Coronavirus: US death toll tops 42,000 — as it happened

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US toll nears 40,000 with record daily deaths in New Jersey and Michigan

Peter Wells in New York

The US saw its highest daily increase in coronavirus deaths over a 24-hour period, pushing the total number of fatalities since the outbreak began to just shy of 40,000.

A further 2,674 people died in the past day, according to data compiled by the Covid Tracking Project on Tuesday, taking the total number of deaths to 39,995.

New Jersey and Michigan, the states with the highest total fatalities after New York, both reported that new deaths increased by daily records, of 376 and 232, respectively. That took their totals to 4,753 and 2,700.

The national divide about how soon to reopen state economies has been particularly visible in Michigan. Dozens of residents last week took to the streets of the capital, Lansing, to voice their displeasure with the state’s lockdown order that is due to expire on April 30. Gretchen Whitmer, the state’s Democratic governor, has indicated that she hopes to take some steps towards reopening the state from May 1, and could detail a plan later this week.

New York, the hardest-hit state, reported 481 new deaths over the past 24 hours, taking its total to 14,828.

There have been 799,717 reported cases of coronavirus in the US, according to Covid Tracking Project data.

Figures from Johns Hopkins University put the US death toll at 44,228 as of Tuesday afternoon.

Pakistan’s Prime Minister Imran Khan to be tested for coronavirus

Farhan Bokhari in Islamabad

Pakistan’s prime minister Imran Khan will undergo a test for coronavirus after he met with the head of a charity who later tested positive for the virus, a senior official said on Tuesday.

Faisal Edhi who heads the Edhi foundation, one of Pakistan’s largest charities met with Mr Khan in Islamabad last week, to hand over a cheque from collections raised to support the country’s fight against disease. The government released a picture after the meeting in which neither of the two men were wearing masks or disposable gloves.

Doctor Faisal Sultan, a widely respected specialist in infectious diseases who was recently appointed to spearhead Pakistan’s fight against Covid-19, said late on Tuesday that Mr Khan had accepted advice to be tested. Mr Khan would become the highest profile Pakistani to volunteer for testing.

On Saturday, Mr Khan’s government and Islamic clerics reached a controversial agreement that allows Muslims to participate in Taraweeh prayers during Ramadan, which begins in less than a week.

Although the agreement requires worshippers to stand two metres apart, critics say that enforcing its provisions would be a difficult task for the government.

Asia-Pacific equities open lower as oil weakness hits stocks

Asia-Pacific stocks dropped at the open on Wednesday as this week’s historic move in oil prices continued to sap risk appetite across global equity markets.

Japan’s Topix index edged down 0.6 per cent, while in South Korea the Kopsi fell 1.1 per cent. In Sydney, the S&P 200/ASX opened 1.9 per cent lower.

The S&P 500 lost 3.1 per cent on Tuesday. The West Texas Intermediate benchmark oil price for May delivery fell below zero on Monday, ahead of the contract’s expiry yesterday.

On Tuesday, the chaos in oil markets continued, with Brent crude, the global benchmark, falling below $20 a barrel for the first time in 18 years.

Here’s some of the latest developments you might have missed

Mexico’s central bank is providing a 750bn peso ($31bn) shot in the arm for the ailing economy — equivalent to 3.3 per cent of last year’s GDP.

Fiat Chrysler has drawn down €6.25bn from its credit lines, becoming the latest carmaker to increase its debt as coronavirus upends its global operations.

Texas Instruments said it is using the 2008 financial crisis to model its outlook for the current quarter as it has “reduced visibility of customer demand” amid the coronavirus pandemic.

Spain will allow children to go for walks. The government shifted course after a torrent of criticism and ended what will have been six weeks of confinement at home.

The Dutch government has announced a gradual relaxation of the country’s lockdown, beginning with the partial reopening of primary schools next month.

The top US independent oil and gas producers have asked senior White House officials to hold China to its commitments to buy crude oil in the trade deal struck in January to alleviate pressure on the sector, saying Beijing was giving preference to energy purchases from Saudi Arabia and Russia instead.

Northern EU member states are ready to quash a bid from Spain and its allies for the EU to raise debt and hand the money out in grants to crisis-struck member states, as battle lines form ahead of a key summit on Thursday.

The most senior civil servant in the Foreign Office has said that the UK made a “political decision” not to take part in an EU-wide procurement scheme for PPE and ventilators.

New York will reopen its economy on a regional basis, opening the door for some parts of the state that have been less affected by coronavirus to begin the gradual return to normality sooner than other hard-hit areas.

China reports 30 new cases of coronavirus

Health authorities in China reported 30 new cases of the coronavirus to the end of Tuesday.

Seven of the infections were locally transmitted and were all in Heilongjiang, where recent fears of a second outbreak have led to new lockdown measures in the province.

The remaining 23 cases were in people who had returned from overseas. The total number of confirmed cases in China since the outbreak began is now 82,788.

Donald Trump demands Harvard returns US federal aid funds

James Fontanella-Khan, Aziza Kasumov and Ortenca Aliaj in New York

Donald Trump says Harvard must pay back $9m in coronavirus federal aid days after the Ivy League college received rescue funds despite having the world’s largest endowment with more than $40bn in assets.

“I don’t like when Harvard, that I think [has a] $40bn endowment or some incredible amount of money, that Harvard gets this money  . . . I want Harvard to pay the money back,” the US president said at a White House press briefing on Tuesday. “This is meant for workers. This isn’t meant for one of the richest institutions.”

The US government has allocated $14bn to US universities as part of its Coronavirus Aid, Relief and Economic Security Act to support lower-income students in higher education. It has separately distributed $350bn in emergency cash to small businesses through its Paycheck Protection Program but its execution has come under criticism with small businesses claiming they were elbowed out by larger companies and chains.

America’s elite universities — including Yale, Stanford and Princeton — have come under attack from policymakers, philanthropists and business leaders this week for taking millions of dollars in taxpayers’ money.

Read more here

Australia plans to reopen Bondi beach

Jamie Smyth in Sydney

Australian authorities plan to reopen Bondi beach in Sydney next week amid signs the spread of the coronavirus is being successfully suppressed. Infection rates have fallen below 0.5 per cent over recent days.

Local authorities in Sydney said on Wednesday the iconic, crescent shaped beach would reopen next Tuesday following a month’s closure that was ordered when thousands of local people and tourists gathered in contravention of social distancing restrictions.

Several other beaches in Sydney’s eastern suburbs will reopen next week for exercise — walking, running, swimming and surfing. However, gathering in large groups and sun bathing will continued to be banned and people are advised to stay at least 1.5m away from other people as they exercise, according to Waverley Council.

Australia is also loosening restrictions on health and education services from next week as the rate of coronavirus infections falls below 0.5 per cent. On Wednesday health authorities said there had been 22 new infections identified in the previous 24 hours, bringing the total number of confirmed cases to 6,647.

Of those, 74 have died and 4,291 have been reported as recovered from Covid-19. More than 444,000 tests have been conducted across Australia.

China to expand welfare support to migrant workers

Christian Shepherd in Beijing

China has promised to give welfare support to millions of migrant workers who have lost income due to coronavirus but who previously fell outside the country’s social security safety net.

Migrant workers who do not have unemployment insurance will for the first time be able to claim dibao, or “subsistence allowance”, the state council, China’s cabinet, announced on Tuesday, adding that the benefit would also be extended to others who have not been covered by official insurance programmes.

Some migrant worker families already claim dibao, but the state council’s announcement indicates the payment will be extended.

Major state-backed construction projects will also be encouraged to hire more workers, with the portion of investment that can be directed towards hiring expanded to 15 per cent from 10 per cent, the state council said.

Layoffs from coronavirus-induced lockdowns pushed China’s official urban unemployment rate to a record high of 6.2 per cent in February. It dropped back down to 5.9 per cent in March, but some economists believe the real rate is higher.

China’s ministry of human resources and social insurance said on Tuesday that the impact of Covid-19 on employment for China’s 290m migrant workers had been larger and more direct than on any other group, with only 170m currently able to travel to take up jobs. China’s working age population totals 900m.

