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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 company said government healthcare programmes in developed markets 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 to $3,120.
The US Federal Reserve has launched a facility to purchase newly issued 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.
US equities finished 1.5 per cent higher on Monday, 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.
Jefferies will spend more money buying back its shares after a 90 per cent surge in second-quarter trading revenues helped the investment bank to record profits for the quarter ended May 31. Chief executive Rich Handler said the company had achieved “remarkable results” despite a “challenging, volatile and sad environment” and the board had authorised buybacks of as much as $250m versus a prior authorisation to repurchase up to $177m.
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. 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.
British casual dining business The Restaurant Group has won creditor approval to significantly reduce its operations. The company said 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 said this month that it planned to shut 125 of its underperforming restaurants, in a move that mostly affected the Frankie & Benny’s chain.
European business and consumer confidence has rebounded for the second consecutive month in June, but remains well below pre-pandemic lows, according to the European Commission’s monthly survey. The economic sentiment indicator rose by 8.1 points to 74.8 in June, the highest monthly increase since the poll started in 1961, in a survey of about 135,000 companies and 32,000 consumers.
Singapore has started distributing a wearable device to expand digital contact tracing after an insufficient number of users downloaded an 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. SIngapore hopes it will help avoid further outbreaks after gradually lifting lockdown measures.
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, chief minister of the Delhi capital territory, appealed to virus survivors to donate. “It’s rare that you get to save lives,” he said. Mr Kejriwal said the plasma bank, which all hospitals in the city will be able to access, would be operational within two days.
Covid-19 drives swimwear brand Seafolly into administration
Seafolly, a 45-year-old Australian swimwear and women's beachwear fashion brand, fell into administration on Monday, in another retail collapse stemming from the coronavirus pandemic.
The administration would trigger a “sale of business process”, Scott Langdon of KordaMentha, the voluntary administrator, said in a statement, citing the “crippling financial impact of the Covid-19 pandemic”.
He said Seafolly would continue to operate its 56 stores in Australia, the US, Singapore and France. “Given the quality of the brand and its reputation, there will inevitably be a high level of interest in purchasing the business,” Mr Langdon said.
Seafolly is majority owned by US private equity firm L Catterton.
Fed chief says US recovery depends on containing Covid-19
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.
“As the economy reopens, incoming data are beginning to reflect a resumption of economic activity,” he said. “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.”
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. “While this bounceback in economic activity is welcome, it also presents new challenges—notably, the need to keep the virus in check,” he added.
The Fed chair added that 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 re-engage in a broad range of activities,” he said.
Los Angeles Covid-19 positive cases hit daily record
Peter Wells in New York
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 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.
US daily rate of new cases eases back below 40,000
Peter Wells in New York
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.
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.
Asia-Pacific stocks follow Wall Street higher
Asia-Pacific stocks rose on Tuesday following a rebound on Wall Street amid signs of an economic recovery and expectations that coronavirus outbreaks in the US will be contained.
The Topix in Japan was up 1.4 per cent, South Korea’s Kospi climbed 1.4 per cent and the S&P/ASX 200 gained 0.3 per cent. Futures tip the S&P 500 to rise 0.2 per cent.
China is set to release its official manufacturing purchasing managers’ index for June later in the morning, giving further pointers on the country’s economic recovery from the pandemic.
Overnight in the US, the S&P 500 added 1.5 per cent on expectations of further stimulus and after Gilead Sciences outlined pricing for its antiviral drug remdesivir that has shown to be effective in treating Covid-19 patients.
Jay Powell, Federal Reserve chairman, said the bounceback in economic activity in the US also brought the challenge of keeping the virus under control.
Japan production falls as jobless rate hits 3-year high
Industrial production in Japan fell in June and the unemployment rate rose to a three-year high as the country remained under a state of emergency to control the spread of coronavirus.
Industrial production dipped by 8.4 per cent month-on-month in May, according to preliminary figures from Japan’s ministry of economy trade and industry. The drop was greater than the 5.6 per cent fall economists forecast in a Reuters poll.
The ministry said industrial production was “declining rapidly” as production, shipments and inventories all fell. Motor vehicles, production machinery and iron and steel were the main industries behind the fall.
However, the ministry forecast improvement for June and July with a return to growth.
Unemployment rose to 2.9 per cent in May, up from 2.6 per cent a month earlier and the highest rate in three years.
“Looking ahead, the labour force should continue to rise over the coming months as many more who lost their jobs during the state of emergency start looking for employment again,” said Tom Learmouth, Japan economist with Capital Economics.
“That should push the unemployment rate to around 4 per cent by the end of the year.”
S Korean factory output down 6% despite eased restrictions
Edward White in Wellington
South Korean industrial production declined further in May despite the country easing some social distancing measures that month, while retail sales picked up.
Industrial production fell 5.6 per cent year on year in May, according to Statistics Korea, as key export industries including cars and electronics faced a slump in global demand.
A narrower manufacturing production index declined 9.8 per cent from a year earlier.
Domestic spending showed a rosier picture, with the retail sales index up 1.7 per cent from May 2019, a positive sign for the government in Seoul which has sought to spur spending with unprecedented cash handouts after a 6 per cent drop in consumption in the first quarter.
The Bank of Korea has forecast a 0.2 per cent contraction in gross domestic product growth this year, following a 1.3 per cent drop in the first quarter. However, most international banks and financial institutions are expecting a steeper decline despite a record $230bn in virus-linked stimulus.
The mixed economic data come as health officials remain on edge of new clusters of coronavirus infections in Seoul.
Broadway cancels performances for rest of 2020
New York's theatre will remain suspended for the rest of the year, a producers' organisation announced on Monday, citing effects of the coronavirus pandemic.
The Broadway League announced that it would offer refunds and exchanges for tickets purchased for all performances until January 3, 2021.
The league said it was working with authorities and unions to restart the schedule, incorporating screening, cleaning and way-finding inside theatres for audiences, and testing and other backstage protocols for cast and crew.
Tickets for performances for next winter and spring are expected to go on sale in the coming weeks, the league said in a statement.
"The Broadway experience can be deeply personal but it is also, crucially, communal," said league chairman Thomas Schumacher.
Broadway performances were suspended on March 12, closing 31 productions that were running. Another eight shows in rehearsals have been postponed.
Toronto council to waive sidewalk café fees
Canada’s largest city will waive fees for permits for sidewalk cafés and restaurants occupying roadways as part of a plan to boost a local hospitality industry reeling from the coronavirus pandemic.
Toronto city council on Monday approved a plan to provide more outdoor dining areas to help some restaurants, cafés and bars create physical distancing for patrons during the summer months.
The council said it would streamline the application processes and waive fees for café owners to install chairs and tables on pedestrian areas and in street lanes closest to the kerbs.
NZ detects 2 new cases in arrivals from overseas
New Zealand announced two new cases of coronavirus on Monday, both of whom were incoming passengers who had been in quarantine, according to the health ministry.
One case was a man in his 50s who arrived in Auckland on an Air India flight from Mumbai on June 24. The second was a woman in her 20s who arrived aboard an Air New Zealand flight from Los Angeles on June 18.
"Globally, the Covid-19 pandemic continues to accelerate and new cases were always expected at our border," the ministry said in a statement.
Melbourne outbreak not a second wave, says chief nurse
Australia's top nurse says the outbreak focused on Melbourne, the country's second-largest city, is not being treated as a second wave.
