Francisco continue to struggle with a loss of revenue and unfortunately we know that the Covid-19 pandemic isn’t going away any time soon,” said London Breed, the city’s mayor.
Ms Breed said when the decision to defer some city fees was originally made, the city was counting on federal assistance to make up for the shortfall, “but the lack of a coordinated federal response to the pandemic has only exacerbated the situation”.
The city said it would defer payments of about $49m in registration fees and $14m in licensing fees.
Pandemic fuels the fires of European separatism
European Independence movements are on the offensive but suffer from disunity, writes Jonathan Parker, PhD candidate at the University of Sussex.
In the Spanish region of Catalonia, pictured, an early election has loomed since January. The nationalist Republican Left of Catalonia party had been exploring a dialogue with the Socialist-led Madrid government of Pedro Sánchez, but this drove a wedge between the Left and the more hardline Junts per Catalunya alliance.
In Belgium, the pandemic has radicalised territorial conflicts. Policymaking is rendered difficult by the gulf between a right-leaning, increasingly secessionist Flanders and a leftist Wallonia that is not interested in more decentralisation.
For the UK, the pandemic has been a story of steady divergence between the central government in London and the authorities in Scotland, Wales and Northern Ireland. Next year promises to be one of the most consequential in Scotland’s modern history as it holds elections with independence on the agenda.
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N Korea illegal coal exports rise as economy plunges
Edward White in Wellington
North Korea has increased its illegal smuggling of coal, suggests new satellite imagery, as dictator Kim Jong Un faces the country’s worst economic downturn on record.
While North Korean authorities have not confirmed a single case of coronavirus, internal travel restrictions have been tightened in recent weeks. International experts are sceptical about the truth of Pyongyang’s claims.
The country is heading for an 8.5 per cent contraction in annual gross domestic product this year, which would be its worst economic downturn on record, according to Fitch Solutions.
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Australia relies on quarantine ‘trust’, says senior doctor
One of Australia’s most senior physicians acknowledged on Tuesday that the quarantine system was still based on trust, despite a huge surge of new cases in Melbourne, the country’s second largest city.
Nick Coatsworth, a deputy chief medical officer, said in an interview that controlling the new surge relied on voluntary self-isolation, including by those using the Melbourne-Sydney route, one of the world’s busiest city-to-city air corridors.
“There are reasons why people still need to travel and, by and large, they’re dealt with individually by state health officers,” Dr Coatsworth said. “So the amount of travel … has significantly decreased – so it’s far less of a risk.”
He acknowledged the system relied on people going into voluntary quarantine. “We are relying on the whole community – that’s what combating Covid-19 is all about.”
Dr Coatsworth told the Nine Network’s Today Show that people breaking quarantine rules risked a criminal record and jail time. “So anybody who’s contemplating that sort of thing, you just got to ask yourself, is it really worth it both for you personally and for the whole of the Australian community?”
NZ finds half of symptomatic patients not tested
A study in New Zealand has found that almost half of people who reported having symptoms of Covid-19 infection had not taken a test.
The health ministry said on Tuesday that a survey of 800 New Zealanders, conducted in late July, found that just under 50 per cent of those with symptoms had decided not to get tested.
Three-quarters of those said they did not think they had Covid-19, the survey found.
The survey also showed that the majority of respondents — 65 per cent of adults and 80 per cent of children — stayed home when they had such symptoms.
On Tuesday, the ministry also published its recommendations to boost the sector charged with caring for the aged, in which most deaths from coronavirus occurred. Director-general of health Ashley Bloomfield said a national outbreak management policy would be developed to include the sector.
Scottish pupils’ exam scores downgraded because of pandemic
Bethan Staton in London
Scottish secondary school pupils have had nearly a quarter of their results downgraded under a new marking system that was adopted after exams were cancelled because of the pandemic.
Results for National 5s, Scottish Highers and Advanced Highers released on Tuesday showed that the Scottish Qualifications Authority, the regulator, had adjusted 133,000 entries, more than one quarter of all results, from the grades predicted by teachers. Most of them, 93 per cent, were adjusted down.
The results expose concerns over the fairness of the system that replaced cancelled exams with predicted grades based on mock exams, coursework, and teacher assessment. These were then moderated by the SQA, based on the past performance of each school.