Indian industrialists warn over punitive new rules on worker infections

Amy Kazmin in New Delhi

Indian industrialists have warned that rules making employers criminally liable if any of their workers are infected with coronavirus will discourage companies from resuming business operations, raising doubts about India’s ability to restart its stalled economy after a draconian lockdown.

This week, Prime Minister Narendra Modi’s government took the first tentative steps towards restarting an economy that has been effectively suspended since March 22.

Since Monday, some manufacturers have been permitted to resume operations, provided that they were not located in areas deemed coronavirus hotspots, and could ensure proper social distancing of workers.

But the guidelines issued by India’s ministry of home affairs for the restart of manufacturing state that company directors and management could be subject to criminal prosecution if any workers later test positive for coronavirus.

Business leaders have called the rules “harsh”, saying they will be a strong deterrent to any industrial restart, and could weigh heavily on an already distressed economy. Only a tiny fraction of industries have resumed operations, despite the relaxation on Monday.

India’s coronavirus confirmed coronavirus caseload has crossed 20,000, representing a doubling of the caseload over the last eight days. Of those, 643 people have died, and nearly 4,000 have recovered. The current lockdown is due to end on May 3.

South Korea boosts virus support to nearly $200bn as crisis worsens

By Song Jung-a in Seoul and Edward White in Wellington

South Korea President Moon Jae-in has warned that the economic crisis stemming from coronavirus is only just beginning as he unveiled a sharp increase in virus-related spending to around $190bn.

Seoul, which had already announced $120bn in stimulus and support measures, has committed a further Won85tn ($70bn) for the country’s worst-hit industries, small businesses and workers.

“We are at the beginning stage of a crisis. A hiring freeze together with a corporate crisis is looming. A broader hiring shock that we have never experienced before may be coming. We need stronger government measures and should execute them in a bold manner,” said Mr Moon.

The president said Won40tn ($32bn) has been earmarked for industries including airlines and shipbuilders. Emergency financial relief funds for small merchants was extended by Won35tn and job protection schemes by Won10tn.

The moves come after data in recent days showed South Korea’s export-dependent economy is suffering from a deepening of the pandemic in Europe and the US. The value of the country’s outbound shipments for the first 20 days of April shrunk by almost one-third and in March the country saw the worst monthly jobs data in more than a decade.

They also come despite South Korea’s success in containing what was for a time the worst outbreak outside of China. Health officials in Seoul announced 11 new virus infections on Wednesday, down from a peak of more than 900, following a successful programme of mass testing, contact tracing and social distancing.

Australian retail sales rise by fastest level on record in March

Primrose Riordan in Hong Kong

Retail sales in Australia rose by their fastest level on record in March, the Australian Bureau of Statistics said on Wednesday, as lockdown measures pushed sales of food higher.

Australian food retailers saw “unprecedented” demand at a time when people were increasingly confined to their homes, with turnover for products such as toilet paper, rice and pasta doubling compared to the month before.

Other products, such as devices and furniture to set up home offices, also benefited.

Overall retail turnover rose by 8.2 per cent based on preliminary, seasonally adjusted retail trade figures, the greatest rise since the ABS began collecting the data.

“The rises were slightly offset by strong falls in industries including cafes, restaurants and takeaway food services, and clothing, footwear and personal accessory retailing, which were impacted by new social distancing regulations introduced in March,” the ABS said.

Australia to establish strategic oil reserve in the US as prices tumble

Jamie Smyth in Sydney

Canberra plans to take advantage of rock bottom low oil prices by establishing a strategic oil reserve in the US at an initial cost of almost A$100m ($63m), Angus Taylor, Australia’s energy minister, said on Wednesday.

The decision comes after the signing of a bilateral agreement in Washington last month between the US and Australia which allows Canberra to lease space in the US Strategic Petroleum Reserve and access oil that it has purchased in the event of global emergencies. The two governments are currently negotiating a separate leasing agreement that will detail the oil purchases planned by Canberra.

“We will be establishing and are establishing a strategic fuel reserve that can ensure, even in the event there is a global disruption that slows fuel supplies, moving around the world, we will get access to the fuel we need to keep our country going,” Mr Taylor told reporters.

“We now have the historically low prices that allows us to do this and to do it in a way which is attractive for the taxpayer.”

Brent crude prices dropped below $20 per barrel on Tuesday for the first time in 18 years while other major benchmarks across the world also tumbled.

Member countries of the International Energy Agency are required to hold emergency oil stocks equivalent to 90 days of net oil imports but Australia only has enough storage to last 56 days. As an interim solution, Canberra has decided to buy access to US strategic reserves to help it meet the IEA requirement.

International oil prices fall to more than two-decade low

Hudson Lockett in Hong Kong

International oil prices have tumbled to their lowest level in more than two decades as concerns over the economic impact of the coronavirus pandemic hit global crude markets.

In Asian trading on Wednesday, Brent crude dropped as much as 17.3 per cent to $15.98 — its lowest point since mid-1999. Prices for the international oil benchmark are down by about 40 per cent this week.

The fall in Brent follows a plunge in the price of the US marker West Texas International, which earlier this week fell into negative territory for the first time as the spread of Covid-19 has pummelled demand for crude and created a global oil glut.

The historic collapse in WTI prices came as producers were forced to pay buyers to take oil off their hands ahead of the expiry of futures contracts. Traders are concerned about the lack of space to store physical oil in the key transit point of Cushing, Oklahoma.

Read more here

Coronavirus crisis hits India’s farmers

India’s agriculture sector, which employs half of the country’s workforce, has come under pressure over recent years due to low commodity prices.

This year, the prospect of a bumper crop and signs of higher prices signalled a possible turnaround.

But farmers’ hopes have been dashed by the coronavirus crisis, which led to strict lockdown measures across the country of 1.4bn people.

Closures of restaurants and school and office canteens, as part of measures to halt the spread of the virus, have crushed demand for agricultural products.

Some farmers have decided to stop harvesting crops altogether, at a time when hunger threatens the country’s poorest citizens.

Read the full story from the FT’s Amy Kazmin and Jyotsna Singh here.

Public health expert warns 50% need immunity before victory can be declared

Primrose Riordan in Hong Kong

A Hong Kong public health expert, who was part of the World Health Organization visit to Wuhan in January, has warned that half of the world’s population would need to have immunity to coronavirus before a victory can be declared.

Gabriel Leung, who is chair of public medicine at the University of Hong Kong, added that a viable vaccine could be as far as two years away.

Hong Kong has seen cases plummet over the past week but Prof Leung said the city, which recently extended local social distancing measures, could not tempt fate.

“We should not declare victory until we’ve reached the finish line. And the finish line is at least 50 per cent of immunity in the world’s population, including in Hong Kong,” he said.

Scientists have been waiting for more extensive serological tests to get a clearer picture of levels of community immunity and infection, but the WHO has warned that early data has shown a lower proportion of people with antibodies than they were expecting.

Prof Leung said health inequalities in the developing world could hamper efforts to suppress the pandemic.

Prof Leung criticised the current debate over how the outbreak started, saying it was premature to ask a marathon runner how the race started while they were still running the race. He declined to reveal any more details about his discussions with mainland doctors and health officials.

“I can’t really sort of go and discuss my personal views, during the exigencies of the pandemic, when a very detailed report [on the WHO China visit] has already been issued, and as one out of 25 members of that group, I think that it would not be appropriate for me to do so,” he said.

The professor said he did back an “in depth, systematic, scientific, dispassionate and objective” inquiry at the very end of the pandemic.

The comments come after Dominic Raab, the UK foreign secretary said there needed to be a “deep dive” into the outbreak and after Australia called for an independent inquiry into the issue.

European shares on course for positive open

European stock markets were set to stabilise following sharp losses sparked by a collapse in the price of oil.

Futures trade pointed to gains of around 0.5 per cent at the open for the FTSE 100 in London and the Dax in Frankfurt.