"I want to reassure all Australians that whilst we are very concerned about what we see in Victoria, what we have is a community outbreak, in one part of the city, in one state of the country," Alison McMillan, Australia's chief nursing and midwifery officer, said on Monday.
Of 85 cases in Australia recorded on Monday, 75 emerged in Victoria, the state of which Melbourne is capital.
"A second wave is not something that is easy to describe, but we do look to say where we would see wider spread of community transmission across the country,” Ms McMillan said.
"The label is less important than the actions we take, and the actions we are taking are really positive to containing the further spread," she added.
China reports 7 new coronavirus cases in Beijing
Health authorities reported seven new coronavirus cases in Beijing to the end of Monday as the Chinese capital works to control an outbreak that was discovered in early June.
The new cases bring the total from an outbreak that has been linked to a wholesale food market to 325.
An additional 27 people have tested positive for the virus but do not have any symptoms of Covid-19. China does not include asymptomatic cases in its official tally.
Authorities also reported 11 imported infections and a case of Covid-19 in Shanghai.
China has now reported 83,531 cases of Covid-19 and 4,634 deaths.
Lululemon to buy fitness tech start-up Mirror for $500m
Alistair Gray in London and Miles Kruppa in San Francisco
Lululemon, the yogawear specialist, has agreed to pay $500m to buy Mirror, a home-workout equipment company backed by hedge fund manager Steve Cohen.
Mirror, which was founded four years ago by a former professional ballet dancer, sells wall-mounted, internet-connected screens for $1,495 each before tax — plus a $39 monthly membership fee — and has become a popular alternative to the gym among well-heeled consumers.
The acquisition of the New York-based start-up shows that the appetite to do deals persists in some corporate boardrooms, even as concerns grow over a rise in US coronavirus infections.
Read more here
Singapore students and teachers test negative
Singapore's health ministry said on Monday that teachers and students at a secondary school where a pupil recorded a positive test for Covid-19 were free of the virus.
On Sunday, the ministry said a 15-year-old student at East Spring Secondary School, a government high school in the Tampines neighbourhood, had tested positive for Covid-19.
As a precaution, 39 students and 11 staff contacts were tested and all the results were negative.
China’s manufacturing sector expands in June
China’s manufacturing sector expanded in June at a faster pace than forecast, thanks to rising production and new orders as the economy recovers from the coronavirus pandemic.
The official manufacturing purchasing managers’ index rose to 50.9, up from 50.6 in May, according to the National Bureau of Statistics. The 50-point level separates expansion from contraction.
Economists polled by Reuters had forecast a reading of 50.4.
China’s manufacturing PMI fell to a record low of 35.7 in February as strict measures to control the outbreak shut down factories.
The non-manufacturing PMI rose to 54.4, with the services sector showing an improved picture with a reading of 53.4 from 52.3 in May.
Global stocks rise as investors shake off US outbreak worries
Hudson Lockett in Hong Kong
Global stocks climbed higher as investors shook off concerns over renewed coronavirus outbreaks in the US, even as Arizona became the latest state to throw its economic reopening into reverse amid a sharp rise in new cases.
Japan’s benchmark Topix index rose 1.2 per cent as Australia’s S&P/ASX 200 climbed 1.3 per cent. China’s CSI 300 index of Shanghai and Shenzhen-listed stocks rose 0.8 per cent while Hong Kong’s Hang Seng added 0.9 per cent.
Those gains came on the heels of a solid day for US stocks, with the S&P 500 closing 1.5 per cent on Wall Street as market participants bet that the rash of outbreaks in the earliest states to roll back lockdown measures could be contained.
The number of new cases in the US fell below 40,000 for the first time in four days on Monday, but states in the west and south of the US remained on high alert as Arizona joined Texas and Florida in halting reopening plans.
Chinese equities were also buoyed by a pick-up in activity at the country’s factories, with the official manufacturing purchasing managers’ index for June coming in above most economists’ expectations.
Ethiopia thanks water programme for mitigating Covid-19 spread
Ethiopia's five-year programme to build rural water infrastructure has paid off by improving personal hygiene during the Covid-19 pandemic, an official said on Monday.
The programme, known as One WASH, "did not plan for the Covid-19 pandemic, but it has prepared us to fight the pandemic better ... especially in the unserved rural communities”, said Beshah Mogesse, head of Ethiopia’s Water Development Commission.
Many more Ethiopians are now able to observe the preventive measures of hand-washing and general hygiene, Mr Mogesse was quoted as saying in a blog post on the website of the African Development Bank, which co-funded the programme.
The $178m project financed the construction of new infrastructure and repairs to disused equipment such as pumping stations and pipelines and also provided technical training to maintenance personnel.
The country launched the five-year first phase of One WASH in 2014, and it had benefitted about 4.3m people by the time it ended in 2019, officials said.
Mr Mogesse said the project had become a key tool in the country’s efforts to tackle the coronavirus pandemic.
New Zealand moves Apec meeting to digital platform
The New Zealand government announced on Tuesday that the Asia Pacific Economic Co-operation forum scheduled for Auckland in 2021 would move online due to the coronavirus pandemic.
While leaders of the 21-member Apec forum were not scheduled to meet until November 2021, many other events had been planned earlier.
New Zealand Prime Minister Jacinda Ardern said there was “too much uncertainty about whether face-to-face meetings were going to be possible".
Ms Ardern, pictured visiting a ski resort which reopened on Friday, said there would also be significant cost savings from a digital conference.
“Let’s just plan for the virtual gathering,” she said. “We don’t have the added cost and added uncertainty that Covid-19 brings.”
Under Armour pulls out of US university sport deals
Sara Germano in New York
Under Armour underscored the challenges that the coronavirus pandemic has thrown down to US college sport, as the fitness wear company moved to end outfitting deals with two university programmes worth hundreds of millions of dollars.
The arrangements with the University of California, Los Angeles, and the University of California, Berkeley, were part of a marketing push by Under Armour in recent years to provide colleges with a mixture of cash and product in return for the right to outfit their sporting teams.
However, the Covid-19 outbreak has gutted sport globally, and paused the $8bn US collegiate sector. Both universities said they would contest Under Armour’s move to terminate the deals.
Read more here
India gives green light to human trials for home-grown vaccine
Benjamin Parkin in New Delhi
Indian authorities have given the green light to trial a locally developed Covid-19 vaccine candidate on humans, a first in the country.
Hyderabad-based Bharat Biotech said that India's drug regulator approved its vaccine contender, Covaxin, for human trials that were likely to begin next month.
The vaccine was developed with the government-run Indian Council of Medical Research.
India's first shot at its own vaccine comes as the country's coronavirus burden grows, with the number of confirmed infections crossing half a million and sick patients overwhelming hospitals in large cities such as Delhi and Mumbai.
Uber in talks to buy food delivery start-up Postmates
James Fontanella-Khan in New York and Miles Kruppa and Dave Lee in San Francisco
Uber is preparing an offer to buy food delivery start-up Postmates, weeks after it was beaten in a race to acquire larger rival Grubhub, according to people briefed about the matter.
A tie-up between Uber and Postmates would hasten the long-awaited consolidation of the heavily loss-making US food delivery market. Demand has surged as coronavirus lockdowns have prompted people to turn to online dining and delivery apps.
