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Updated at 7/2/2020, 1:35:07 PM BST

US new infections are double the number recorded two weeks ago

The US has reported more than 42,000 new cases, nearly 15,000 more than Sunday last week and double the number reported on Sundays over the previous month.

The five highest totals for new infections have been reported over the past five days, according to the Covid Tracking Project, and that is despite the fact that numbers reported on Sunday tend to be lower than during the week due to a lag in gathering the data.

The 42,161 new cases reported on Sunday bring the US total to more than 2,540,983. There have been 119,429 deaths from Covid-19 recorded in the country so far. Experts say they would expect a lag of a few weeks between a rise in positive tests and a rise in the death rate.

In the south, the percentage of tests coming back positive has roughly doubled in the last month, the Covid Tracking Project said on Twitter.

The southern states were among the first to reopen following lockdowns imposed to prevent the spread of the disease.

In the south and west, the number of new cases reported per day has doubled since June 15, according to the Covid Tracking Project.

More than 10m cases have now been reported globally, according to Johns Hopkins University, of which a quarter are in the US.

South Korea brings in new virus response levels as cases rise

Edward White in Wellington

South Korea has announced a new classification system for social distancing during the coronavirus pandemic as locally transmitted cases numbers continue to creep higher.

The country reported 62 new infections on Sunday, bringing the total caseload to 12,715, with new clusters of infections linked to churches worrying health officials.

The Korea Centers for Disease Control said the country remained at level one of a new three-level system, where the health situation was deemed manageable — although slightly tougher distancing rules remain in place in Seoul, the capital of 10m which has seen the most outbreaks over the past three months.

If the daily infection rate remains between 50-100 for two weeks straight, level two will be implemented, meaning a ban on all indoor gatherings of more than 50 people and outdoor gatherings of 100. At level three, which will be instituted if daily infections rise well above 100, in-person schooling will be postponed.

At the current level-one alert, some spectators will be allowed to resume attending sports events.

Asia-Pacific stocks fall as US coronavirus cases climb

Shares in Asia-Pacific markets fell in early trading on Monday amid concerns over the effects of rising US coronavirus cases on the economic recovery and as the number of infections worldwide climbed above 10m.

Japan’s Topix was down 1.4 per cent, the Kospi in South Korea fell 1.5 per cent and the S&P/ASX 200 slipped 0.9 per cent in Australia.

In the region, there was good news from China after Sunday’s announcement that industrial profit turned positive in May as economic activity recovered following shutdowns to control the spread of coronavirus.

The falls on Monday in Asia came after the S&P 500 closed down 2.4 per cent on Friday following decisions in Texas and Florida to roll back measures to reopen their economies following an acceleration in the number of new coronavirus cases.

The US health secretary warned on Sunday that the window of opportunity to control the spread of coronavirus across the country was closing following a run of record new infections in in the South and West.

Moves by the worst-affected states to roll back or pause reopening plans pushed down oil prices. In early trading on Monday, oil prices slipped with Brent crude down 1.5 per cent at $40.40 a barrel and West Texas Intermediate, the US marker, down 1.6 per cent at $37.86.

Algeria’s rulers consolidate grip as economy falters

Heba Saleh in Cairo

When people started dying of Covid-19 in Algeria in March, protesters called a halt to the weekly demonstrations that had rocked the country for more than a year and toppled President Abdelaziz Bouteflika.

With the streets cleared of protesters demanding democratic change, the military-backed authorities seized the opportunity to crack down on dissent, arresting dozens of opposition activists and questioning hundreds more about their Facebook posts.

“They want to rebuild the wall of fear to stop the protests from coming back after the virus has ended,” said Zaki Hannache, a human rights activist.

The coronavirus threat may be receding, with the death toll at fewer than 1,000 people, but the anger against the government is still raw, and the disease has exacerbated the economic malaise that fuelled the unrest.

Read more here

Beijing reports 7 new coronavirus cases

Beijing reported seven new cases of Covid-19 to the end of Sunday as the Chinese capital acts swiftly to deal with an outbreak that emerged more than two weeks ago.

The city was hit by a new wave of cases in early June after infections were discovered at a wholesale food market. The new cases take the total for the outbreak to 318.

Restrictions to limit the spread of the virus were reimposed on parts of the city of more than 20m following the discovery of the outbreak. Beijing had recorded almost two months of no new infections before the cases were reported this month.

One person was found to test positive but showed no symptoms, taking the number of asymptomatic cases to 26. China does not include asymptomatic cases in its official tally.

News you might have missed

Chesapeake Energy, a pioneer of the American shale revolution, declared bankruptcy on Sunday, the biggest US producer to have succumbed in an oil-price crash that is ravaging the country’s energy sector.

The US health secretary warned on Sunday that the window of opportunity to halt the spread of coronavirus across America was closing after a clutch of southern states reported record increases in cases.

Europe’s economic recovery from the coronavirus pandemic is well under way, according to sentiment indicators, high-frequency measures and hard data — but activity remains far below normal levels, suggesting that the recovery from recession will be a struggle.

The FT View: The pandemic is entering a new phase in which, until there is a treatment or vaccine, the world must learn to live with the virus.

Global stocks fall as US official warns over spread of coronavirus in America

Hudson Lockett in Hong Kong

Global stocks fell as the worldwide death toll from coronavirus topped 500,000 and US officials warned that the window to halt the pandemic’s spread across America was closing.

In early morning trading on Monday, Japan’s Topix index and Australia’s S&P/ASX 200 both dropped 1.2 per cent while South Korea’s Kospi slipped 0.9 per cent. Hong Kong’s Hang Seng was down 0.6 per cent and China’s CSI 300 index of Shanghai and Shenzhen-listed stocks shed 0.4 per cent.