There was no let up in the oil sell-off overnight though, with Brent crude dropping as low as $15.98, its lowest price since 1999. The international oil marker was recently changing hands at $16.84 per barrel, down 13 per cent on the session. WTI, the US oil benchmark, was down 5.5 per cent at just under $11.

Shares on Wall Street tumbled overnight, as caution returned to the market following a sharp rally. The S&P 500 has lost 4.8 per cent in value so far this week, although futures pointed to a 0.9 per cent rise when trading opens later on Wednesday.

Singapore receives essential supplies shipment from New Zealand

Stefania Palma in Singapore

Singapore has received the first shipment of “essential supplies” from New Zealand under a new bilateral accord that aims to keep trade lines open during the coronavirus pandemic.

The city state – which relies heavily on food imports – on Wednesday received 20 tonnes of New Zealand meat including beef and lamb.

“Both countries have agreed to work closely together to expedite and facilitate the flow of essential supplies through our air and sea ports,” said Singapore’s ministry of trade and industry.

The two countries last week signed a trade declaration to “enable the continued production and flow of essential supplies to their intended destinations,” the ministry said.

It followed a joint ministerial statement signed last month by Singapore and New Zealand as well as seven other countries including Australia, Canada and Chile that pledged to keep supply chains connected during the outbreak.

Drax warns on falling energy demand

Nathalie Thomas in Edinburgh

Drax has warned its division selling power to industrial and small business customers in the UK is likely to make a loss this year as electricity demand has fallen sharply since the British government imposed a lockdown last month.

The FTSE 250 power company said it had “significantly increased” its forecasts of the number of business customers who are likely to fail as a result of the coronavirus pandemic, and of higher bad debt.

Drax is among the first power companies to spell out in any detail what has happened to the electricity market since stringent measures were introduced in the UK last month, forcing the closure of many businesses particularly in sectors such as leisure, hospitality and retail. Overall electricity demand in the market has fallen sharply as falling in demand from the industrial, commercial and small business sectors has outweighed rising domestic demand as many people work from home.

Other utilities have warned of more customers cancelling their direct debit payments, although there is currently little data on the scale of the problem.

Overall Drax, which also owns the UK’s biggest power plant in north Yorkshire, said it expected a £60m hit this year from the coronavirus pandemic, although it said its forecast for full year adjusted earnings was in line with current analyst consensus of £398 million. Analysts have, however, revised down their forecasts – in February they were expecting 2020 adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) of £433 million.

Fashion brand Boohoo says trading ‘mixed’ since mid-March

Jonathan Eley

Boohoo said that trading since the middle of March, when the UK’s Covid-19 outbreak began to accelerate, has been “mixed” and that it is not yet appropriate to provide guidance for the financial year to February 2021.

The online retailer, which sells cheap clothes to a young customer base, reported an initial marked decrease in year-on-year growth, but said performance had improved in more recent weeks “and we are now seeing improved year-on-year growth of group sales during April”.

It added that it was comfortable that it had sufficient financial headroom to endure the pandemic, with net cash of £241m as of the end of February and a cost base that is unusually variable.

For the year to February 2020, the group reported revenue growth of 44 per cent to £1.23bn and pre-tax profit of £92m, up 54 per cent.

Beer volumes down 14 per cent in March, Heineken says

Judith Evans in London

Heineken, the world’s second largest brewer, has cancelled its interim dividend and scrapped executive bonuses after the pandemic cut into beer drinking globally.

Net profit at the Dutch brewer fell sharply to €94m in the first quarter, down from €299m in the previous year, after reporting that organic beer volume fell 2.1 per cent in the quarter with a drop of 14 per cent in March.

The Amsterdam-based company, which produces brands including Amstel and Tiger, said that the second quarter of the year is expected to be worse and the economic impact of the pandemic is likely to affect results in the second half of the year.

“Most countries where we operate have reacted by taking far-reaching containment measures,” said Jean-François van Boxmeer, chief executive of Heineken.

“Our performance for the first quarter reflects the initial impact of those measures, and volumes in March were obviously heavily affected.”

The devaluation of emerging market currencies is also expected to hit the company, which has a big presence in countries including Vietnam, Nigeria and Mexico. It is cutting costs including suspending all hiring for new positions.

Two UK insurers give first estimates of scale of pandemic’s costs

Oliver Ralph in London

UK-listed insurers Hiscox and Beazley have given their first estimates of the scale of potential claims from Covid-19, which could be one of the most expensive events ever for the industry.

Beazley said that it expects to pay out $170m, after taking into account reinsurance that it has in place. It has received claims on a range of policies, from event cancellation to business interruption in the US. The company said it had drawn down $140m of a credit facility to maintain its capital strength.

Hiscox expects $150m of claims, also after reinsurance, although it said the figure could rise by $25m if restrictions on travel and mass gatherings last longer than six months. But it reiterated that it had limited exposure to business interruption claims in the UK.

A group of unhappy Hiscox customers in the UK have set up an action group to pursue claims against the company, arguing that their insurance policies provide cover for the costs of the crisis.

The company said:

Hiscox UK’s core small commercial package policies do not provide cover for business interruption as a result of the general measures taken by the UK government in response to a pandemic.

However it added that it would work with the industry and customers to try to resolve the issue.

UK companies round-up

Cat Rutter Pooley in London

– Fast fashion chain Boohoo has results for the year to February out this morning. It had another bumper run, with sales up 44 per cent to £1.2bn and pre-tax profits up 54 per cent to £92m. Since mid-March, there has been a “marked decrease” in year-on-year growth, but Boohoo said performance had improved in recent weeks. It had £241m of net cash at year end, so says it is in good shape. Still, it said it is not yet appropriate to provide guidance for the financial year to February 2021.

– Tonic water-maker Fevertree also has results out. It’s happily debt free with net-cash at its December year-end of £128m, so is paying a dividend despite a likely collapse in sales to restaurants and bars in recent weeks.

– Insurer Hiscox, which has been under fire over the terms of its business interruption cover, says it will work with the UK insurance industry, regulators and customers “to seek means of expediting resolution”. Hiscox has maintained that its “core small commercial package policies” don’t cover for business interruption resulting from the measures taken by the government in response to the pandemic. Shockingly some of its customers don’t agree.

– Energy company Drax has outlined the impact of falling energy consumption in the UK. It said its division selling power to industrial and small business customers in the UK is likely to make a loss this year as electricity demand has fallen sharply since the UK lockdown began last month. 

You can sign up for Cat’s daily City  briefing email here.

UK inflation fell in March

Bethan Staton in London

UK inflation slipped lower in March, according to official statistics, in what economists expect will be the beginning of a much sharper fall in the coming months.

Consumer price inflation was 1.5 per cent last month, down from 1.7 per cent in February, data from the Office for National Statistics showed on Wednesday.

The fall is the clearest indication yet of how the Covid-19 pandemic is likely to affect prices in the UK. Andrew Wishart, UK economist at Capital Economics, forecast that inflation would fall to 0.5 per cent by the summer as employment falls and a recession takes hold.

In March, the main drivers of a fall in inflation were from housing, water prices and fuel, tied in part to lower oil prices which crashed 30 per cent at the beginning of the month before falling further. Clothing and restaurant prices also fell.

Howard Archer, chief economic advisor for EY ITEM Club, said the news would provide a boost to consumers. “In the current highly challenging environment, any piece of helpful news on the economy is to be welcomed,” he said.

Europe: what you might have missed

International oil prices have tumbled to their lowest level in more than two decades as concerns over the economic impact of the coronavirus pandemic hit global crude markets.

Health authorities in China reported 30 new cases of the coronavirus to the end of Tuesday. Seven of the infections were locally transmitted and were all in Heilongjiang, where recent fears of a second outbreak have led to new lockdown measures in the province.

China has promised to give welfare support to millions of migrant workers who have lost income due to coronavirus but who previously fell outside the country’s social security safety net.

Donald Trump told Harvard it must pay back $9m in coronavirus federal aid days after the Ivy League college received rescue funds despite having the world’s largest endowment with more than $40bn in assets.