Read more here
US hedge fund manager behind long-shot treatment
David Crow in New York
An experimental drug being developed by a tiny Miami-based biotech company offers a glimpse of hope at a time of crisis.
The twice-a-day pill could be prescribed to someone as soon as they test positive for coronavirus, attacking the disease before they become seriously sick.
Like all early-stage drugs, it is a long shot, but if the medicine, codenamed EIDD-2801, does work, it would be a crowning achievement for Wayne and Wendy Holman, the husband and wife team behind Ridgeback Biotherapeutics.
Read more here
Scotland approves T-cell coronavirus therapy trial
Mure Dickie in Edinburgh
A Scottish biotech company has won approval to begin trials of an innovative T-cell therapy that could transform coronavirus treatment by boosting immune systems before intensive care is required.
The trials in Edinburgh highlight growing international interest in the role in fighting viral infections played by T-cells, a key part of the body’s defences that target infected or cancerous cells.
TC BioPharm, a privately held biotech company, said it had developed a method for cultivating large numbers of T-cells from healthy donors and would give them to coronavirus patients, who often had low levels of T-cells.
Read more here
Melbourne outbreak blamed on hotel quarantine breach
Failures in a hotel quarantine regimen contributed to a coronavirus outbreak in Australia's second most populous state, the government said on Tuesday.
"Victoria is experiencing significant community transmission," the state's premier, Daniel Andrews, said in a statement.
He said several cases detected in May and June could be traced to an infection control breach in the state’s hotel quarantine system.
Of 85 cases in Australia recorded on Monday, 75 emerged in Victoria, the state of which Melbourne is capital.
Mr Andrews said he had ordered an inquiry into the breach, to be headed by a retired judge.
In the meantime, he said, people would be diverted to other cities, adding that 10 Melbourne suburbs would be put under tighter restrictions.
Other states are shunning Victoria as they reopen borders.
Queensland's premier, Annastacia Palaszczuk, said anyone who had travelled from Victoria – including Queenslanders - would be prevented from entering the state when borders reopen on July 10.
“We cannot risk removing our border restrictions for those people coming from areas in Victoria right now," she said on Tuesday.
Covid-19 delays ASX blockchain launch
Jamie Smyth in Sydney
Australia's biggest stock exchange has delayed its ambitious plan to use blockchain technology to clear and settle trades in equities until April 2022 due to Covid-19 and concerns from some users about the implications of the launch.
ASX's new target date to go live is 12 months later than previously scheduled, which the exchange said would provide extra time for users to adapt in light of the pandemic and enable it to accommodate functionality changes requested by users.
“We have listened to the diverse views of stakeholders and accommodated feedback on timing, user readiness and changes to functionality,” said Peter Hiom, deputy chief executive of ASX.
He said ASX remained committed to the project, noting how record trading volumes in March during the initial Covid-19 outbreak in Australia strained the existing Chess clearing and settlement system.
“The recent period of record trading activity and volatility, and the prevalence of manual and paper-based processes in many back offices across the industry, have underlined why the implementation of the next generation of technology to support the digitisation of Australia’s equity market is a priority.”
Several users of the clearing and settlement system had expressed concerns to ASX about its plan to replace its existing Chess system with so-called distributed ledger technology — which underpins bitcoin and other digital currencies.
They said they had not been given the necessary technical, operational and regulatory information on how the new system would operate or the fees that would be charged by the ASX for existing and new services.
Computershare - which maintains a register of legal ownership of shares and distributes corporate dividends for investors — told the FT it was concerned ASX could use the technology overhaul to extend its dominance in clearing and settlement into other markets, including share registry services.
It said a delay until April 2023 was required to address the risks of the project, particularly in light of complications introduced by the Covid-19 pandemic.
UK GDP contracts 2.2% in first quarter
Valentina Romei in London
The UK economy recorded its largest drop in the first quarter since 1979, shrinking by more than previous estimates as the coronavirus crisis choked activity in March.
Output in the UK fell 2.2 per cent in the first three months of the year compared with the previous quarter, the Office for National Statistics said. This is a sharper contraction than initial estimates of 2 per cent. The fall is now the joint largest drop in UK gross domestic product since 1979.
“Our more detailed picture of the economy in the first quarter showed GDP shrank a little more than first estimated”, said Jonathan Athow, ONS deputy national statistician. “All main sectors of the economy shrank significantly in March as the effects of the pandemic hit...The sharp fall in consumer spending at the end of March led to a notable increase in households’ savings.”
The revision was largely driven by household consumption, which declined 2.9 per cent in the first quarter, 1.2 percentage points lower than estimates for that period of time.
With spending limited by restrictions as the economy began to lock down to stem the spread of the pandemic, the households saving ratio increased to 8.6 per cent in the first quarter, up from 6.6 per cent in the previous quarter.
The ONS has released first estimates of monthly GDP in April, which showed a 20.4 per cent plunge, the largest contraction since monthly records began in 1997 and follows a 5.8 per cent contraction in March, the previous record fall.
Since then, economic sentiment and retail sales data showed improvement reflecting the gradual reopening of the economy.
The pandemic has made it difficult to produce standard economic data and GDP estimates have been subject to large revisions in all major economies.
Shell warns of up to $22bn hit on assets from oil price slump
Anjli Raval, Senior Energy Correspondent
Royal Dutch Shell will cut up to $22bn from the value of its assets as the oil major warned coronavirus will deal a lasting blow to demand for energy products and the global economy.
The Anglo-Dutch group cut its oil and gas price outlook on Tuesday as it vowed to “adapt to ensure the business remains resilient”.
The company said as a result it predicts post-tax, non-cash impairment charges in the range of $15bn to $22bn in the second quarter. This will increase the group's gearing by 3 per cent.
Shell’s move follows a similar announcement by BP this month, indicating growing awareness among the biggest companies in the industry that tens of billions of dollars' worth of assets could be rendered uneconomic.
UK corporate morning news round-up
Housebuilder Redrow plans to scale back operations in London to focus on more profitable regional businesses on expectations that post-pandemic house buyers want more indoor and outdoor space, parks nearby and a good home office. It will provide impairment charges associated with the scaling back of its London business in its accounts for June.
Royal Dutch Shell will wipe off up to $22bn from the value of its assets as the energy major cuts its oil and gas price outlook, predicting the coronavirus pandemic will have a lasting impact on demand for energy products and the global economy.
Cineworld expects to reopen its cinemas in the UK and the US on July 31 to align with recent adjustments to the schedule of movies to be released. It is more than two weeks later than the date from which the UK government allows cinemas to reopen. Cineworld had planned to reopen in England by July 10.
InterContinental Hotels Group, which owns the Crowne Plaza and Holiday Inn brands, reported that revenue per average room was down 70 per cent in June, an improvement from the 82 per cent decline in April. Only 10 per cent of its hotels remain shut, IHG added.
Engineering conglomerate Smiths Group, which makes ventilators for the UK government, will restructure its business at a cash cost of £65m until the end of the next financial year for an annualised gain of £70m each year from 2022. Underlying revenue for the group was up 1 per cent in the period from February to May, helped by the pandemic driving increased critical care demand. The tailing off of non-coronavirus procedures held back revenues as the year progressed.
Package holiday provider On the Beach reported a £34.1m loss in the first half, after revenue dropped 66 per cent due to cancellations and a steep drop in demand for travel as the pandemic hit Europe.