Those falls came after Alex Azar, US health and human services secretary, said on Sunday that Covid-19 cases were “surging” in the southern US after several of these states ended lockdowns early. He accused the Trump administration of being “in denial about the problem”.

Futures markets tipped Wall Street’s S&P 500 to gain 0.2 per cent when trading begins later on Monday. The FTSE 100 was set to fall 0.2 per cent.

Crude fell after Chesapeake Energy, a pioneer of the American shale revolution, declared bankruptcy following an oil price crash that has ravaged US producers. Analysts said the company’s Chapter 11 filing could prompt others in the shale sector to follow suit.

Brent crude, the international benchmark, fell 1 per cent to $40.63 a barrel while US marker West Texas Intermediate dropped 1.1 per cent to $38.05.

Tokyo infection rate rises to highest since state of emergency ended

Robin Harding in Tokyo

The number of coronavirus cases in Tokyo has risen to its highest level since a state of emergency was ended after local authorities announced 60 new infections on Sunday.

It is the largest number of new infections since May 4 and continues a rising trend over the last week that has raised fears of a second wave of Covid-19 in the Japanese capital.

Recent positive cases have been heavily concentrated among people in their 20s and 30s and many have been found after testing in nightlife areas. 31 out of the 60 new cases in Tokyo were found after intensive testing of staff in host and hostess clubs.

The number of deaths and critically ill patients in Japan continues to decline and the country is trying to restart international travel, initially with business trips to Thailand and Vietnam.

Olympus bets on post-Covid green shoots for medical devices

Kana Inagaki in Tokyo

Japanese technology group Olympus is beginning to see the unleashing of “pent-up demand” for tens of millions of surgical procedures that were cancelled during the coronavirus crisis, a resumption set to help revive the global medical equipment industry.

Hospitals around the world are facing a huge backlog of elective surgeries as people avoided visits to minimise risk of infection and to free up resources to treat Covid-19 patients.

With coronavirus cases now declining in some countries, doctors are cautiously resuming cancer treatments and procedures such as colonoscopies that are critical for early diagnosis.

“You don’t want colon cancer and other related conditions out there undiagnosed,” Ross Segan, Olympus’s chief medical officer, said in an interview. “The market knows that so in places around the world where we’ve gotten a good handle on the rate of Covid, we’re starting to see that [resumed]. There will be pent-up demand that will drive procedure volume.”

Read more here

Medical news round-up

A growing number of researchers think that diabetes does not just make people more vulnerable to the coronavirus, but that the virus might also trigger diabetes in some patients. Not only have a handful of patients spontaneously developed Type 1 diabetes, but there have been dozens of reports of people arriving in hospital with high levels of blood sugar and ketones — when the body doesn’t make enough insulin to break down sugar, it uses ketones as an alternative source of fuel. (Nature)

Individuals with a viral co-infection — that is, infected with the current coronavirus, Sars-Cov-2, as well as another virus, such as influenza — were more likely to require ICU support than those who were found to be infected only with Sars-Cov-2, according to a large study of children and adolescents published in The Lancet. The findings from 82 participating health-care institutions across 25 European countries have implications for the coming winter peak for seasonal flu when the incidence of influenza virus infections is set to increase. (The Lancet: Child and Adolescent Health)

A review of 54 studies found that antibody tests carried out one week after a patient first developed symptoms detected only 30 per cent of people who had Covid-19. Accuracy increased to 72 per cent at two weeks and to 94 per cent in the third week. The data in the studies mainly came from hospital patients, so the authors of the review noted it was unclear whether the tests were able to detect the lower antibody concentrations likely seen with milder and asymptomatic Covid-19. (BMJ)

The frequency of testing and speed of getting results matter more than the accuracy of the tests, according to research that has yet to receive peer review. The results demonstrate that effective surveillance, including time to first detection and outbreak control, depends largely on frequency of testing and the speed of reporting, and is only marginally improved by high test sensitivity, the authors state. (Medrxiv)

Australian authorities unnerved by surge in Melbourne cases

Jamie Smyth in Sydney

Australia is facing a “concerning” spike in coronavirus infections with 75 new cases reported in the state of Victoria on Monday, prompting authorities to warn they are “right on the edge of” being able to handle the outbreak.

"Obviously we are concerned by the increasing number and the upward trend and are monitoring the situation very closely,” said Jenny Mikakos, Victoria’s health minister.

The total number of cases in Victoria since the pandemic began now stands at almost 2,100 with double digit increases occurring every day for most of the past fortnight following the easing of some social-distancing restrictions.

The surge in cases is unnerving Australian officials, who have begun rolling back measures aimed at suppressing the spread of Covid-19 in order to kick-start economic recovery.

Australia has enjoyed success in limiting the spread of Covid-19 with several states reporting no new cases for more than a week. But the situation in Victoria, of which Melbourne is the state capital, poses a risk to plans to reopen state borders to tourism later this month.

Brett Sutton, Victoria’s chief health officer, said the state was right on the edge of being able to handle the recent Covid-19 outbreak, which has accelerated across several suburbs of Melbourne. He said authorities were considering recommending that people begin wearing masks on public transport and in other situations, where social distancing is not possible, and a return to a stricter lockdown is possible.

“It’s pretty clear wearing a mask might provide a bit more physical distance between you and others as they see you wearing it,” he said.

The surge in Victoria has complicated the return of Australian Rules Football, with the sport’s national body forced to rearrange fixtures due to new quarantine measures put in place by Queensland authorities for any teams that play sides from Victoria.

Queensland’s state government is due to announce whether to press ahead with plans to open its borders to travellers from other states on Tuesday.

