By Powerscourt on 11/07/2020
The US continues to hit record numbers with 66,645 people testing positive for coronavirus on Friday, beating the previous records set on Thursday and Friday.
President Trump, whose re-election is tangled up in the story, insists that the increased cases are simply due to more and better testing. However, the story from the front line is not good. The Washington Post reports that mortality is increasing sharply. The Post reports that Texas, Arizona and South Carolina have all seen death tolls double in the past four weeks. It reports that deaths dropped from 2,000 a day, a total reached several times in April and May, to a low of 217 on July 5 before increasing to 800 for each of the past four days.
Numbers being treated in hospitals seem alarmingly high. Florida reported 6,974 are hospitalised with the virus, according to the COVID Tracking Project which is a rich source for readers of this wrap (covidtracking.com). It reports that 10,000 people are hospitalised in Texas and almost 8,000 in California. Greg Abbott, Governor of Texas, having made masks mandatory (albeit with local opt-outs), did a round of television interviews advocating masks and warning of bad days to come.
Concerns about the surging numbers have led to much soul searching on reopening of the US. The Mayor of Atlanta is so concerned about the surge that she wants to go back to lockdown but the Governor of Georgia is firmly opposed. San Francisco announced late Friday that it was postponing Monday’s planned reopening of businesses offering personal services (e.g. haircuts, manicures).
Equity investors continue to peer through the gloom and see opportunities. They may also be encouraged by good news about potential treatments and vaccines. And driven by uniquely low interest rates. The Dow Jones Industrial Average closed up 1.4% while Nasdaq, home of the tech giants, rose 0.7% to yet another record.
Bloomberg reports from Wuhan, the Chinese city where the virus first struck. It hasn’t had a new case since May but economic activity is still was down on 2019.
Japan has allowed spectators back to sports events, sort of. It allows a maximum of 5,000 attendees which means professional baseball returned Friday night to stadiam that were 90% empty. The fans were masked and nervous.
Boris Johnson wants to lead the fight back to the new normal in the UK. He was pictured wearing a mask for the first time on Friday, a contrast to his slightly cavalier approach in the early days of the crisis. According to the Daily Mail, he and Rishi Sunak, his Chancellor, are appalled at the impact on the economy of empty offices and the knock-on impact on small businesses. He will advocate less homeworking and more office time. He has already told senior civil servants that he wants them back at their desks, saying it is more efficient and productive than working from home.
WHAT ARE COMPANIES SAYING?
Industrials & Transport
John Holland-Kaye told the Financial Times the aviation industry needs to prepare itself for periodic lockdowns around the world as countries are hit by new coronavirus outbreaks. He said the airport was considering a range of possible responses as new infections swept across cities previously thought to have brought the pandemic under control, such as Australia which was put into lockdown for six weeks.
Carnival Corporation & plc announced its three and six months results of operations in its earnings release yesterday. It announced in total 13 ships expected to leave the fleet represent a nearly nine percent reduction in current capacity. It added these are ships that were previously expected to leave the fleet in coming years, the company said, in a press release. Arnold Donald, chief executive of Carnival Corporationit said itwould emerge from the Covid-19 pandemic a “leaner, more efficient company.”
The Times reported that the operator of the Frankie & Benny’s and Wagamama restaurant is to delay the reopening of 10 per cent of its outlets which equates to 40 sites until next year in the hope shopper visits in the predominantly airport locations will pick up. The Group, which has been through a painful restructuring, announced the start of a phased reopening of its 400 remaining sites that will have the first 25 per cent running by the end of this month, rising to 60 per cent by the end of next month.
Financials & Real Estate
Sir Lloyd Dorfman, the founder of Travelex, has demonstrated his “great faith” in London’s office market by buying a £40 million building according to The Times. The currency exchange boss invested in an office block and theatre in a big new development above Tottenham Court Road station. “Despite these challenging times, I have great faith in the future of the office market in central London,” Sir Lloyd said. He predicted that the pandemic would lead to “even greater demand for flexible office space” with “even more people looking for the best space in strategic locations”.
Emma Walmsley, the CEO of Glaxosmithkline has warned that drug companies must overcome a systemic industry issue to combat the rising threat of antibiotic-resistant infections. The Times reported she said that there was limited funding for research “because the market doesn’t reflect the value antibiotics deliver to society and therefore doesn’t incentivise investment”.
IN THE NEWS
Treasury yields hit two-month lows in jittery week – Financial Times
‘Wear masks in shops,’ Boris Johnson tells Britain – The Times
As Rishi Sunak keeps rising, civil service braces for turmoil – The Times