Standard Life Aberdeen has appointed Stephen Bird to take over as chief executive from Keith Skeoch, who oversaw a 2017 merger that created the UK’s largest asset manager, valued at more than £11bn. The company has a current market capitalisation of £6.3bn.
Stocks mixed as traders assess upbeat China factory data
Global equities wavered on Tuesday as investors weighed upbeat data on China’s vast manufacturing sector.
European bourses hovered in a tight range leaving the continent-wide Stoxx 600 up 0.1 per cent in early dealings. London’s FTSE 100 slipped 0.3 per cent, with Wall Street’s S&P 500 futures off by a similar margin.
Royal Dutch Shell shares slipped about 2 per cent in London trading after the oil major said it would cut $22bn from the value of its assets, blaming the likely long-term impact of the pandemic on energy demand.
But investor sentiment overall was buoyed by a pick-up in activity at China’s factories, with the official manufacturing purchasing managers’ index beating economists’ predictions in June. Asian stocks were broadly higher following the news.
“The increase in PMI is consistent with a further expansion in industrial production in June in contrast with other countries in Asia,” said Mitul Kotecha, an emerging market strategist at TD Securities.
Traders cited an easing in the increase in US cases as a factor that bolstered market confidence, particularly on Wall Street, where the S&P 500 rallied 1.5 per cent on Monday.
French consumers splash out again on cars, shoes and furniture
Martin Arnold in Frankfurt
French people opened their wallets again in May, prompting consumer spending on goods to rise by 36.6 per cent as the country eased its coronavirus restrictions and shoppers returned to shoe shops, car showrooms and furniture outlets.
Household spending on transport equipment, such as cars, bicycles and trailers, more than trebled month-on-month, as did purchases of leather goods such as shoes and handbags, while sales of household durables such as furniture more than doubled.
The rebound in French household spending on goods in May followed two months of sharp declines as the strict lockdown imposed in March dragged the economy into a record postwar recession.
Overall household spending on goods remains 7.2 per cent below the pre-pandemic level of February, France’s national statistics office said on Tuesday, indicating that the economy still has some way to go before it returns to a normal level of consumer activity.
Falling prices of manufactured goods contributed to sharp drop in French inflation, which fell from 0.4 per cent in May to 0.1 per cent in June. Price growth slowed for services and food, while the fall in energy prices was slower in June and tobacco prices kept rising sharply.
High-frequency data indicators such as footfall and consumer spending suggest that the economic improvement across Europe is patchy and limited by social-distancing measures.
Visits to home furnishings and motor websites in June were running above last year’s levels across France, Germany and the UK, suggesting that consumers have become more interested in spending again.
But all major European shopping centres are still seeing footfall levels which are well under the norm, according to Financial Times analysis of Google Maps data. Cinemas are only just starting to reopen across Europe, while airline travel and hotel bookings are up slightly but remain far below pre-pandemic levels.
German restaurant visits approach pre-pandemic levels
German diners are showing a healthy appetite for eating out again as about a month into restaurants reopening in Europe's largest economy visits have almost returned to pre-coronavirus crisis levels.
On average over the past seven days, the number of diners was 2 per cent lower than a year ago, an analysis from Commerzbank of OpenTable figures shows, indicating that Germany will probably recover from the pandemic halt on its economy swifter than the rest of Europe.
The number of shoppers declined 10 per cent compared with the start of the year, Google data show, although public transport looks likely to take longer to recover to pre-pandemic levels.
Among countries in which OpenTable operates at scale, Australia is the only other one to stage a recovery in restaurant bookings and visits, while activity in the UK, the US, Mexico, Canada and Ireland remains subdued.
Start-up launches Japan's first clinical vaccine trials
Kana Inagaki in Tokyo
Biotech start-up AnGes has launched Japan’s first clinical trial in a government-backed effort to develop a homegrown coronavirus vaccine.
In a statement on Tuesday, AnGes said 30 people would be given the vaccine, which was developed jointly with Osaka University. The trial is expected to be completed by the end of July before being expanded later in the year.
The biotech group is developing a vaccine using DNA technology, a method that could yield quicker results and is said to be easier to mass produce than traditional vaccines. But DNA vaccines have yet to be approved for use in humans.
More than 100 coronavirus vaccines are in development worldwide as countries aim to reactivate their economies while preparing for the next wave of infections.
Deaths in England and Wales fall below 5-year average
Chris Giles and Naomi Rovnick in London
The number of deaths in England and Wales has fallen below the five-year average for the first time since March, the national statistics authority has said.
In the week to June 19, there were 9,339 deaths in the two UK nations, according to the Office for National Statistics.
This was 0.7 per cent below the five-year average, which is the first time this has happened since the week to March 13, just days before the government implemented strict lockdown measures, the ONS said.
The number of deaths in care homes and hospitals was also lower than the five-year average, although deaths at home were slightly higher.
The figures could provide a welcome boost for policymakers ahead of pubs, hotels and hairdressers being permitted to reopen on July 4.
But England's coronavirus transmission rate, measured by the R number that tracks how many people one person with the virus infects, remains at 0.7 to 0.9, according to the latest official figures. The government has also shown willingness to reinstate lockdowns in areas of high transmission, having just done so in the east Midlands city of Leicester.
The total level of excess deaths in the pandemic period across the whole of the UK stands at 65,243, just under one in every thousand people.
This number of excess death registrations is likely to be a modest underestimate of the number of excess deaths that occurred because there have been delays in registering deaths, especially when they have needed to go to coroners before registration.
But figures on death occurrences will not be complete until much later in 2020.
Eurozone inflation rebounds from 4-year low as energy prices rise
Martin Arnold in Frankfurt
Inflation in the eurozone accelerated more than most economists expected to a 0.3 per cent rate in June, as energy prices rebounded from recent lows and the price of food and industrial goods fell.
While price growth has rebounded from the four-year low of 0.1 per cent in May, it remains well below the European Central Bank’s core target of below but close to 2 per cent, indicating that its monetary stimulus is unlikely to end anytime soon.
Most economists believe prices are more likely to fall than to rise in the coming months even as the eurozone starts to recover from the record postwar recession caused by coronavirus lockdowns while central banks have flooded the economy with cheap money.
“Currently, inflation is influenced by two opposing factors,” said Christoph Weil, economist at Commerzbank. “On the one hand, supply bottlenecks caused by broken supply chains are driving up the prices of individual goods. On the other hand, weak demand is reducing companies' scope for pricing. Overall, the latter effect is currently dominating.”
Rebounding energy prices were the main reason for the rise in the inflation rate from 0.1 per cent in May to 0.3 per cent in June. Excluding energy, food, alcohol and tobacco, core inflation dipped from 0.9 per cent to 0.8 per cent. Analysts polled by Reuters had on average expected inflation in June of 0.2 per cent and core inflation of 0.8 per cent.
Germany’s plan to cut value added tax rates temporarily this year are expected to put further downward pressure on eurozone price growth in the second half of this year.
Isabel Schnabel, an ECB executive director, said in a speech at the weekend: “Inflation could remain at close to 0 per cent well into the next year, and even negative inflation rates are possible.”
Statistics authorities have warned that there is more uncertainty than usual over inflation data because of sharp falls in spending in certain areas, such as holidays, travel and entertainment and the difficulty of doing face-to-face surveys to collect price data during lockdowns.