Chinese coronavirus vaccine approved for use in military

Alice Woodhouse in Hong Kong and Wang Xueqiao in Shanghai

CanSino Biologics, a Chinese vaccine developer, said it had received approval for its coronavirus vaccine to be used by the country’s military following positive signs from clinical trials.

The company said its recombinant novel coronavirus vaccine (adenovirus type five vector) jointly developed with the Beijing Institute of Biotechnology, Academy of Military Medical Sciences, had been given drug approval by China’s central military commission. The approval is valid for one year.

CanSino’s vaccine has undergone phase one and phase-two trials in China. The results of the trials indicated that the vaccine has “potential to prevent diseases caused by Sars-Cov-2”, the virus that causes Covid-19, CanSino said in a statement.

The vaccine is currently limited to military use.

Almost 150 Covid-19 vaccines are being developed by scientists around the world. Seven vaccine candidates developed by Chinese companies are entering into the clinical trial stage in China.

Nissan’s chief tries to reassure shareholders after reporting $6bn loss

Kana Inagaki in Tokyo

Nissan’s chief executive has told investors that the carmaker has secured enough funding to survive collapsing sales caused by the coronavirus crisis as he promised to step down if he failed to achieve a turnround.

Makoto Uchida faced a near two-hour grilling by angry shareholders on Monday after the Japanese carmaker reported an annual net loss of ¥671bn ($6.3bn) and cancelled its fiscal second-half dividend.

“We have sufficient funds to address this crisis despite the deterioration in our automotive free cash flow,” Mr Uchida said, pointing to more than ¥2tn in unused credit lines and new loans the group had secured.

Still, most investors appeared unconvinced with one shareholder expressing concerns that the company’s performance was headed downhill despite a deep cost-cutting programme Nissan is implementing to plug its losses.

“If this situation lasts, I think Nissan will be extinct within two years,” the shareholder told Mr Uchida.

European stocks set to slip as coronavirus outbreak worsens

European equities are on course to fall as the coronavirus outbreak worsens in the Americas and US officials said the window to halt the pandemic’s spread in the country was closing.

Futures markets tipped London’s FTSE 100 to slip 1 per cent, after heavy losses in Asia-Pacific. Wall Street’s S&P 500 was set to drop 0.3 per cent when trading begins later on Monday.

The expected declines come after Alex Azar, US health and human services secretary, said on Sunday that Covid-19 cases were “surging” in the southern US where several states ended lockdowns early. The US has confirmed 2.5m cases and more than 125,000 deaths from the disease — a quarter of the 10m infections and half a million global fatalities, according to John Hopkins University.

Some investors are concerned that the rally in stocks since March based on hopes of a strong economic rebound from the pandemic may have gone too far.

Coronavirus round-up: US and Asia-Pacific regions report spikes

The coronavirus pandemic has worsened worldwide with the US recording nearly double the number of cases since two weeks ago while in the Asia-Pacific region China, Japan, South Korea and Australia have recorded fresh spikes in their infection rates.

In the US, which has a quarter of the worldwide 10m cases, more than 42,000 new infections were registered on Sunday, double the number recorded two weeks ago. In the south, which was among the first states to relax lockdown measures, and west, the number of new infections reported daily has doubled since June 15.

Japan has reported the highest infection rate in Tokyo since it ended a state of emergency and the largest case count since May 4.

Australia is facing a spike, with 75 new cases in the state of Victoria.

Beijing has taken the total for its second spike to 318. China has acted swiftly to tackle an outbreak that emerged more than a fortnight ago after infections were reported at a wholesale food market.

South Korea, where locally transmitted cases have risen, has created a classification system for social distancing. Its total case count has increased to 12,715. The country is at level one of a three-level system: the situation is considered manageable but Seoul, which has been the worst hit over the past three months, has imposed tougher distancing rules.

In the UK, which has been the most affected country in the world after the US and Brazil, the city of Leicester may face a localised lockdown after a rise in cases there. The UK has registered more than 43,000 coronavirus deaths. In Leicester, figures on June 16 showed about 25 per cent of the city’s 2,494 cases were reported in the past two weeks, the BBC said.

UK gilt issuance to exceed financial crisis peak

The UK is set to sell a record amount of government bonds this year to finance a massive spending binge aimed at reviving the crisis-hit economy. 

The government will issue £275bn in gilts from April to August, the Debt Management Office said on Monday morning. The figure, which was updated from a previous estimate that went from the beginning of the fiscal year in April to July, exceeds the previous annual record of £228bn recorded in 2009-10 in the wake of the financial crisis. 

For the financial year as a whole, the UK is forecast to sell £412bn in gilts, surpassing the previous record, a survey by Bloomberg of primary dealers reveals. 

The UK along with many other countries has drastically increased its public spending as policymakers attempt to dull the effects of coronavirus on the economy. Boris Johnson's government has launched a number of expensive stimulus measures, including a furlough scheme and several loan programmes meant to help businesses. 

UK government debt rose above 100 per cent of gross domestic product in May for the first time since the wake of the second world war. Gross central government debt — the money owed to the holders of gilts, national savings and creditors of Network Rail — exceeded £2tn for the first time last month.

Gilt investors have generally shrugged off the jolt of issuance given the UK's strong credit rating, independent central bank and strong institutions. The country's debt was under slight selling pressure on Monday, in line with bonds of other European nations. 

Germany, another big player in the government debt market, is due to update its plans on Bund issuance on Monday. 

Johnson says pandemic has been a 'disaster' for the UK

Boris Johnson said the coronavirus pandemic has been a "disaster" for the UK and the country has gone through a "profound shock" over the past three months.