Australia plans to take advantage of rock bottom low oil prices by establishing a strategic oil reserve in the US at an initial cost of almost A$100m ($63m), Angus Taylor, Australia’s energy minister, said on Wednesday.

UK-listed insurers Hiscox and Beazley have given their first estimates of the scale of potential claims from Covid-19, which could be one of the most expensive events ever for the industry.

Germany reports 2,000 new cases, well below high point of pandemic

Tobias Buck in Berlin

Germany reported 2,237 new coronavirus cases on Wednesday, an increase of 2 per cent compared to the previous day that took the total number of detected infections to 145,694 since the crisis started.

According to official data from the Robert Koch Institute in Berlin, the number of Covid-19 deaths recorded over the past 24 hours rose by 281 to 4,879.

Both daily cases and the number of fatalities were higher than in the past two days, when new infections fell below 2,000. However, the increase in new cases is now significantly below the high point of the pandemic, when Germany recorded more than 6,000 new coronavirus cases per day.

Close to 100,000 Covid-19 patients have recovered from the disease.

Worldwide death toll rises to four day high

Steve Bernard in London

The worldwide death toll jumped to 7,066 yesterday, the highest daily rise in four days, driven in part by unexpectedly high fatality rates in the US and UK.

Total deaths from coronavirus now stand at 163,522. Global new daily cases of Covid-19 rose by 75,254 on Tuesday, bringing the total to 2.49m.

Hopes that deaths may be peaking in the US took a setback yesterday as the country registered its highest number of fatalities in a 24-hour period. On Tuesday, 2,674 people lost their lives to Covid-19, according to data from The Covid Tracking Project, pushing the country’s current death toll through 40,000 to 40,086.

It was a similar story in the UK where the death toll jumped from 449 on Monday to 828 yesterday. However, the number of diagnoses of Covid-19 patients fell to 4,301, the lowest daily rise in 15 days, and bringing the total to 129,044, according to data from Worldometers.

The number of global recovered cases surged to a record daily total of 43,896 yesterday, leaving 690,226 free from the virus.

Covid-19 to widen UK regional disparity, KPMG and job data show

Valentina Romei in London

Coronavirus is expected to widen regional economic disparity in the UK as the effects of the pandemic are set to be more severe in the Midlands and East of England, according to a consultancy’s forecast and job vacancies data.

KPMG forecasts that London’s economy will contract by 7.3 per cent this year, while the fall is expected to be even sharper at 10 per cent in the Midlands and the East of England.

The double-digit drop in gross domestic product in the Midlands is attributed to its large automotive sector that has been hit hard by the crisis and accounts for nearly 6 per cent of the local economy. The high share of the construction sector, which has come to a near stop, in the East of England’s economy will be a drag on growth.

In contrast, the large share of financial and business services in London “mean the capital’s economy is more resilient to the restrictions imposed by the lockdown,” said Yael Selfin, chief economist at KPMG.

“Government’s ambition to level-up the UK will face a setback as a result of the pandemic,” Ms Selfin added. “We expect that the gap between performance in London and the rest of the UK will widen this year.”

An FT analysis of vacancies data on the government website “Find a Job” also shows that the number of jobs advertised in the West Midlands has fallen nearly 60 per cent from March 31 to April 22, compared to a 30 per cent drop for London.

European markets brush off fresh tumble in crude

European stocks rose in morning trading, as a measure of risk-appetite returned to the market even with the oil price mired in multi-decade lows.

London’s FTSE 100 rose 0.9 per cent, while the pan-European Stoxx 600 index was up 1.1 per cent.

Shares on Wall Street were set to snap a two-day losing streak that has seen the S&P 500 shed nearly 5 per cent so far this week. Futures pointed to gains of around 1 per cent at the open in New York.

The slide in the price of oil has continued, with international marker Brent down 10 per cent at $17.50, having fallen to its lowest level since the 1990’s in Asian trading.

UniCredit braces itself for a wave of coronavirus-induced defaults

Italy’s largest bank UniCredit has boosted its defences for soured loans by €900m as it forecast a sharp drop in eurozone economic output this year. 

UniCredit’s move is the first for a major European bank after America’s six largest lenders increased their loan loss provisions earlier this month by a combined $25.4bn.

Like its US peers, UniCredit has braced itself for a jolt of loan defaults given the rapid deterioration in the global economy. The lender forecast eurozone gross domestic product will shrink 13 per cent this year, before a 10 per cent rebound in 2021. 

Italy has been one the hardest-hit countries in the Covid-19 pandemic and was one of the earliest in Europe to lock down its economy. It has joined with several other EU nations in calling for joint debt issuance by the bloc to help it revive its economy. 

Milan-based UniCredit said the increase in loan loss provisions would leave its overall cost for risk management at around 110 basis points in the first quarter and 100-120 bps for 2020. Both figures were above the consensus expectation of analysts covering the group, said Benjie Creelan-Sandford, an equities analyst at Jefferies. 

He said that given UniCredit was already facing “large negative one-off charges” for 2020, the higher cost of risk would imply “the bank will now be lossmaking on a reported basis.”

The group’s chief executive Jean Pierre Mustier has proposed to reduce his salary this year by 25 per cent, equivalent to €300,000, reducing his overall compensation by €2.7m.

Rate of new Covid-19 cases slow in Russia

Henry Foy in Moscow

Russia announced a record number of new deaths from coronavirus on Wednesday, as new confirmed cases of the virus showed signs of plateauing.

Fifty-seven people infected with Covid-19 died overnight to take the country’s total death toll to 513, more than double the number seen five days ago.

But new confirmed cases rose by just 10 per cent to 57,999, the third day in a row that the daily addition has failed to set a new record increase.

Russian officials have suggested that the number of new cases could peak next week. The country is under a national lockdown until the end of April, with citizens of Moscow only able to use transport with the permission of city authorities.

Investors flee European mutual funds at record pace

Attracta Mooney in London

Investors fled mutual funds in Europe at the fastest rate on record in March and redeemed €246bn, a number that dwarfs even the worst month in the global financial crisis, as concerns about the impact of coronavirus escalated.

According to Morningstar, the data provider, the redemptions in March were more than twice that seen during the worst-hit month in the financial crisis, when investors pulled €108bn from long-term funds in October 2008.

Bond funds were hit with unprecedented redemptions of €140bn in March, almost three times the previous monthly record for outflows of €54bn in October 2008.

Pimco, the US bond fund giant, suffered the highest redemptions in Europe, according to Morningstar, with investors redeeming €23.7bn, chiefly from its flagship fund Pimco Income. It marked the worst one-month period of redemptions for the US asset manager on record.

BlackRock’s popular iShares exchange traded funds also suffered outflows in Europe, while UBS Asset Management and Vanguard had net sales of mutual funds. The data is for open-end funds and ETFs domiciled in Europe.

Uniqlo owner slams the Japanese government for crisis response

Kana Inagaki in Tokyo

The head of Asia’s largest clothing retailer has warned that Japan risks economic collapse if the government fails to contain the coronavirus outbreak, criticising Tokyo’s inadequate testing and lockdown strategy.

Tadashi Yanai, the founder of Japanese group Fast Retailing, said Prime Minister Shinzo Abe’s decision to declare a nationwide state of emergency without mass testing was a “mistake”, in a sharp rebuke of Japan’s handling of what he described as “the biggest crisis for mankind in the postwar period”.

The Uniqlo operator said in a statement on Wednesday that it was committed to paying for orders it had made to its clothing supplier factories in Southeast Asia despite the falloff in demand caused by the coronavirus outbreak.

The announcement comes as suppliers in countries such as Bangladesh and Cambodia have been particularly hit hard by cancellation of orders and cuts in payments following the shutdown of retailers in Europe and the US.

“To safeguard the financial stability of our production partners, Fast Retailing has committed from the outset to payment for complete orders and orders where production has commenced,” the company said, echoing assurances made recently by Swedish fast fashion group H&M and the owner of Primark.

Fast Retailing said it will use fabrics already purchased by its partners to fulfil its orders, and provide compensation if the materials become unnecessary.

Read the full story here.