Johnson outlines plan to 'build back better' from pandemic
The UK prime minister has unveiled plans to accelerate billions of pounds of infrastructure projects in the UK, saying that the coronavirus pandemic offers an opportunity “to be radical”.
The crisis is the moment to “build back better and to build back bolder”, Boris Johnson said in his first major speech to chart a course for recovery from the Covid-19 crisis.
“We cannot continue simply to be prisoners of this crisis,” he said. Mr Johnson was speaking in Dudley, a little over 40 miles from Leicester, which was put into the UK's first local lockdown this week to control a flare-up in coronavirus infections.
Among the projects mentioned, the prime minister said the government would invest in roads and rail projects, new homes, a school building programme and invest in towns “that felt left behind” including green buses and broadband.
But the FT has reported that the announcements will not mean a new stimulus for the economy, as they represent part of the money set aside for capital projects in this year’s Budget. Rishi Sunak, chancellor, will make a summer statement next week that will consider targeted measures for a stimulus.
The prime minister rooted his speech in the government’s plan to “level up” the economy and helping “neglected” and “unloved” parts of the country.
If we are to recover fully, if we are to deal with the coming economic aftershock then this Covid crisis is also the moment to address the problems in our country that we have failed to tackle for decades.
Jon Hart, an infrastructure partner at law firm Pinsent Masons, said:
These are big commitments with, on the face of it, some eye-catching procurement opportunities. There simply aren’t enough ‘shovel ready’ projects out there and it remains to be seen what this announcement will mean in practice.
You can read more on how Mr Johnson's big relaunch was overshadowed by events in Leicester here.
Lockdown easing reversed or postponed for 40% of US population
Lockdowns are tightening or their easing is on hold for about 40 per cent of the US population, as the world’s largest economy experiences a surge in virus cases after loosening restrictions.
More than a quarter of states in terms of population have begun tightening lockdown restrictions — which is likely to be higher after Arizona became the latest state on Monday to put its economy reopening in reverse — analysis by Goldman Sachs shows. Florida, Texas and California have also wound back restrictions on activity based on the investment bank’s standard.
Meanwhile, nine states including Nevada and Arkansas have postponed or put their lockdown on hold indefinitely, said Blake Taylor, an economist at Goldman. Some states moved to pause their reopening preemptively on Monday: New Jersey halted plans to allow indoor dining in restaurants and New York is weighing a similar pause.
None of South Carolina, Mississippi, and Georgia is meeting any of the federal criteria for reopening, such as the absence of crisis care at hospitals and a 14-day downward trajectory of symptoms and cases, Mr Taylor added.
Johnson pledges 8-year £12bn housebuilding plans
Jim Pickard in London
Boris Johnson has promised the most radical planning changes since the second world war but the property world will have to wait until later in July for the full details.
The UK prime minister outlined - in a press release - an eight-year £12bn affordable homes programme, pledged yet another review of government land and promised new regulations to allow the change of use of buildings without planning permission.
However he did not mention any of this in the speech he gave this morning in Dudley, about 40 miles from Leicester, which prompted the UK's first local lockdown after its coronavirus case count sparked a fresh outbreak .
In the written statement he vowed to give “total flexibility” for buildings to change use – for example from shops to homes – through reform of the “Use Classes Order” by September. Builders would no longer need a normal planning application to demolish and rebuild vacant buildings and turn them into homes.
In reality, however, the government has already made it easier to turn offices and shops into housing without full-scale planning permission through another device called a “permitted development right”.
The prime minister said his new “policy paper” sets out his strategy for “comprehensive” reform of England’s planning system.
More than 1m British businesses borrow £43bn via government schemes
Daniel Thomas in London
More than a million businesses have now been supported through the three government-backed coronavirus lending schemes, according to Treasury figures that show the scale of the problems caused by the pandemic for companies in the UK.
In just over three months, British businesses have borrowed almost £43bn from banks using bailout schemes that are mostly or entirely guaranteed by the government. The majority of this — at £29.5bn — has been lent under through the 'bounce back’ scheme, which offers loans with only light touch credit checks on borrowers among the UK’s smallest firms.
The latest figures suggest that one in six of the UK’s 5.9m private sector businesses have used one of the coronavirus lending schemes, according to UK Finance, which represents the banking industry.
The huge debts being taken by British businesses during the lockdown have sparked worries about whether these loans will be paid back as the economy gradually recovers from the pandemic.
The number of facilities approved solely under the three schemes is about 14 times higher than the average quarterly total of loans and overdrafts provided to SMEs in previous years.
UK museums and galleries outline plans for reopening next month
James Pickford in London
Museums and galleries across the UK on Tuesday unveiled their plans to reopen their doors to visitors as parts of Britain’s cultural sector emerge from lockdown.
Among the first to reopen are the National Gallery and the Royal Academy of Arts on July 8 and 9. The Whitechapel Gallery will open its doors on July 14, while Turner Contemporary in Margate will welcome visitors on July 22. Tate Modern, Tate Britain, Tate St Ives and Tate Liverpool will open on July 27.
Institutions will open under tightly controlled conditions, with most requiring timed entry booked online ahead of a visit, one-way systems with staff monitoring the flow of visitors, free masks and hand sanitizer, and transparent screens to protect front of house staff. Face coverings will be compulsory at the RA and recommended at the National Gallery.
Museums have had to adjust their exhibition programmes, which are typically arranged years in advance, postponing many shows until 2021 to manage the constraints of post-lockdown reopening.
Tate Modern, which had displayed Fons Americanus by Kara Walker, the “counter-memorial” to slavery, in its Turbine Hall as pictured above, was to have demolished and recycled the 13m tall sculpture in April. It will reopen with the monumental work.
Some big regional institutions, such as the Baltic Centre for Contemporary Art in Gateshead, the Ashmolean in Oxford and Manchester’s Whitworth gallery, will reopen in mid-August.
India extends emergency food support for hundreds of millions
Amy Kazmin in New Delhi
New Delhi will spend $12bn to provide free food grains to an estimated 800m Indians for another five months, as it seeks to avert the spectre of mass hunger as its economy languishes due to the coronavirus pandemic.
The move marks the extension of a three-month free-food support scheme that the government unveiled just days after Prime Minister Narendra Modi imposed one of the world’s most draconian coronavirus lockdowns, which resulted in an estimated 140m people losing their jobs overnight.
India’s lockdown has since eased. But with the coronavirus still spreading rapidly through the population, India’s economy is unlikely to rebound quickly, with many economists forecasting a contraction of about 5 percent this year.
Activists have raised the spectre of mass hunger among vulnerable families who have lost virtually all sources of income as a result of the lockdown, and have little prospect of finding new jobs amid the downturn.
However, New Delhi will continue to provide 5 kgs of free wheat or rice each month to 800m people through November, which will see many families though the peak festival season. Vulnerable families will also be given 1 kg of chickpeas each month as a source of protein.
India’s coronavirus caseload has surged to almost 570,000 confirmed cases, with the detection of almost 19,000 new case a day. Of those known to have been infected, almost 17,000 have died.
Leicester mayor sends out plea for help from government
The mayor of Leicester has urged fellow residents to stay at home and demanded government help as the city comes under "special restrictions" due to a revived coronavirus outbreak.
Peter Soulsby, mayor of the East Midlands city that has become the first local area to have a reinforced lockdown in the UK, said that local authorities, with help from the government, will need to discover where the virus is concentrated in the city and take measures to stop the spread of the virus.