The prime minister said it is not the right time for a full inquiry into his government's response to the crisis, with the official death toll now at more than 43,000 people, making Britain the worst affected country after the US and Brazil, according to figures from Johns Hopkins University. 

"This has been a disaster, let's not mince our words, this has been an absolute nightmare for the country," Mr Johnson told Times Radio on Monday morning.

The prime minister said it was now "crucial" that the government is able to crack down on local flare-ups as lockdown restrictions are eased, including in Leicester where there has been a spike in cases.

"Where you have a local flare-up you have to empower local authorities to crack down on it properly," he said, without giving further details. 

Mr Johnson is due to outline the next phase of the government's economic response this week, including a promise the government will “build, build, build” its way out of the crisis.

Promising no return to austerity, Mr Johnson on Monday said this is instead the moment for a "Rooseveltian" approach to the economy, a reference to the former US president's programme of public works in response to the depression in the 1930s.

European stocks edge lower as US outbreak threatens recovery

European equities slipped as investors considered whether the acceleration of Covid-19 infections in the US would lead to the tightening of lockdown measures holding back economic recovery.

London’s FTSE 100 fell 0.4 per cent to 6,140 points in choppy trading on Monday, while the regional benchmark Stoxx Europe 600 was down 0.3 per cent.

Wall Street’s S&P 500 was set to open flat when trading begins on Monday, futures showed, following heavy losses for equities in Asia-Pacific.

“These latest virus developments, in our view, can potentially slow the recovery, but are unlikely to derail it,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

“With virus cases still rising in a number of US states, a more volatile trial-and-error approach to reopening now appears more likely, but we expect any new restrictions to be localised.”

The coronavirus outbreak in the US has worsened with 2.5m confirmed cases and more than 125,000 deaths from the disease nationwide — a quarter of the 10m infections and half a million global fatalities, Johns Hopkins University figures reveal.

Investors have been prompted to consider the risk of a significant setback in the recovery of the world’s largest economy after top US health officials warned that the window to halt the pandemic’s spread across America was closing.

Attack on stock exchange adds to pressures as Pakistan battles virus

Farhan Bokhari in Islamabad

Terrorists armed with grenades and assault rifles attacked the Pakistan stock exchange (PSX) building in Karachi on Monday, adding to the pressures on prime minister Imran Khan’s government as the country tackles a widening coronavirus pandemic.

At least four militants and a security guard who was on duty outside the building in Karachi’s business district were killed and seven more injured.

“The timing of this attack couldn’t have been worse. The coronavirus has already weakened Pakistan’s economy. Now the attack will further weaken confidence,” said a prominent stock broker who asked not to be named. Pakistan has so far recorded more than 206,000 cases of coronavirus of whom more than 4,100 have died.

Farrukh Khan, PSX managing director, said in an interview with Pakistan’s geo TV channel that it was fortunate so many people were working at home when the attack took place.

The Beijing-headquartered Asian Infrastructure Investment Bank approved a $500m loan to support Pakistan’s efforts to control its Covid-19 outbreak and reduce its immediate social and economic impacts on June 18.

The loan follows the approval in April by the IMF of a $1.4bn emergency loan to meet the country’s urgent balance of payment needs stemming from the outbreak of the Covid-19 pandemic.

The IMF said at the time it would only resume discussions on the implementation of measures required to satisfy terms of the $6bn bailout it approved last year after the threat of the pandemic receded.


BP agrees $5bn sale of petrochemicals business to Ineos

Anjli Raval, Senior Energy Correspondent

BP has agreed to sell its petrochemicals business to Ineos for $5bn as the UK energy major seeks to strengthen its balance sheet and become a more streamlined entity under its new chief executive.

The move to bolster its finances comes as the energy sector takes a significant financial hit triggered by the coronavirus pandemic. BP reported a 66 per cent drop in earnings and a rise in debt in the first quarter as crude demand and oil prices collapsed.  

Bernard Looney, BP’s chief executive, said: 

Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses. As we work to build a more focused, more integrated BP, we have other opportunities that are more aligned with our future direction. 

UK household bank savings jump by record amount in May

Valentina Romei in London

UK households amassed bank savings by a record amount in May, which could help the economy bounce back from the pandemic.

Households added a record £25.6bn of bank deposits in May, following strong increases of £14.3bn in March and £16.7bn in April, according to data released by the Bank of England.

This is the largest gain since records began in 1997 and well above the six-month average to February of £5bn. Households saved money as consumers' spending was limited during the lockdown and incomes were supported by the job retention schemes.

While high household deposits can be considered as a sign of pent-up demand that could help economic recovery, some economists warn that consumers might continue to save rather than spend due to high levels of uncertainty.

“If fear and uncertainty linger then enforced savings will turn to precautionary savings,” said Neil Shearing, group chief economist at Capital Economics.

“In this situation, demand will remain depressed and there will be a need for additional stimulus once the time-limited support programmes that were announced by governments in the early days of the pandemic start to expire.”

Last week, Rishi Sunak, the chancellor, said that he would wait to see whether consumers would spend or continue to save, before deciding whether a fiscal stimulus — such as a temporary cut in value added tax — was needed to revive economic growth.

Other data released on Monday highlighted that consumers are not spending. Consumers avoided borrowing, with net credit shrinking by £4.6bn in May and the annual rate falling 3 per cent, the weakest since the series began in 1994.

Despite the reopening of the housing market on May 13, the number of mortgage approvals for house purchases fell to a low last month at 9,300. The figure is almost 90 per cent below the pre-virus level in February and around a third of its trough during the financial crisis in 2008.

British pubs likely to face crisis even after early rush for a pint

A boozy opening few days will not be enough to solve a profitability crisis for Britain's pubs, reveals research that predicts the industry will take in more than £200m when it reopens this weekend.