Roche chief criticises UK’s ‘under-investment’ in healthcare

Donato Paolo Mancini in London

Roche’s chief executive has said the UK has not invested enough in healthcare and testing infrastructure in recent years — leaving it lagging behind other countries and hindering its response to coronavirus.

The Swiss company is one of the “big four” diagnostics companies worldwide providing molecular, or PCR, tests that look for the presence of the virus using so-called “high throughput” machines which can process many tests in short amounts of time.

“You cannot just start a lab on a greenfield,” Severin Schwan, Roche chief executive, said on Wednesday, as he gave a first-quarter trading update.

“One of the learnings of this crisis is you see some of the countries who have invested in healthcare, in testing infrastructure over the last [few] years, such as certain countries in Asia, [like] Singapore, or, say, South Korea. Or, if you look in Europe: Germany, Switzerland,” he said. “Those countries now have a huge advantage.”

Coronavirus death toll in UK twice as high as official figure

Chris Giles in London

The coronavirus pandemic has already caused as many as 41,000 deaths in the UK, according to a Financial Times analysis of the latest data from the Office for National Statistics.

The estimate is more than double the official figure of 17,337 released by ministers on Tuesday, which is updated daily and only counts those who have died in hospitals after testing positive for the virus.

The FT extrapolation, based on figures from the ONS that were also published on Tuesday, includes deaths that occurred outside hospitals updated to reflect recent mortality trends.

The analysis also supports emerging evidence that the peak of deaths in the UK occurred on April 8 with the mortality rate gradually trending lower since, despite the 823 hospital deaths announced on Tuesday, which were sharply up on the 449 in the previous 24 hours.

Read the full article here

Companies must strengthen their buffers against shocks

The Editorial Board

As managers wrestle with how to restart production lines and restaff offices after lockdown is lifted, they must also consider how to prepare for inevitable future shocks.

These include not just a resurgence of this virus but different, perhaps more dangerous, pandemics, or the longer-term disruption of climate change. Like the banks after the global financial crisis, businesses will need to build thicker buffers against shocks.

At least in the short term, investors will help by shunning fragile business models. Equity and bond markets are already discriminating sharply in favour of fundraising requests from companies with strong balance sheets and high credit ratings.

If companies do not build these buffers, governments and regulators will need to find ways to encourage or oblige them to shore up their defences.

Read the full article here

German biotech firm gets vaccine go ahead

Joe Miller, Frankfurt Correspondent

The German biotech firm BioNTech will become the first European company to proceed to clinical trials for a Covid-19 vaccine, after receiving regulatory approval for accelerated testing.

The Mainz-based business, which has never produced a market-ready product, has been working on a coronavirus solution since January, and testing an early vaccine on mice.

It will now start to test its prototype on 200 healthy volunteers, aged between 18 and 55, with the aim of being able to manufacture a certified vaccine in less than a year.

Germany’s Paul-Ehrlich-Institut, which oversees clinical trials in the country, said on Wednesday that further clinical trials of vaccine candidates will begin in the coming months.

“Several vaccine products will be necessary to fight the pandemic in order to ensure an adequate supply,” the body said.

UK government set to bail out cities’ train and tram networks

Andy Bounds in Manchester, Chris Tighe in Newcastle and Bethan Staton in London

The UK government is set to bail out London Underground and provincial cities’ tram and train networks because a collapse in passenger numbers following the coronavirus lockdown has threatened their viability.

Whitehall officials and civic leaders said a bailout could come as early as this week after marathon talks following the lockdown.

These locally run transport systems were excluded when the Department for Transport gave £167m to bus companies and suspended traditional rail franchise agreements to prevent train companies from collapsing.

Andy Burnham, mayor of Greater Manchester, said he could mothball the conurbation’s tram system, the UK’s largest, “within days” because it was losing more than £1m a week, even after cutting services and furloughing staff.

Read the full article here

Spanish PM requests extension of lockdown as death toll rises

Daniel Dombey in Madrid

Spain’s prime minister has warned that the country’s emergence from lockdown will be “slow and gradual” as the government recorded an uptick in its coronavirus death toll.

Pedro Sánchez made his comments as he asked parliament to back an extension of the legal order underpinning the lockdown until May 9.

“The general requirement to stay at home will not be lifted until we are prepared,” he said, although he added that in future the conditions of the lockdown “will not be the same as up to now”, with shifts in the rules in the second half of May.

Spain has already announced a slight relaxation of the now five week old lockdown, one of the world’s strictest: children accompanied by adults will be able to go for brief walks as of Monday.

But the country is still contending with a high daily death toll. The health ministry said that as of 9pm on Tuesday, 21,717 people had died after contracting the virus, 435 of them in the previous 24 hours.

This was five more people than died the day before, but significantly below the levels of over 500 daily deaths that Spain experienced throughout last week and much less than the peak death toll of 950 on April 2. The ministry added that there were 208,389 confirmed cases of the virus, 2 per cent more than the day before.

Mr Sánchez told parliament he was confident of agreement on extending the lockdown at an EU video summit on Thursday. Spain has proposed that an EU coronavirus recovery fund should give grants worth a total of €1.5tn to afflicted countries but the idea faces resistance from northern member states.

Pablo Casado, the leader of the opposition People’s party, criticised Mr Sánchez for the government’s “improvisation and incompetence”, although PP support for the extension of the lockdown means it will win parliamentary backing.

Iran’s Rouhani calls for unity

Najmeh Bozorgmehr in Tehran

Iran’s president Hassan Rouhani called for national unity and warned his opponents that it was the wrong time for political infighting when his government was struggling with the coronavirus outbreak.

“Some [politicians] have become agitated fearing that the government plans to confiscate any success in fighting against coronavirus,” said Mr Rouhani in a cabinet meeting on Wednesday. “If we have had any success, it belongs to the nation and the health sector.”

Iran’s centrist president’s comments come after the hardline judiciary vowed this week to look into allegations of fraud in his government over the allocation of $5bn to import goods at subsidised foreign currency rates about two years ago.

The death toll reached 5,391 on Wednesday, up from 5,297 a day ago. Iran is mostly back to its normal life, but mosques, shrines, schools, universities and restaurants remain closed.

India outlaws attacks on doctors after reports of violence

Amy Kazmin in New Delhi

The Indian government is promulgating an emergency ordinance that will make it a criminal offense to attack doctors and other health care professionals, after a mounting outcry by doctors at their mistreatment while they battle coronavirus.

In recent weeks, doctors on the front lines of the coronavirus battle have been attacked by angry relatives of patients who have died, and ostracized in their own neighbourhoods by other residents who fear that they may bring Covid-19 into their communities.

But the India Medical Association has been up in arms since two cemeteries in the southern city of Chennai refused to bury Dr Simon Hercules, a neurosurgeon who died after being infected with coronavirus. Mobs protesting the doctor’s planned burial attacked the ambulance carrying his body, forcing his family and colleagues to flee. Later, another physician returned to the cemetery and dug the grave himself to bury his friend.

The galling incident sparked furious protests by the IMA, which warned its members would observe a “Black Day” and take other necessary actions if their rights and dignity were not assured during this crisis.

Many doctors treating coronavirus patients are currently staying in hotels and other facilities away from home, lest they infect their families.

Prakash Javadekar, the information minister, said on Wednesday that the Cabinet has approved an emergency ordinance to make attacks on doctors and other health workers a crime, with a punishment of up to Rs200,000 and five years in prison, or seven years in prison if the doctor suffers grievous injuries.

Mr Javadekar warned that the government would show “zero tolerance” for the harassment of medical professionals.

UK had ‘ample opportunity’ to join procurement scheme, says EU

Jim Brunsden in Brussels

The European Commission has countered UK claims that a “communication problem” was responsible for its non-participation in four EU joint procurement exercises for equipment to fight the pandemic.

The commission pointed out on Wednesday that Britain had taken part in meetings of the EU’s Health Security Committee which discussed the procurement plans as early as January 31, weeks before they were launched.

Britain “had ample opportunity to express its wish to participate,” it said.