The government has promised more testing, which in the past has been "patchy" and "certainly not systematic", Sir Peter said.
Leicester, about 100 miles north of London, was put under lockdown again last night after reports of a fresh outbreak of coronavirus. England is gradually reopening its economy, with the promise of restaurants, pubs, bars and hair salons being open for business on Saturday.
“With these new measures we can get on top of whatever it is out there very quickly," Sir Peter said in a briefing in Leicester on Tuesday." We hope that this is something we will now be able to ensure to put behind us as a city."
The city needed some "dramatic intervention" rather than continuing the status quo, he said. He added that he had received more detailed analysis that he wishes he had had "a long time ago".
He said: "I am very very concerned obviously about the impact of the wellbeing of the city, and the health of the city, but also about the economy of the city."
If Leicester is to be locked down and "in limbo" longer, he said, "we will need some support" from the government.
Chief BoE economist signals inflation fears as he hails rapid recovery
Chris Giles in London
The UK economy is recovering much faster than the Bank of England had expected, the central bank's chief economist said, casting doubt on the need for further stimulus.
The recovery is “so far, so-V [shaped]”, Andy Haldane said on Tuesday, explaining that he voted against pumping another £100bn of newly created money into the economy because the “upside news on demand had outweighed the other negative news on the outlook”.
Mr Haldane’s speech laid bare the tensions within the BoE between a desire to help the government in its drive to support the economy and protect jobs and its mandate to keep inflation under control.
In a minority of one on the nine-strong Monetary Policy Committee in its June meeting, Mr Haldane said the emerging data showing the deepest recession in many hundreds of years was “ancient history”.
He was concentrating on indicators that showed the recovery was significantly faster than the BoE had expected in its most recent forecast from May.
Women most affected by pandemic’s economic impact and care burden
Delphine Strauss in London
The coronavirus pandemic and its economic consequences threaten to wipe out progress on gender equality at work as women are at greater risk of losing their job, more likely to be exposed to infection and take on more of the burden of unpaid care, the International Labour Organization has said.
The UN agency on Tuesday increased its estimate of global working hours lost to the pandemic, largely due to the worsening health situation and economic conditions in the Americas.
Global working hours were 14 per cent lower in the second quarter than in the last quarter of 2019, the ILO said on Tuesday, which is equivalent to a loss of 400m full-time jobs. Workers in developing countries with high levels of informal employment were being hit much harder than in previous crises, the agency said.
Women faced a disproportionate impact: the decline in female employment in April and May was steeper than it was for men in countries where data were available, it said.
“We fear that the progress, modest as it has been, in gender equality . . . runs the risk of being reversed,” said Guy Ryder, the ILO’s director-general.
EU to exempt up to 15 countries from travel ban but not US
Michael Peel in Brussels
The US and almost 150 other countries have failed to make it on to the EU’s first batch of exemptions from a blanket pandemic ban on travel from outside the bloc.
EU member states agreed on Tuesday that they should start to lift the prohibition from July 1 for a maximum of 15 nations, including China, Japan, South Korea, Canada and Australia.
The other 10 countries on the list are Algeria, Georgia, Montenegro, Morocco, New Zealand, Rwanda, Serbia, Thailand, Tunisia and Uruguay. The exemptions will cover the EU and the largely overlapping Schengen common travel area.
The 15 have been chosen because they are deemed to qualify under a range of criteria, including trends in published pandemic infection rates and whether these are currently higher or lower than those in the EU’s 27 countries. China will be granted an exemption only if it lifts its ban on travellers from the EU.
The list is not legally binding and it is up to individual member states to implement it. It will be reviewed every two weeks.
Federal face mask mandate could prevent 5% hit to US GDP, Goldman says
A national face mask mandate could act as a substitute to renewed lockdowns that would otherwise deduct about 5 per cent from gross domestic product, Goldman Sachs analysts argue as a number of states in the US have paused or reversed easing measures in response to growth in coronavirus cases.
"We find that face masks are associated with significantly better coronavirus outcomes," according to Jan Hatzius, economist at Goldman Sachs. "Our baseline estimate is that a national mandate could raise the percentage of people who wear masks by 15 percentage points and cut the daily growth rate of confirmed cases by 1.0pp to 0.6 per cent."
Goldman said it analysed the impact of face mask mandates in 20 American states and the District of Columbia between April 8 and June 24, and data on mask usage from YouGov, and found that they raised the percentage of people who "always" or "frequently" wear masks by about 25pp in the 30 days after the order was signed. They estimate that a national mask mandate would increase usage by "statistically significant and economically large amounts" in states that currently do not require it.
Despite the rise in coronavirus cases, mask usage remains a political issue in the US and is voluntary in a number of states. Goldman found that mask usage is highest in the north-east, which was particularly hard hit by the pandemic, but where conditions have now improved, while the numbers are far lower in the south.
Arizona, Texas and Florida, which were among the first states to reopen and have seen a jump in coronavirus cases in recent weeks, have all reversed easing measures. Indeed, Goldman Sachs analysis found that reopenings have been delayed or reversed for about 40 per cent of the US population, which has raised fears about fresh lockdowns.
"Our analysis suggests that the economy could benefit significantly from such moves, especially when compared with the alternative of a return to broader lockdowns," Mr Hatzius said.
NY Fed president says 'sustained containment' of virus key to recovery
James Politi in Washington
John Williams, the president of the New York Fed, has warned that the US recovery was showing signs of slowing in parts of the country that were experiencing coronavirus surges, adding that “effective and sustained containment” of the disease was key to a strong rebound.
Speaking to the Institute of International Finance by video-link on Tuesday, Mr Williams said there were “signs that we may be past the worst of the extreme economic distress” caused by the virus and “early indications of a recovery have started to emerge” across the world’s largest economy.
But he said that the “recent surge in cases in some states”, which include California, Arizona, Texas and Florida, showed that “much is still unknown about how the pandemic will play out in the months ahead”.
“We are seeing some indications of a slowing in the pace of recovery in states that are currently experiencing large-scale outbreaks,” Mr Williams said. “This is a valuable reminder that the economy’s fate is inextricably linked to the path of the virus. A strong economic recovery depends on effective and sustained containment of Covid-19,” he added.
Mr Williams’s comments came as Jay Powell, the Fed chair, prepared to address the House financial services committee along with Steven Mnuchin, the US Treasury secretary, on the economic response to the crisis. In his prepared remarks, Mr Powell had also noted that the economic rebound had begun earlier than the Fed had anticipated, but said that it was crucial to “keep the virus in check” as one of the main challenges during this phase.
Although the Fed is anticipating a long and painful recovery from the pandemic, Mr Williams suggested that it remained possible for the US economy to avoid major structural damage – and conditions could eventually still return to where they were at the beginning of the year.
“One measure of success is a return to the sustained growth and historically low unemployment that we had attained before the pandemic. I know this seems a long way from where we are today and may seem unreachable during these darkest days of the recession. But history teaches us that the economy can get back to full strength, even after deep downturns,” he said.
CDC director urges Americans to wear masks as US cases mount
Demetri Sevastopulo in Washington
Robert Redfield, head of the Centers for Disease Control and Prevention, called on Americans to wear face masks as states from Florida to Arizona record surges in Covid-19 cases that have heightened concerns about the pandemic.
“It is critical that we all take the personal responsibility to slow the transmission of Covid-19 and embrace the universal use of face coverings,” Mr Redfield told lawmakers on Tuesday at a Senate health committee hearing.