Social-distancing recommendations and fewer after-work drinkers are expected to lower industry-wide profitability by more than two-thirds, said the Centre for Economic and Business Research, an economic think-tank.

The government has lowered its distancing guidelines from two metres to "one metre plus", in part to help the hospitality industry reopen in England from July 4. But the report said the industry is still expected to struggle, with nearly a quarter of pubs unable to reopen.

"The need for social distancing will severely impact both customers’ experience of the pub and the viability of pubs themselves," the CEBR said in a report published on Monday.

In better news for landlords, the report forecasts a rush for a pint on Saturday, with English pubs set to take in £210m over the weekend, nearly two-thirds more than over a normal weekend.

Europe's businesses and consumers start to believe in recovery

Martin Arnold in Frankfurt

European business and consumer confidence has rebounded for the second consecutive month in June, but it remains well below its pre-pandemic lows, according to the European Commission’s monthly survey.

The commission’s economic sentiment indicator rose by 8.1 points to 74.8 in June, the highest monthly increase since the poll started in 1961. However, the results from the survey of about 135,000 companies and 32,000 consumers were slightly lower than expected by most economists.

Adding to hopes of a rapid rebound from the deep economic and financial disruption of the pandemic, the commission said its indicator had recovered about 30 per cent of the ground lost in March and April, when much of the European economy was in lockdown.

Andrew Kenningham, economist at Capital Economics, said the survey supported signs from high-frequency data that the economic recovery had gathered speed in June and "suggests that the second-quarter slump in GDP will have been smaller than we initially feared".

Sentiment brightened across all sectors of the economy and among consumers, unlike in May, when it only improved for industrial companies and consumers. The sharpest increase in June was among retail trade businesses.

In the largest eurozone economies, the biggest increases in overall sentiment among businesses and consumers was in France, where it rose by 9.4 points, followed an 8.2 point rise in both Spain and Italy, while it climbed 6.6 points in Germany.

The prospects for the labour market also brightened as the commission's employment expectations indicator rose by 11.9 points to 82.7.

Investors turn to high-yield bonds as dividends dry up

The "erosion" of stock market dividends is driving investors into the high-yield debt market, says a report from Bank of America that predicts another strong quarter of fundraising for low-rated issuers.

Scores of major companies have cancelled or lowered their dividends in order to preserve cash during the pandemic, leaving investors looking elsewhere for returns.

High-yield debt "stands tall in a world where traditional sources of income are being depleted", the Wall Street bank's European credit strategists said in a note on Monday. They added that, for example, industrial bonds offer yields 4 per cent higher than the expected dividend yields on European industrial equities.

Bank of America is also expecting "plenty of positive data surprises" in the weeks ahead as countries reopen their economies:

While the easy money was last quarter, we still see many tailwinds to nudge high-yield spreads tighter in Q3...Markets should be treated to plenty of positive data surprises now that economies are exiting their lockdown hibernation…an essential ingredient for leveraged credit to perform.

A strong third quarter would follow a second quarter "for the ages" for European high-yield, which saw 12 per cent total returns and spreads with highly-rated issuers tighten.

Looking further ahead, though, the London-based strategists warned that the year's final quarter "will be the moment of reckoning for markets" as the economic recovery is tested and the chance of a second wave of infections rises.

Live reader Q & A: What is your experience of being furloughed?

Emma Jacobs, who has written extensively about the workplace and career planning, and Andrew Hill, our management editor and expert on leadership, will respond to your stories and questions now (12 noon, UK time) in the comments below this story.

In the UK, as many as 9m workers are furloughed but the scheme will come to an end in October. Similar European schemes are in place, amid warnings that if they are extended they could “trap people in unviable ‘zombie’ jobs”, deterred from switching to sectors with better prospects.

Indian cities look to plasma therapy after encouraging trial results

Amy Kazmin in New Delhi

India’s capital is setting up a bank to collect donations of plasma from recovered coronavirus patients, after a small trial yielded encouraging results.

Arvind Kejriwal, the chief minister for New Delhi, appealed to virus survivors to step forward to donate to help others battling for their lives. “It’s rare that you get to save lives,” he said. “I request you to come forward to donate.”

He said that the plasma bank, which all hospitals in the city will be able to access, would be operational within two days and that local authorities would reimburse donors for their transport costs if they contributed plasma to the bank.

Plasma therapy extracts the blood component that contains antibodies from those who have recently recovered from the virus and transfuses it to Covid-19 patients.

The state of Maharashtra, where the financial capital Mumbai is located, on Monday unveiled its plans for a large-scale plasma trial and treatment programme as it seeks to seek some benefit for those falling ill from India’s recovered patients.

The project will make the treatment available free to those who need it at 17 government hospitals and will be the world’s largest formal trial of plasma therapy.

India has confirmed more than 549,000 cases, the fourth highest in the world, with more than 20,000 new cases reported every day. Of those, 322,000 have recovered and 16,500 have died.

Singapore hands out wearable contact tracing devices

Stefania Palma in Singapore

Singapore has started distributing a wearable device to expand digital contact tracing after an insufficient number of users downloaded a voluntary app.

The city state is handing out the first batch of devices to "the most vulnerable seniors who are currently not digitally connected and at higher risk from Covid-19," according to a government statement. This will help avoid further outbreaks after the country started gradually lifting lockdown measures earlier this month, it added.

The tokens will function like the TraceTogether app, which has been downloaded by just 37 per cent of Singapore's 5.7m population and uses bluetooth to record distance between users and the duration of their encounters. The data will be encrypted and kept in the device for 25 days at most.

The token - which has a battery life of up to nine months and requires no charging - has no GPS nor internet or cellular connectivity, meaning geolocation data cannot be captured and data cannot be pulled from the device unless physically handed over, authorities said.