The UK government came under intense pressure yesterday to give a full explanation of why it decided not to participate in the procurement exercises which were launched during March and April. Simon McDonald, a senior Foreign Office official, told MPs that Britain had taken a political decision not to participate, only to subsequently retract the claim.

“Owning to an initial communication problem, the UK did not receive an invitation in time to join in four joint COVID EU procurement schemes. As those four initial schemes had already gone out to tender we were unable to take part,” he wrote in a letter to the UK parliament’s foreign affairs select committee.

Britain’s health secretary, Matt Hancock, added to the confusion by claiming that the UK had been left out of the scheme, but was now taking part.

The commission said that the UK always had full rights to take part owing to its status as a signatory of the EU’s Joint Procurement Agreement. The country’s rights under that agreement continue during its post-Brexit transition period.

“The UK has signed the joint procurement agreement. That allows the UK to participate,” it said.

Delta burns through cash as revenues tumble

Claire Bushey in Chicago

US carrier Delta Air Lines suffered a tumble in revenues as it burnt through cash at a rate of $100m a day at the end of March.

The Atlanta airline was hit with a first-quarter pre-tax loss of $607m because of the coronavirus pandemic.

It is the first big US carrier to fully report quarterly earnings since Covid-19 ravaged the travel industry, with governments worldwide ordering people to stay at home.

United Airlines gave investors a peek on Monday, saying it recorded a $2.1bn pre-tax loss in the first quarter.

EmoticonVirtual PMQs underway in the UK

The first Prime Minister’s Questions since the Easter break is underway, taking place in a ‘virtual parliament’ as MPs observe social distancing rules.

It is opposition Labour leader Keir Starmer’s first PMQs since his election earlier this month, while the government is represented by Dominic Raab in place of the convalescing Boris Johnson.

Messrs Raab and Starmer are in the House of Commons, but many MPs will be asking questions remotely via video link, with numbers inside the chamber strictly limited.

All in, it makes a surreal backdrop to the session – with the government facing questions over its response to the pandemic, including over testing and protective equipment for NHS workers.


Turkey slashes rates by full percentage point

Laura Pitel in Ankara

Turkey’s central bank has slashed its benchmark interest rate for the eighth time in a row, risking further pressure on the lira that it has spent billions of dollars seeking to prop up.

The bank cut its one-week repo rate by 1 percentage point to 8.75 per cent, a cut of double the magnitude than the average expectation of economists in a Bloomberg survey.

The move will lower the cost of borrowing for Turkish businesses and households, supporting president Recep Tayyip Erdogan’s efforts to use cheap credit as a tool to combat the economic fallout from the coronavirus crisis.

But it also pushes real interest rates — the premium granted to investors for holding lira or lira-denominated assets after inflation, which stood at 11.9 per cent in March — even deeper into negative territory.

The bank said that inflation was likely to be lower than expected in the months ahead due to plunge in oil prices and a drop in demand due to the coronavirus crisis.

Economists, however, had voiced concern prior to Wednesday’s decision that further cutting of rates would increase the vulnerability of the Turkish lira, which has been teetering close to an all-time low against the dollar.

The currency slipped to session lows after the monetary policy decision, leaving it just a whisker away from the TL7 to the dollar level that is closely watched by forex traders.

The central bank’s already low foreign currency reserves have plunged rapidly in recent months as state-owned banks have sold dollars in a bid to support the lira.

UK government says 69 health workers have died of virus

69 people working in the National Health Service have died of coronavirus to date, the first secretary Dominic Raab told MPs at Prime Minister’s Questions.

Taking questions from Labour leader Keir Starmer for the first time, Mr Raab said he did not know how many care workers have died, given those numbers are “more difficult to establish”.

On the frontline healthcare workers who have died, Mr Raab said:

“We can all agree in this House every one of those is a tragedy. That can only double down our efforts to tackle this virus.

Sir Keir also questioned the likelihood of the government hitting its 100,000-a-day virus test target, and the issues surrounding sourcing protective equipment for NHS staff.

“We have been very slow, and we are way behind other European countries” on testing, Sir Keir said.

Poland sticks to May election despite public health risks

James Shotter in Warsaw

Poland passed 10,000 cases of coronavirus infections today, as the ruling Law and Justice party insisted it will go ahead with the presidential election on May 10.

Poland has been on lockdown for a month in a bid to stop the spread of coronavirus. Although it has been less affected than some European countries, it has not yet managed to emulate the downward trend in new cases of others, such as the Czech Republic and Austria.

Sunday was Poland’s worst day in terms of new infections, said the health ministry on Wednesday. That total number of confirmed cases of Covid-19 has risen to 10,034, and the number of deaths to 404.

Despite this, Law and Justice is determined to press ahead with the presidential election, which its candidate, incumbent Andrzej Duda is favourite to win. Opposition politicians have called on the government to delay the vote, arguing that it is both dangerous and unfair, as they are effectively unable to campaign.

Undeterred, the government is currently trying to pass legislation allowing the election to be held by postal ballot.

“Elections must be free, secret, universal and fair,” opposition candidate Malgorzata Kidawa-Blonska wrote on Twitter. “And above all they must be safe for Poles. I will do everything I can to ensure that this is the case.”

A quarter of Covid-19 deaths in Scotland happening in care homes

Mure Dickie in Edinburgh

The proportion of coronavirus-related deaths occurring in Scottish care homes has climbed sharply to account for a third of the total 1,616 fatalities reported by April 19, revealed National Records of Scotland data.

The figures for last week, released on Wednesday, will fuel concerns about inadequate personal protection equipment for staff at care homes. The NRS had previously reported that, up to April 12, care homes had accounted for a quarter of deaths where coronavirus was mentioned on the death certificate.

The NRS said 56 per cent of total registered deaths up to April 19 were in hospitals, down from 62 per cent, while 10 per cent were at home or non-institutional settings, down from 13 per cent. Overall Covid-19-related deaths rose to 651 in the week to April 19th, up from 610 the previous week.

The NRS said the total number of deaths registered in Scotland in the week to April 19 was 1,911, nearly 80 per cent higher than the average in the same week over the last five years. Coronavirus accounted for three quarters of these 844 excess deaths.

Business unhuried at testing site in south-east London

Robert Wright in North Greenwich

At one of the longest-established testing sites, by the O2 arena in Greenwich, south-east London, business was steady around noon on Wednesday without being brisk.

People requiring tests were being met at three white tents set up in a car park by the concert venue and were handed kits to administer swabs. Staff wearing face masks, hi-visibility vests and plastic aprons were instructing them to insert a swab into the back of their mouth and then into each nostril.

However, while staff were mostly occupied, it was easy to see why there have been complaints that testing capacity is not being fully utilised. There was no queue of drivers waiting to be admitted to the site, in one of the venue’s car parks, and most drivers were being checked in almost immediately on arrival, suggesting that the site was operating comfortably within its capacity.

AT&T loses 1m TV subscribers and withdraws outlook

AT&T lost more than 1m subscribers in the first quarter and withdrew its financial guidance “due to lack of visibility” because of the coronavirus pandemic.

The Texas-based company lost 897,000 premium television subscribers, and 138,000 subscribers at AT&T Now, its online video service. However, the company added 163,000 postpaid phone subscribers, which are typically more lucrative than those who pre-pay for their mobile service.

Operating revenues at the company’s Warner Media division fell more than 12 per cent from a year ago to $7.4bn. Within that, the AT&T’s Turner business was hit by lower advertising revenues primarily from the cancellation of the NCAA’s March Madness college basketball tournament, which, alongside other major sports, was called off as a result of the Covid-19 outbreak. Meanwhile, Warner Brothers is coping with production delays as result of social distancing measures and lockdowns.

AT&T also pointed to a decline in its wireless equipment sales and roaming services as a result of travel restrictions, as it noted a 4.5 per cent drop in overall revenues to $42.8bn, shy of Wall Street estimates. Adjusting for one-time items earnings of 84 cents a share were in line with expectations.

The company said late Tuesday that its new streaming service HBO Max, which seeks to compete with Netflix, Disney+ and Peacock, will launch on May 27. Netflix added nearly 16m subscribers in the first quarter, double its target as it benefitted from the lockdown economy.