The call for Americans, and particularly younger people, to wear masks and follow social distancing guidelines comes as some states in the south and southwest have been forced to reverse course on easing their lockdowns.
Mr Redfield was testifying as the US coronavirus death toll nears 130,000, according to Johns Hopkins University. His comments also come as a number of states, particularly in the south and southwest, have reversed course on easing lockdowns after a surge in cases renewed concerns that the US is struggling to tackle the pandemic.
The Republican governor of Arizona on Monday ordered the closure of bars, gyms and cinemas for at least one month after the state saw one of the worst outbreaks of the virus in the US. That reversal followed similar moves in Florida and Texas, which were spared the worst of the virus earlier this year, but have recently become hotspots.
New York and New Jersey, the two states that were hit hardest when the pandemic struck in March, are also re-examining their response in the wake of rising cases across much of the US.
Lamar Alexander, the Republican chair of the Senate health committee, urged Americans to wear masks. The call for people to wear protective masks comes as critics have assailed President Donald Trump for refusing to wear one, which some claim has reduced the pressure on some of his supporters to follow the guideline.
Africa Cup of Nations delayed to 2022
The biennial football tournament between Africa’s top national teams has been delayed by a year to January 2022 in a sign of the spillover of event cancellations and postponements into next year due to the pandemic.
The 24-team Africa Cup of Nations was scheduled to take place in Cameroon at the beginning of 2021 but the Confederation of African Football decided to delay it a year as a result of coronavirus.
The African football governing body did not announce whether the subsequent edition of the tournament planned for 2023 in Ivory Coast will go ahead, be postponed or cancelled. The women’s edition of the tournament has been cancelled but a new continental club competition for women’s football will be launched next year, it said.
It is not the first time that the competition has been disrupted by the outbreak of a disease after Equatorial Guinea hosted the 2015 finals in place of Morocco, who had asked for it to be pushed back because of fears about Ebola.
Fauci and CDC director Redfield question American Airlines seat policy
Demetri Sevastopulo in Washington
Anthony Fauci and Robert Redfield questioned the recent decision by American Airlines to stop keeping the middle seat of flights empty, as the carrier tries to increase passenger loads.
“That is something that is of concern,” Mr Fauci, the head of the US National Institute of Allergy and Infectious Diseases, said, in response to Vermont senator Bernie Sanders who asked why the administration had not tried to stop the move.
Mr Redfield, head of the Centers for Disease Control and Prevention, said the issue was not “under critical review”, but said his agency was disappointed with the airline.
“When they announced that ... obviously there was substantial disappointment with American Airlines,” Mr Redfield said. “We don't think it's the right message.”
Swedish PM launches inquiry to probe pandemic response
Ben Hall, Europe editor
The Swedish government has appointed a commission to investigate the country’s handling of the coronavirus pandemic amid mounting criticism of its liberal approach and higher death rate compared to its Nordic neighbours.
Stefan Lofven, Sweden’s centre-left prime minister, launched the inquiry on Tuesday following pressure from opposition politicians. Public opinion has begun to turn against Sweden’s light-touch restrictions in recent weeks as its death toll climbed well beyond that of its neighbours and they in turn kept their borders with Sweden shut while opening up to visitors from elsewhere.
Sweden adopted a markedly different approach to the rest of Europe by maintaining as much economic and social activity as possible and relying on voluntary social distancing and home-working rather than strict lockdown measures to contain the virus.
But by June 29 its death toll had reach 5,310, compared with 604 in Denmark, 328 in Finland and 249 in Norway. Its rolling seven-day average of new cases stands at more than 1200 a day. Denmark’s is 32.
The commission of inquiry will be composed of medical experts, ethicists and economists and will be led by Mats Melin, a former president of Sweden’s supreme administrative court. The government had wanted it to include politicians although that proposal was dropped.
It will issue a first report later this year focusing on the spread of the virus in care homes, an interim study next year and a final full report in early 2022, before the next general election.
Easyjet to cut up to 727 pilot jobs
Tanya Powley in London
EasyJet has outlined plans to cut as many as 727 pilot jobs in the UK as well as potentially closing its aircraft bases at Stansted, Southend and Newcastle airports.
It comes as the low-cost airline on Tuesday started a formal consultation with its unions, Unite and Balpa, over plans to cut up to 1,900 jobs in the UK. Last month, it became the latest carrier to announce job reductions, which could see it axe up to 4,500 jobs across its 15,000-strong workforce.
Balpa, the UK pilot union, hit out at easyJet’s plan to cut almost a third of its 2,300 British pilots.
Brian Strutton, Balpa general secretary, said:
We know that aviation is in the midst of the COVID crisis and we had been expecting easyJet to make an announcement of temporary measures to help the airline through to recovery.
But this seems an excessive over-reaction and easyJet won’t find a supply of pilots waiting to come back when the recovery takes place over the next two years.”
Johan Lundgren, chief executive at easyJet, said:
Unfortunately the lower demand environment means we need fewer aircraft and have less opportunity for work for our people - we are committed to working constructively with our employee representatives across the network with the aim of minimising job losses as far as possible.
Arizona's new case count jumps above 4,600 after including delayed data
Arizona reported its biggest one-day jump in new coronavirus cases after including a batch of delayed tests, and in the wake of governor Doug Ducey's decision to reverse his state's reopening process.
A further 4,682 people tested positive for Covid-19 over the past 24 hours, the state's health department reported on Tuesday, a record one-day leap, with a record 23,471 tests conducted.
Some of this was catch-up from Monday, when officials reported 625 new cases. This low number was a result of one lab partner missing the daily deadline to submit results, the health department said yesterday, and those figures would be added to Tuesday's count.
Including the latest data, Arizona has averaged about 3,000 new cases a day for the past week.
Florida reported 6,012 new cases over the past day, up from 5,404 on Monday, the state health department said on Tuesday morning, and below a record of almost 9,600 on June 27.
Late on Monday, Mr Ducey ordered bars, gyms, cinemas and water parks across the state to close and pushed back the planned start date for schools, effectively throwing Arizona's reopening plans into reverse. He did not make the wearing of face coverings mandatory, and again strongly encouraged the practice.
Arizona joined a growing list of states across the south and west of the US to either reverse or pause reopening plans. On Monday, Tennessee and Georgia both extended their state of emergency orders to August 29 and August 11, respectively. Last week, Texas and Florida reversed their reopenings and ordered bars to close, while North Carolina and Louisiana hit the pause button and said they would not move to their next phases.
Chances of default by US oil and gas producers surges
Myles McCormick in London
The likelihood of US oil and gas producers defaulting on their debt has jumped 30 per cent over the past year as the industry continues to reel in the wake of the oil price crash.
A new report by Credit Benchmark suggests credit quality in the sector has slumped 19.3 per cent over the past two months and 29.6 per cent over the past year as producers struggle to turn a profit in the weaker price environment.
The coronavirus pandemic coupled with a price war between Russia and Saudi Arabia sent US benchmark oil prices plunging into negative territory in April. They have now recovered to about $40 a barrel, but remain down by about a third since the beginning of the year and below levels required by most producers to drill new wells.
“Credit quality for large US oil & gas firms continues to tank,” the report found. “Once again, this sector is seeing one of the most significant declines of all those tracked by Credit Benchmark, with deterioration picking up significantly in the last two months.”