The use of the device is not mandatory, but Singapore will continue to "encourage citizens to use the TraceTogether app and/or token to facilitate contact tracing," said the Smart Nation and Digital Government Group, which is involved in Singapore's digital contact tracing scheme.

US stocks set to reverse some losses as investors weigh Covid-19 options

Wall Street was set to stabilise as investors considered whether the acceleration of coronavirus infections in the US would lead to further tightening of lockdown measures that could hold back economic recovery.

Futures tipped the S&P 500 to open 0.2 per cent higher when trading begins later in the day, clawing back some of last week’s losses. European equities pushed higher in choppy trading with London’s FTSE 100 gaining 0.6 per cent and the regional benchmark Stoxx Europe 600 up 0.1 per cent.

Shares in the Asia-Pacific region suffered heavy losses, with Japan’s benchmark Topix index 1.8 per cent lower, Hong Kong’s Hang Seng down 1 per cent while South Korea’s Kospi slipped 1.9 per cent.

Investors have been prompted to consider the risk of a significant setback in the recovery of the world’s largest economy after top US health officials said on Sunday that the window to halt the pandemic’s spread across America was closing.

Frankie & Benny's owner wins approval to shut restaurants

British casual dining business The Restaurant Group has won creditor approval to significantly cut the size of its estate.

The owner of the Frankie & Benny’s chain said that 82 per cent of its creditors voted for the restructuring, exceeding the 75 per cent hurdle for such company voluntary arrangements to succeed.

The group announced earlier this month that it planned to shut 125 of its underperforming restaurants, in a move that mostly affected the Frankie & Benny’s chain.

This came after coronavirus and related lockdowns exacerbated an existing slowdown in the casual dining sector.

The Restaurant Group, which also trades under the Wagamama and Garfunkel’s brands, said its estate will now comprise approximately 160 sites, of which approximately 85 will be subject to reduced rental costs and revised lease terms.

“These are exceptionally challenging times for our sector,” chief executive Andy Hornby said. He called the CVA “a critical component,” in ensuring the future of the business.

Wall Street mixed as investors weigh Covid-19 options

Wall Street’s major bourses were mixed as investors considered whether the acceleration of coronavirus infections in the US would lead to further tightening of lockdown measures that could hold back economic recovery.

The S&P 500 opened 0.1 per cent lower while the Dow Jones Industrial Average was up 0.4 per cent and the tech-heavy Nasdaq slipped 0.8 per cent. Equities endured some choppy trading in Europe, with London’s FTSE 100 gaining 0.5 per cent and the regional benchmark Stoxx Europe 600 largely unchanged.

Investors have been considering the risks of a significant setback in the recovery of the world’s largest economy a day after top US health officials said that the window to halt the pandemic’s spread across America was closing.

Gilead to charge governments $2,340 for remdesivir treatment

Gilead Sciences has said it will charge governments $2,340 for a course of remdesivir, a drug that has been shown to shorten recovery times in Covid-19 patients.

The US biotech said government healthcare programmes in developed markets globally would be charged a flat fee of $390 per vial for the drug. A five-day treatment uses six vials.

Private insurers in the US would be charged $520 per vial, bringing the cost for a typical patient with commercial insurance to $3,120. The amount a patient would pay out of their own pockets would depend on their insurance policy.

The price of drugs in the US has placed pharmaceutical companies and biotechs under close scrutiny.

Gilead said it had priced the drug "well below" what it considers to be the value of the benefits it provides. A study by the National Institute of Allergy and Infectious Diseases (NIAID) found that remdesivir shortened the time to recovery by four days on average.

The New York-listed company claimed the shortened recovery would save hospitals around $12,000 per patient. Gilead said it had set the price point at a relative discount to allow "broad and equitable access at a time of urgent global need".

It said it chose to charge governments a flat fee to "remove the need for country by country negotiations on price".

The group added that it had reached an agreement with the US Department of Health and Human Services to manage the allocation of the treatment through the end of September while supplies are constrained.

US pending home sales post record monthly rise in May

A forward looking indicator of US home sales rebounded by the most on record in May, signalling the housing market is recovering as coronavirus lockdowns ease and mortgage rates remain low.

The US pending home sales index climbed 44.3 per cent in May from the previous month — the biggest increase since records going back to 2001 — the National Association of Realtors said.

That eclipsed economists' expectations for an 18.9 per cent increase and marked the first rise in three months. Pending home sales fell 21.8 per cent and 20.8 per cent respectively in April and March.

The report showed every major region reported a month-on-month increase in transactions.

"The quick rebound suggests signings were mostly deferred, rather than cancelled," said Ian Shepherdson, economist at Pantheon Macroeconomics. He added:

The wave of job losses appears mostly to have hit younger renters rather than would-be homebuyers, whose median age is about 47. For people who have kept [their] jobs, the drop in mortgage rates makes home purchase attractive.

Florida's daily case count eases back from record levels

Florida's daily tally of coronavirus cases has eased back from peak levels over the weekend, potentially providing some respite from a recent stretch when the number of new cases in the US topped 40,000 for three consecutive days.

A further 5,409 people in Florida tested positive for Covid-19 over the past 24 hours, according to a provisional report on Monday morning from the state's health department, down from about 8,500 yesterday.

Nearly 9,600 Floridians tested positive for coronavirus on Saturday, a record for the state. This would rank as the ninth-biggest daily increase any US state has ever reported, trailing behind only New York during the depths of its crisis in April, according to FT analysis of Covid Tracking Project data. Florida's daily case counts from Friday to Sunday would also rank within the 15 biggest one-day rises for any US state.