Tissue stockpiling boosts Kimberly-Clark’s quarterly results

Alistair Gray

Panic buying ahead of the coronavirus lockdown has been a boon for Kimberly-Clark, the Dallas-based company behind Andrex toilet roll, Kleenex tissues and Scott paper towel.

Kimberly-Clark, whose shares are trading just 4 per cent shy of all-time highs, said on Wednesday that customer stockpiling had boosted all business segments in all its main regions.

The biggest beneficiary was Kimberly-Clark’s consumer tissues division, where first quarter sales jumped 13 per cent. Bathroom and facial tissue volumes leapt by a “double-digit” percentage in North America.

It is the latest sign that some companies are benefiting from the huge changes in consumer behaviour during the pandemic while others fight for survival. Procter & Gamble last week reported the biggest rise in US revenues in decades after demand for cleaning products surged.

Kimberly-Clark produced net sales of $5bn in the quarter, 11 per cent more than a year ago on an organic basis, and net income of $675m compared with $466m last time.

Despite the strong quarter, Kimberly-Clark joined other big companies in withdrawing its financial guidance for the full-year, citing the “high degree of uncertainty” over the impact of covid-19.

Shares in the New York-listed company, which has a market capitalisation of about $48bn, were up 1.4 per cent in pre-market trading.

People in UK more likely to buy a car after lockdown, survey shows

Peter Campbell, Motor Industry Correspondent in London

More than half of UK driving licence holders without a car are considering buying one in order to avoid using public transport after the coronavirus lockdown ends, according to a new survey.

Auto Trader, the online car marketplace, surveyed 3,000 consumers about attitudes towards private car use compared to shared vehicles or public transport.

The issue is one of the key questions facing the motor industry, which has been investing in car sharing and other transport services in response to a fall in private car ownership, particularly in major cities, in recent years.

But the lockdown has seen several car companies shutting down their shared businesses, with executives suggesting that private car use will rise after the lockdown. General Motors on Tuesday evening closed Maven, its shared business.

In a survey carried out last week, Auto Trader found that 56 per cent of licence holders who do not have a car are considering buying a vehicle once restrictions are lifted. 48 per cent of UK public transport users said they would be less likely to use it once the current restrictions have been lifted. Only 2 per cent of the survey respondents said they would not be interested in buying a car once the virus ends.

“You would expect that use of public transport will be much slower,” Ian Plummer, Auto Trader’s commercial director, told the FT.

Any uptick in car sales, which have fallen by a third in the UK in the first quarter, is likely to be supported by government incentive schemes. Carmakers across Europe and the US are calling for scrappage schemes and other incentives to help consumers buy vehicles once the lockdown is over.

Trump orders shooting of Iranian vessels that threaten US navy

Demetri Sevastopulo in Washington

President Donald Trump on Wednesday said he had told the American military to shoot any Iranian vessels that harass US navy ships, as tensions rise in the Gulf amid the record collapse in crude oil prices over coronavirus.

“I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea,” Mr Trump tweeted on Wednesday morning without providing any more detail about the order.

The Pentagon last week said 11 Islamic Revolutionary Guard Corps Navy boats had come very close to US navy and coast guard ships in the Gulf, in manoeuvres that it described as “dangerous”.

While the Trump administration had expressed concern about the Iranian move, the order came as the White House struggles to respond to the record collapse in crude oil prices amid plummeting demand.

England’s Covid-19 daily death toll drops to below 700

England has recorded a drop in Covid-19 patient deaths in hospitals in the latest 24-hour period, with the total tally since the pandemic began nearing 16,300.

As of 5pm on Tuesday, a further 665 deaths were reported, bringing the total to 16,272, NHS England said on Wednesday, down from 778 the day before. England usually accounts for almost all the UK figures, which are due to be published soon.

The deaths are registered against the date of death rather than when the deaths were reported. The total by date of death, particularly for most recent days, are likely to be updated in future releases.

Nissan to re-open part of its Sunderland plant

Peter Campbell in London

Nissan will re-open part of its Sunderland facility this week in order to test safety measures for workers that will allow it to fire up the main car plant in the coming weeks.

Around 50 staff will return to work in part of its engine plant making castings and cylinder heads, as an experiment that will lay the groundwork for the site’s 6,000 staff to return to their posts eventually.

The first wave of European factories have reopened with reduced output after last month’s blanket shutdown.

Carmakers from Toyota to Hyundai are endeavouring to protect staff while also restarting some production, using masks, distancing and temperature checks.
As part of its safety plans, Nissan will issue masks to workers who will not come into contact with colleagues, and a more specialised mask to employees who will come within two meters of a co-worker.

On Wednesday, Nissan said it will also re-open the Barcelona factory at the start of May to make the Navara pick-up truck and the Mercedes X-Class, which is built at the site. The facility also makes the ENV200 electric van, though production of the battery model is not expected to restart yet.

Two of Nissan’s Spanish parts plants that feed into the Barcelona site will reopen next week.

Baker Hughes to cut capex and jobs after $10bn in losses

Baker Hughes, the third largest oilfield services company, will reduce its capital expenditure by more than 20 per cent compared to last year and cut jobs to weather one of the worst downturns the oil industry has ever faced.

The Houston-based company recorded a net loss of $10.2bn in the first quarter, down from $32m of net income in the same period last year, after an impairment charge on almost $14.8bn of assets.

The results come as US oil prices breached into negative territory on Monday due to the coronavirus-induced collapse in demand. Brent crude, the international benchmark, reversed losses on Wednesday to trade at $20.70 per barrel, after falling to the lowest level in two decades in Asian trading.

“Looking forward, the outlook for oil and gas demand and supply appears equally uncertain,” said Lorenzo Simonelli, chief executive of Baker Hughes. “It will largely be driven by the pace of economic recovery from the Covid-19 pandemic and the supply response that ultimately materialises.”

On the earnings call, Mr Simonelli said that forced closure of production wells in the US could soon complement the voluntary supply cuts agreed by Opec and other producers, with the company forecasting a reduction in demand of 20-30m barrels per day in the second quarter.

He added that the company expects that drilling spend in the US is likely to halve this year, while it predicts that spending internationally will decline by double-digits.

Mexico says public finances protected from oil crash

Jude Webber in Mexico City

Mexico expects to get a $6bn return from its annual oil hedge, President Andrés Manuel López Obrador said after reading out a decree to be published on Wednesday, which he said outlined a new model of tackling the coronavirus crisis without taking on debt.

Mexico has not released full details of its annual oil hedge, considered one of the largest such operations in oil markets, and has classified the information, but the government says its state finances are protected despite the plunge in oil prices into negative territory this week.

“The finance ministry protected itself. All the duties [state oil company] Pemex pays to the Treasury were insured, considering a price of $49, which allows us to have 150bn pesos. We don’t lose this income because of the fall in the price of oil,” he told his daily news conference.

The decree formalised public sector pay cuts and other austerity measures but stipulated that the president’s priority social and infrastructure projects would continue. The Bank of Mexico on Tuesday unveiled an unprecedented 750bn peso package of liquidity measures.

Mr López Obrador insists that it is not necessary to take on debt or use what he blasts as traditional neo-liberal economic models of crisis management. Instead, he has promised government pay cuts and greater austerity to ensure that the poor receive social programmes. 

Wall Street rallies as oil bounces back

US stocks advanced while global oil prices bounced back after reaching lows last seen more than two decades ago.

The S&P 500 jumped 1.7 per cent, and the Nasdaq Composite was up 1.9 per cent in morning trading in New York. The Dow Jones Industrial Average rose 1.8 per cent.

West Texas Intermediate crude, which tumbled by almost half on Tuesday, surged more than 24 per cent to $14.43 a barrel after Donald Trump said he ordered the US Navy to “destroy” any Iranian gunboats that harass American ships. Brent, the international oil benchmark, traded more than 11 per cent higher at $21.51 a barrel.

Canadian annual inflation falls to lowest since 2015

Canadian consumer inflation fell to its lowest level in almost five years, depressed by lower prices, which tumbled as the coronavirus crisis hurt demand for fuel and an oil price war futher dragged on prices.