The oil price crash has led to a spate of bankruptcies among producers, with shale pioneer Chesapeake Energy last weekend becoming the biggest casualty.
Daily case rates for 16 US states more than doubled in June
The rate of daily coronavirus cases has at least doubled during June for nearly one-third of all US states, highlighting the renewed spread of the virus through the west and south that has prompted some governors to reverse or pause their economic reopening plans.
Among the 37 states where the seven-day average of new cases was above 100 as of June 29, 16 have case rates that are at least double what they were on May 31, according to Financial Times analysis of Covid Tracking Project data.
Florida experienced the biggest increase and is now averaging about 6,600 new cases a day, compared with about 760 a month ago.
That daily rate also beats other populous states like Texas and California, which are averaging nearly 5,500 new cases a day and have had their case rates go up by 327 per cent and 115 per cent, respectively, since May 31.
Arizona, Georgia, North Carolina and South Carolina are the only other states averaging more than 1,000 cases a day, but with North Carolina the only one of those where the average case rate has not doubled in June.
Some states like Idaho, Oklahoma and Oregon have experienced very large increases in daily rates, albeit from low bases, and have yet to report a single day increase of 1,000 or more at any time during the pandemic. States like Nevada and Tennessee have started to report four-digit daily increases in recent days, despite their average still remaining below the milestone.
Among states with an average daily rate of new cases above 100, 12 have experienced declines over the past month.
New Jersey has had the biggest decline over the past month, with its average new case down by 70 per cent over the period. New York, which was the early hot spot for the virus in the US, has seen its daily case rate more than halve.
US stocks nab best quarter since 1998
Adam Samson and Bryce Elder in London
Wall Street recorded the best quarter in more than two decades amid a broad rally in global markets ignited by a barrage of central bank stimulus and hopes of a forceful economic recovery.
The S&P 500 rose 1.5 per cent on Tuesday, the final trading day of the quarter and has soared more than 20 per cent over the past three months, leaving it on track to notch the largest rise since the final quarter of 1998.
Stimulus measures announced by central banks around the world, including a series of interventions by the US Federal Reserve to soothe unsteady markets, helped lift stocks in April, said Max Kettner, strategist at HSBC. Rising hopes for a rapid recovery in major economies helped keep the momentum going later in the quarter, he said.
“Equities rebounded significantly in the second quarter with more than three-quarters of the losses in [the] first quarter already recovered,” he said.
Still, many investors remain cautious given the uncertain trajectory of the coronavirus pandemic and questions over how quickly major economies will recover from the acute shock. The US, the world’s biggest developed market, has remained a source of particular concern given the severe Covid-19 outbreaks in several states.
FedEx results top view boosted by home deliveries
Parcel delivery company FedEx reported better than expected results in a quarter that was "severely affected" by the coronavirus pandemic helped by a surge in ecommerce deliveries as people worked from home during lockdowns.
FedEx, which is typically regarded as a bellwether for global economic activity, said revenues slid 2 per cent from a year ago to $17.4bn in the fourth quarter. However, that exceeded analysts' expectations for $16.4bn.
Fedex shares rose 9 per cent in after-hours trade to $153.37.
"Virtually all revenue and expense line items were affected by the Covid-19 pandemic during the quarter," said chief executive Frederick Smith. "While commercial volumes were down significantly due to business closures across the globe, there were surges in residential deliveries at FedEx Ground and in transpacific and charter flights at FedEx Express, which required incremental costs to serve."
The Memphis, Tennessee-based company reported a loss of $334m, compared with a loss of $1.97bn in the year ago quarter, which included a large accounting charge. Adjusting for one-time items, the company reported earnings of $663m or $2.53 a share, down from $1.32bn or $5.01 a share in the year ago quarter. That topped expectations for $1.52.
FedEx said its operating costs climbed by about $125m as it spent on personal protective equipment and medical and safety supplies.
The company did not provide an outlook for fiscal 2021 as it said the near term outlook is "unclear" but added that it expects to "benefit from the global recovery". FedEx also said it would lower its capital expenditures by $1bn to $4.9bn.
FedEx shares were down 7 per cent year-to-date as of Tuesday's close.
Greece re-opens airports, ferry routes and road borders for tourists
Kerin Hope in Athens
Greece re-opens its 27 airports to direct international flights on Wednesday as the Mediterranean tourist season gets underway three months later than usual because of coronavirus lockdowns across the region.
Tourists from EU member-states plus 15 other countries, including Australia, New Zealand, Japan and South Korea, will all be welcome, a government spokesman said on Tuesday.
But visitors from Sweden, the UK and Turkey will be excluded at least until July 15, he added.
Greece will also remain closed to tourists from the US, Russia and China, the highest per capita spenders among visitors to the country.
Passenger ferries will resume operating between Italy and the Greek ports of Patras and Igoumenitsa, but only one border crossing - with Bulgaria - will be open to tourists travelling by road from central Europe.
Greece’s success to date at containing coronavirus is expected to help rescue the tourism sector this season, but it has also sparked fears of visitors importing infections.
There are no quarantine regulations, but visitors must fill out an online “passenger locator form” 48 hours before they travel to Greece, giving details of their planned destination and where they intend to stay.
Greek health authorities plan to carry out up to 8,000 random tests daily at entry points to the country. Visitors diagnosed with Covid-19 will be isolated for 14 days at one of more than 50 “quarantine” hotels around the country.
Around 200 extra doctors will be on call at tourist resorts, while the civil protection agency has set up a network of coastguard speedboats and helicopters to ferry Covid-19 patients to an intensive care unit from anywhere in the country within three hours.
Record increase for Texas propels daily US case count above 44,000
The US reported a near-record number of new coronavirus cases on Tuesday, marking the fourth time in five days the increase has topped 42,000.
A further 44,358 people in the US tested positive over the past 24 hours, according to data compiled by the Covid Tracking Project, up from almost 36,500 on Monday.
That level is just 15 cases shy of a record one-day increase on June 26, but also means the daily case rate in the US has more than doubled since May 31, when 21,672 people tested positive.
The data come in the wake of a warning today from Anthony Fauci, a member of the White House's coronavirus task force, that the US could see new cases soar to 100,000 a day.
Texas reported a record daily increase of 6,975 new cases, just days after governor Greg Abbott reversed the state's reopening and ordered bars to close.
California, where only some bars in certain counties have been ordered to close, reported a further 6,367 cases.
Florida's tally rose by 6,093. Bars across the latter state were ordered on Friday to close owing to the surge in new cases, which have risen more than 800 per cent since the end of May.
A handful of other states variously responded to their rising case numbers. Virginia is set to move into the third phase of its reopening on Wednesday, but governor Ralph Northam announced this afternoon that bar areas inside restaurants and taverns would not be part of that next step.
This followed a similar move by Delaware governor John Carney who today said that bars at its popular beaches must be closed from July 3 and that the state would not move ahead with any additional reopening.
Arizona's increase of 4,682 was a one-day record for the state, but was boosted by a batch of data that was too late for Monday's count. Georgia (1,874), South Carolina (1,755, a record), Tennessee (1,212), North Carolina (1,186) and Louisiana (1,014) were the other states that reported increases of more than 1,000.
Rounding out the six states to report record increases were Oklahoma (585), Idaho (433) and Alaska (36), according to Financial Times analysis of Covid Tracking Project data.
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