Figures over the weekend and Monday tend to be lower than other days of the week because of a slowdown in reporting.

Florida's health department said it conducted 41,626 tests over the past day, down from about 72,000 on Sunday and from a record of about 78,300 on Saturday. The percentage of people testing positive rose to 15.7 per cent, the highest since June 23.

From Friday to Sunday, the number of daily coronavirus cases in the US exceeded 40,000, with a record 44,373 on June 26, according to Covid Tracking Project data, pushing the number of confirmed cases nationally since the pandemic began to more than 2.5m as of Sunday.

Wall Street rises 1% boosted by Boeing

US stocks were up more than 1 per cent by midday boosted by gains in Boeing and after a sharp drop on Wall Street last week when investors were spooked by a rise in coronavirus cases.

The S&P 500, which opened modestly lower was up 1.2 per cent led by industrials and materials, which rose more than 2 per cent each. The Nasdaq Composite was up 1 per cent.

The gains came as shares in aircraft manufacutrer Boeing jumped 8 per cent after it received approval from the Federal Aviation Administration to begin testing flights of its grounded 737 Max aircraft this week.

Investors also cheered upbeat economic data, which showed a record monthly rise in pending home sales in the US last month as coronavirus lockdowns began to ease.

The rebound on Monday follows a pull back last week as investors grew anxious about the rise in coronavirus cases and Texas and Florida took steps to roll back reopening measures. Investors continue to weigh up the rising cases against the likelihood of fresh lockdowns.

Elsewhere in markets, the yield on the US 10-year Treasury note was little changed at 0.6446 per cent. The dollar index, a gauge of the buck against a weighted basket of peers, climbed 0.2 per cent to 97.60.

Over 25% of US CEOs do not see recovery for their firms until 2022, survey finds

More than a quarter of chief executives of US companies do not expect a recovery for their companies until after 2021, according to the Business Roundtable's quarterly economic outlook survey.

While most CEOs on the body — that represents leaders from nearly 200 of America’s largest companies including Amazon, Apple and Goldman Sachs — expect the business conditions to recover to pre-Covid levels next year, 27 per cent do not see a recovery for their companies until 2022 at the earliest.

The survey showed a sharp drop in CEOs' plans for hiring and capital investment as they predict a 3.8 per cent GDP contraction this year, compared with their previous outlook for 2 per cent growth.

The second quarter survey comes amid a rise in coronavirus cases in the southern and western parts of the US, which has prompted some states like Texas, Florida and North Carolina to either roll back easing measures of pause reopening plans.

The survey also showed that the Business Roundtable, one of the largest business lobbying groups in the US, plans to push Congress to take further action to support the recovery.

"We appreciate the actions taken by the Administration and Congress so far to help American workers, small businesses and communities, but there is much more to do," said Joshua Bolten, chief executive of the Roundtable. "We encourage policymakers to work together on additional measures that will help bring a rapid end to this public health crisis and encourage economic recovery efforts as business operations resume."

Fed launches facility to buy newly-issued corporate debt

James Politi in Washington

The US Federal Reserve has launched a facility to purchase newly-issued corporate debt from large companies, setting up the latest in a series of schemes designed to shore up financial markets during the coronavirus crisis.

The move by the Fed comes despite the recovery in corporate credit markets from the stress they were experiencing in the early stages of the US pandemic, which means usage of the facility is expected to be limited. But the Fed believes it is important to deliver on the plans it made to create the corporate bond buying scheme, and thinks it could still be a useful backstop in the event of further turmoil in the markets.

The Fed has separately launched a facility to purchase corporate debt in the secondary market, which has involved some bond purchases of large companies including carmakers like Toyota and technology companies such as Apple, although volumes of activity have been relatively low there too.

The Fed’s move to purchase corporate debt is among the most novel actions taken by the US central bank during the pandemic, and has attracted some criticism for contributing to higher inequality by propping up large companies.

Powell says US recovery will depend on 'success in containing the virus'

James Politi in Washington

Jay Powell, chair of the Federal Reserve, said the US will need to “keep the virus in check” as the world’s largest economy begins to rebound from the shock of the coronavirus pandemic.

In prepared testimony released ahead of a hearing before the House financial services committee on Tuesday, Mr Powell offered a more upbeat assessment of the current state of the economy than he has previously. But in the face of worrying spikes in cases across states ranging from Arizona to Florida and California, he cautioned that containing the outbreak needed to remain a priority.

“As the economy reopens, incoming data are beginning to reflect a resumption of economic activity: Many businesses are opening their doors, hiring is picking up, and spending is increasing. Employment moved higher, and consumer spending rebounded strongly in May. We have entered an important new phase and have done so sooner than expected,” Mr Powell said.

“While this bounceback in economic activity is welcome, it also presents new challenges—notably, the need to keep the virus in check,” he added.

In his prepared remarks, the Fed chair added that the burden of the pandemic had fallen disproportionately on low-income households and minorities. Despite recent economic improvement, however, output and employment were still “far below their pre-pandemic levels”.

“The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus. A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities,” he said.

Boeing leads S&P 500 in day of broad gains for US stocks

US equities finished more than 1 per cent higher on Monday, with investors taking a breather from recent concerns around the rising number of coronavirus cases across the west and south of the US.

The S&P 500 closed 1.5 per cent higher, with all sectors ending in the black. Industrials were the best performer, thanks primarily to a 14.4 per cent jump in Boeing's share price after the aircraft manufacturer said it received approval from the federal aviation regulator to recommence testing flights of its grounded 737 Max aircraft this week.

The tech-focused Nasdaq Composite gained 1.2 per cent.

Government bonds were firmer, with yields slightly lower. The yield on the benchmark 10-year US Treasury was down 0.03 percentage points to 0.63 per cent.

