By Powerscourt on 09/05/2020
Powerscourt Coronavirus Briefing – 09 May 2020
Yesterday’s special holiday marking the 75th anniversary of VE Day had been expected to be a proud celebration of the sacrifices, courage and achievements of the past – just what the doctor might order for a newish government facing into the final steps of Brexit.
Instead, we had Queen Elizabeth urging Britain to “never give up, never despair” in a televised message that wove together the themes of wartime deliverance and the coronavirus lockdown, to mark the 75th anniversary of VE Day. Celebrations were very subdued, though the Queen offered a different spin, saying “our streets are not empty; they are filled with the love and the care that we have for each other.”
The White House has confirmed the press secretary to Vice President Mike Pence has coronavirus, making her the second person who works there to test positive this week, raising fears the virus will spread through the heart of the Trump government.
The US stock market rally continued, dispute the dire jobs data with stocks now “de-coupling” from the economy. As data showed unemployment close to 15%, Great Depression levels, the S&P 500 climbed nearly 2%, to take it back to pre-COVID levels, while the Nasdaq is near all-time highs.
Closer to home, media speculation continues about the timing and shape of an ease to lockdown. There are reports commuters could be asked to book a slot at railway stations through their smartphones to stop overcrowding. Boris Johnson in his Sunday night address is also expected to recommend the use of facemasks for staff who are required back at work.
In a call with business leaders on Friday, Business Secretary Alok Sharma indicated the furlough scheme could be phased out gradually over the summer rather than end abruptly in June as planned, while also bringing in greater flexibility to allow some workers to return part-time. But once again, there is no clarity over this.
Mixed messaging and continued negative data around the UK’s handling of the virus (there are now reports the Government will introduce a 2 week quarantine for all people arriving in the UK from any country apart from the Republic of Ireland) means high anxiety for some clarity from the Prime Minster tomorrow night.
Some good news however – it is now widely expected garden centres will open in England from next Wednesday, while those in Wales opened yesterday.
WHAT ARE COMPANIES SAYING?
Consumer and Retail
The electronic cigarette maker has slashed its internal valuation by 35% to roughly $13 billion. This comes days after the company outlined plans to cut 900 positions, representing around a third of its workforce. Chief Executive Officer K.C. Crosthwaite described the results of the company’s quarterly evaluation in an internal email to employees, in which he attributed the lower valuation to volatility in public markets and new financial projections in the U.S. and overseas.
The City is expecting the supermarket chain to report on Tuesday that like-for-like sales have risen between 4 and 4.5 per cent in the first quarter, with Chief Executive David Potts discussing how its factories and supply chain have responded to changing demand during the coronavirus crisis. The group is expected to warn that profits will be broadly neutral this year, due to the costs of recruiting 15,000 extra workers, introducing safety measures and paying sick pay and bonuses. It is thought that Morrisons will benefit from about £260 million in business rates relief.
Industrials & Transport
Toyota Motor Europe
The Japanese car manufacturer has announced that it will restart its UK engine plant next week, making it the latest carmaker in Britain to resume operations. Staff will return to the engine plant, based in Deeside in Wales, from Monday with production commencing on Wednesday. The group shared that it has introduced a range of measures to allow staff to work safely, including temperature checks, the wearing of face masks, and working practices that allow for social distancing. The company’s facility in Burnaston in Derbyshire will remain closed for the time being, with a restart date due to be announced in the coming weeks.
The German industrials group reported a 64 per cent drop in shareholders’ net profits for the second quarter yesterday, as Chief Executive Joe Kaeser said that the group expected to “reach the bottom” by the end of next month. The company shared that all of its business lines were affected by the coronavirus as group orders fell 8 per cent. Its shares rose by almost 5 per cent however, on the news that the company is speeding up cost savings to tackle the downturn, and the flotation of its energy business remains on track.
Honda Motor Co
The automaker said yesterday that it will be gradually resuming operations at US and Canadian auto plants from 11 May, having suspended production on 23 March. It is also recalling all salaried and support associates who have been on furlough. A number of new safety requirements will be imposed, including temperature checks.
The technology company has announced that the majority of its employees could work from home until 2021. Chief Executive Sundar Pichai reportedly told employees on Thursday that those who need to return to the office will start being able to do so from July with enhanced safety measures in place, while most of the workforce who can carry out their jobs from home will be able to do so until the end of this year, and possibly into next year.
The social media giant announced on Friday that it would allow its workers who are able to work remotely to do so until the end of the year as stay-at-home orders are extended by governments worldwide. The company also shared that it expects most offices to stay closed until July 6, according to a company spokesperson.
IN THE NEWS
Government eyes flexible furlough extension to get Britain back to work – Financial Times
Coronavirus: all UK arrivals to spend two weeks in quarantine – The Times
Lockdown wipes out 10 years of US jobs in weeks – The Times