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California cases slow as deaths surge in Texas
Peter Wells in New York
California reported fewer than 5,000 new cases for the second day running, continuing signs that the spread of the coronavirus may be starting to slow in the most populous US state.
But Texas reported one of its biggest daily increases in deaths since the pandemic began, and Florida also had one of its biggest one-day jumps in Covid-19 fatalities on record.
A further 4,526 people tested positive in California over the past 24 hours, the state government revealed on Tuesday, down from 4,752 a day earlier. These are the smallest daily increases since late June.
Deaths rose by 113 to 9,501 overall, from an increase of 32 reported on Monday. Over the past week, an average of 140 people a day have died, a record rate for the state.
In Texas, 245 more people died from the virus, the state’s health department revealed. On Monday, 179 fatalities had been reported, but this essentially spanned two days because the state’s Covid-19 dashboard underwent a scheduled upgrade on Sunday.
Over the past week, health officials in Texas have made several changes to how they categorise new cases and new fatalities, leading to some large day-to-day swings between figures. The state has averaged about 198 deaths a day over the past seven days, though.
A further 9,167 people tested positive over the past 24 hours, officials said, compared with a combined 11,529 for the previous two days.
Florida’s health department revealed on Tuesday morning that 247 Florida residents and non-residents had died from coronavirus, up from 73 yesterday.
The latest data push the seven-day average of deaths there to a record of about 184, according to Financial Times analysis of Covid Tracking Project data.
That continues a recent trend for Florida — and other hotspots such as California and Texas. They have reported record daily jumps in fatalities, but alongside new infections retreating from the peak levels of July.
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US stocks rose for a third day running, as investors continued to measure better-than-expected corporate earnings against dire forecasts because of the pandemic. The S&P 500 added 0.4 per cent, led higher by energy. The tech-heavy Nasdaq also rose about 0.4 per cent to a fresh record. The Dow Jones Industrial Average rose 0.6 per cent. Gold jumped above $2,000 for the first time.
Ireland has blocked the reopening of about 3,500 pubs for a second time because of mounting anxiety that rising infections could threaten plans to reopen schools later this month. Schools shut in mid-March, days before the pub sector closed with the loss of 50,000 jobs. Prime minister Micheál Martin deferred the reopening next Monday of non-food pubs by another three weeks.
Sotiris Tsiodras, Greece’s chief epidemiologist, has called for “increased vigilance” after health authorities reported the highest single-day number of cases since April 22, when the country was under a strict lockdown. Authorities said 121 confirmed cases were recorded on Tuesday, including clusters linked to a meat processing plant and several wedding receptions across northern Greece.
Germany has partially lifted its travel warning for Turkey, imposed at the height of the pandemic. A government statement said the warning would be lifted for Antalya, Izmir, Aydin and Mugla, which had a “low rate of infection” — about five per 100,000 people in seven days. German authorities said if the situation deteriorates, the travel warning for the four regions might be reintroduced.
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PizzaExpress has put its UK business up for sale and warned of 1,100 job cuts as it takes drastic action to stave off collapse as a result of the crisis. The 55-year-old pizza chain will close 67 restaurants — 15 per cent of its UK estate — and offload its Chinese business. The company announced a fresh £144m cash injection to refinance debt and fund the reopening of its 449 UK restaurants.
EasyJet generated £7m revenue over a three-month period when few people were flying, as governments imposed strict lockdowns and grounded planes in their efforts to staunch the spread of the pandemic. But the low-cost airline has improved its previously dire expectations as it predicts a smaller loss in the fourth quarter compared with the third.
Second-quarter revenues jumped 69 per cent at Beyond Meat, the US plant-based meat group, as sales increases at retailers more than offset the fall in fast-food chains and restaurants because of the pandemic. Beyond Meat said revenues for the three months to June totalled $113.3m after its retail sales almost tripled to $90m while food service revenues fell 61 per cent to $6.5m.
Disney took a $3.5bn hit to operating income at its theme parks, as the pandemic ground some of the entertainment giant’s most lucrative businesses to a halt. The company faced three months in which Covid-19 bruised nearly all of its businesses apart from streaming. Disney has depended on its theme parks and blockbuster movies to deliver profits even as traditional media has declined.