Jefferies to boost share buybacks after trading revenues jump

Laura Noonan, in New York

Investment bank Jefferies vowed to spend more money buying back its shares after a 90 per cent surge in second quarter trading revenues helped the independent investment bank to record profits for the quarter end May 31.

Jefferies chief executive Rich Handler said the company achieved "remarkable results" despite a "challenging, volatile and sad environment" as he said the board had authorised buybacks of as much as $250m versus a prior authorisation to repurchase up to $177m.

Jefferies' decision to up its buyback authorisation comes days after the Federal Reserve banned America's biggest banks from buying back their shares until at least October, and capped dividends. Jefferies falls outside of the scope of that Fed decree, since it is not a deposit taking institution covered by the Fed's annual stress tests.

Net revenues for Jefferies Financial Group came in at $1.034bn, beating the $844.5m expected by analysts in a Bloomberg poll and the $902m Jefferies earned in the same period last year. Net profits for the quarter ended in May came in at $130.7m, versus $109.9m in the second quarter of 2019.

JPMorgan Chase, the world's largest investment bank, said last month that it would likely post a 50 per cent increase in trading revenues in a second quarter when record activity fuelled activity.

Fixed income trading was the standout performer, with revenues there almost trebling to $493m versus the $173m the division earned a year earlier. Equities trading revenues for the quarter from March to May came in at $237m, versus $206m in the same period in 2019.

Investment banking, where marketwide fees hit a record high in the first six months, was a more mixed affair for Jefferies. The company's debt underwriting fees almost halved to $81m versus $151.5m a year earlier, even as companies loaded up on record amounts of debt in benign markets. Equity underwriting fees were up 15 per cent, to $125.4m, despite a dearth in IPOs, while advisory fees were down only marginally, at $182m, even as M&A deals fell off sharply.

The results set a positive tone for trading powerhouses of Wall Street's bigger banks, who begin reporting second quarter earnings on July 14. Still, the impact of the trading boom is likely to be overshadowed by the provisions to deal with loan losses triggered by the Covid crisis.

LA county reports record one-day increase in coronavirus cases

Los Angeles county officials have issued a dire warning after revealing a record one-day increase in new coronavirus cases in the region that took its tally since the pandemic began to more than 100,000.

A further 2,903 people in the county have tested positive for Covid-19 over the past day, officials revealed on Monday afternoon. The county has confirmed 100,772 cases of coronavirus since the pandemic, more than any other county in the US.

The spread of the virus appears to have quickened. Christina Ghaly, director for the Los Angeles county's department of health services, said that last week they estimated one in 400 people were infected with coronavirus and not isolated, either at home or in a hospital bed. "Today, we estimate the number is one in 140," which she said would lead to a rapid rise in new cases and could cause beds in intensive care units to fill up quickly in the "very near future."

Hospitalisations have also jumped higher, to 1,669 as of June 27 compared to 1,319 at the beginning of the month, said Barbara Ferrer, the county's director of public health.

"This is the time to hunker down, back in your home, whenever you can," Ms Ferrer said.

On Sunday, California governor Gavin Newsom ordered bars in seven counties, including Los Angeles, to close owing to the spread of coronavirus. and recommended eight other counties in the state to close bars in their regions.

California reported 5,307 new cases of Covid-19 over the past 24 hours, up from about 4,800 on Sunday. The state reported a record 7,149 cases on June 24.

Kansas orders residents to wear masks in public

We may not be in Kansas anymore, but if you do plan to be there from July 3, you will now need to wear a face mask in public.The new requirement comes into effect on Friday, governor Laura Kelly said at a press conference on Monday afternoon.

"Wearing a mask is not only safe, but it is necessary to avoid another shutdown," Ms Kelly said, pointing out there had been no clusters of coronavirus attributed to businesses such as barbershops, hair salons and dental offices, where face coverings were being worn. There had been "significant increases" in clusters where masks were not being worn, though.

A further 905 people have tested positive for coronavirus since Friday, Ms Kelly said. The state tends to report new cases once every few days, but this would rank as its biggest jump, according to Financial Times analysis of Covid Tracking Project data, and up from the 568 reported on Friday.

The governor also added South Carolina and Florida to a list of states where people visiting or returning from will be asked to go into quarantine for 14 days.

Daily rate of new coronavirus cases in US eases back below 40,000

The number of new coronavirus cases in the US fell below 40,000 for the first time in four days, but states in the west and south remained vigilant with Arizona becoming the latest to reverse reopening plans.

A further 36,490 people tested positive over the past 24 hours, according to data compiled by Covid Tracking Project on Monday, down from 42,161 on Sunday and a record of nearly 44,400 on June 26.

California (5,307), Florida (5,266) and Texas (4,283) had the biggest increases, but remain below records hit in recent days that prompted the latter two to begin the statewide reversal of plans to reopen their economies.

Figures on Monday tend to be lower than other days of the week owing to a slowdown in reporting over the weekend and typically tick up again on Tuesday.

Arizona reported 625 new cases on Monday, down from a record 3,857 on Sunday. The state's health department said today's report was incomplete because a lab partner had missed the daily deadline for submission of data.

Governor Greg Ducey announced on Monday the state's reopening plans would be reversed, with bars, gyms, cinemas and water parks to close for at least the next 30 days, while the reopening of schools in the state will now be delayed until at least August 17.

Georgia (2,207), Tennessee (2,125), Alabama (1,734), North Carolina (1,342) and South Carolina (1,324) rounded out the group of states to report increases of 1,000 or more.

Tennessee, Alabama, Kansas (905) and Montana (56) were the four states to report record one-day increases, according to Financial Times analysis of Covid Tracking Project data.

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