The annual inflation rate in Canada fell to 0.9 per cent in March — the lowest reading since May 2015 — down from 2.2 per cent in February. That marked the sharpest deceleration since September 2006, according to Statistics Canada.

Inflation was weighed down by a 11.6 per cent drop in energy prices. The coronavirus pandemic has depressed oil prices the world over as demand waned and Saudi Arabia launched a price war last month.

Last week the kingdom and Russia called a truce and announced the biggest oil production cuts in history, however, crude prices have continued to crumble amid weak demand and as traders scramble for storage space.

“Timelier data suggest that gasoline price inflation will fall even further in April to as low as -45%, from -27% in March,” said Stephen Brown, economist at Capital Economics. “That would knock another 0.8%-points from the headline rate and, if we are right that inflation for other goods and services will continue to decline amid the slump in demand, headline inflation will turn negative this month.”

UK deaths rise above 18,000

A further 763 people have died of coronavirus in UK hospitals, the latest figures show, taking the number of fatalities to more than 18,000.  

As of 5pm on Tuesday, 18,100 people have died in hospital after testing positive for Covid-19. The daily rise in deaths was lower than the previous 24 hour’s figure of 823, and suggests the death rate is slowly trending lower from its Easter weekend peak. 

Still, there are concerns that the real death toll could be much higher. 

The pandemic has already caused as many as 41,000 deaths in the UK, according to a Financial Times analysis of the latest data from the Office for National Statistics. The estimate is more than double the official figure, which only counts those who have died in hospitals after testing positive for the virus.

UK looks to expand testing to more key workers

George Parker in London

Downing St said it was looking to expand the number of people eligible for testing for coronavirus, as it seeks to hit its target of 100,000 tests by the end of April.

Some 104,000 NHS staff, care workers and their families have been tested in total, but ministers are expanding the scheme to include police, prisons, the court system and other key workers.

Latest figures showed there was capacity for over 41,000 tests but fewer than 20,000 were being carried out. Ministers say that a sharp fall in infection rates was one reason for the shortfall.

“As the number of cases in hospitals stabilises and starts to fall, that means fewer people are being tested,” Boris Johnson’s spokesman said, but added there were many people — especially in care homes — who badly needed tests.

Number 10 said new categories of workers were likely to be added to the list by the end of the week, with speculation that public transport workers and supermarket staff could soon be among those who qualify.

Home testing is being rolled out amid warnings that many drive-through centres were difficult to reach and particularly inaccessible to those people with Covid-19 symptoms who cannot travel on public transport.

Brazilian currency falls to record low

Brazil’s currency weakened on Wednesday to a new record low against the dollar, having now lost 25 per cent of its value since the start of the year, as investors grow increasingly uneasy about the laissez-faire policies being adopted by the federal government in response to the coronavirus pandemic.

The Brazilian Real reached R$5.38 against the dollar on Wednesday afternoon, down 1.3 per cent from Monday.

“Looking at the public health and political response to coronavirus, there are reasons [for investors] to be concerned,” said Alberto Ramos, head of Latam economics at Goldman Sachs. “Is this a huge problem? Yes and No,” he added, noting that a weaker currency is positive for the country’s export market.

While the country benefits in some ways from a weaker currency, the R$5.4 level against the dollar is approaching concerning territory, Mr Ramos said.

“The Central Bank needs to show its hand in a more visible way than it has done before,” he added, suggesting that it would need to consider currency interventions imminently, including dollar swaps.

Expectations are growing that Brazil’s central bank will cut interest rates – currently at 3.75 per cent – by a significant amount in the coming weeks to combat the coronavirus-fueled economic crisis.

European consumer confidence suffers record fall

Martin Arnold in Frankfurt

Consumer confidence in Europe has suffered a record monthly fall, approaching levels not seen since 2009, and underlining the heavy impact of the economic and financial turmoil caused by the coronavirus crisis.

The consumer confidence indicator for the EU fell 11.6 points to minus 22, and fell 11.1 points in the eurozone area to minus 22.7 points, according to a monthly survey published on Wednesday by the European Commission.

The evaporation of consumer confidence underlines how the coronavirus crisis has put many people’s jobs at risk, after vast numbers of companies were forced to close their doors to comply with government lockdowns to try and contain the spread of the virus.

Millions of people are being put on state-subsidised short-term leave programmes designed to avoid redundancies across Europe, in what is widely expected to be the deepest recession for decades.

The darkening sentiment across Europe adds to pressure on EU leaders ahead of their summit to discuss potential joint fiscal responses to the coronavirus pandemic. It also raises the stakes for the European Central Bank before it meets to discuss whether to further loosen monetary policy next week.

Eurostat, the statistics arm of the EU, said it had not been able to carry out this month’s survey in Italy, which has been the European country hit hardest by the pandemic.

Netflix raises $1bn in debt financing to fund new content

Netflix said that it will raise about $1bn in debt, a day after announcing that it had added more than twice as many subscribers as it had forecast in the first quarter.

The funds will be used to acquire new shows, produce original content and for possible acquisitions, the streaming platform said, as many studios are suspending production due to the coronavirus-induced restrictions in place.

Netflix said in its first quarter earnings call on Tuesday that it would continue raising debt to fund its content, although production has halted in almost all countries besides Iceland and South Korea.

US Treasury warns companies could be investigated for misusing aid

By James Politi in Washington

Steven Mnuchin, US treasury secretary, has warned companies could face investigation if they inappropriately access federal aid destined for small businesses and fail to return the money, as the Trump administration prepared to allocate more than $310bn in additional funds under the programme.

Mr Mnuchin said companies should look “very carefully” at the “certification” they needed to produce in order to access federal aid to small businesses, saying it was “questionable” whether many of them would qualify, in an interview with Fox Business Network today.

“If they pay the money back quickly, there will be no liability to Treasury or the SBA (Small Business Administration), if they don’t they could be subject to an investigation”, Mr Mnuchin said.

His comments follow a public backlash to revelations that a number of large public companies and restaurant chains had accessed the first $350bn of funding, crowding out smaller establishments.

In a high-profile move cheered by Mr Mnuchin, Shake Shack, the burger chain, returned its small business loan. Following a deal with congressional Democrats to replenish funding for the programme with an extra $310bn, the Treasury and SBA are preparing to accept a flood of new applications in the coming days.

The Trump administration has also pressed Harvard University to return $9m in funding it received through a separate federal aid scheme for higher education. Mr Mnuchin said he had spoken to the president of Harvard on Wednesday morning about the matter.

“[Harvard is] thinking seriously about whether it is appropriate for them to keep the money or give it to other institutions that need it,” he said.

Tyson indefinitely closes its biggest pork slaughterhouse

Gregory Meyer

Tyson Foods, the largest US meat packing company, has closed its top-producing pork slaughterhouse as coronavirus infects workers in the US food industry.

Tyson’s plant in Waterloo, Iowa will be closed “indefinitely,” the company said Wednesday, citing worker absences, Covid-19 cases and community concerns.

The plant can slaughter 19,500 head of hogs per day. Combined with closures at other pork plants, a quarter of the nation’s pork production capacity of more than 500,000 hogs a day stands idle, said Steve Meyer, an economist with Kerns and Associates. Wholesale pork prices have risen a third in the past week as the plant shutdowns curtail supplies headed to supermarket meat cases.

Meat packing plants rely heavily on workers standing close together in chilled rooms to kill, skin, butcher and package livestock and poultry. Covid-19 infections at Smithfield’s now-closed pork plant in Sioux Falls, South Dakota have made the city a centre of the state’s outbreak. Tyson earlier this week reopened its pork plant in Columbus Junction, Iowa at a curtailed pace after an earlier closure due to employees testing positive for the virus.

Waterloo is the seat of Black Hawk County, Iowa, which has 366 confirmed cases of Covid-19, according to Johns Hopkins University. Tyson said it will pay workers while the plant is closed.

“The closure has significant ramifications beyond our company, since the plant is part of a larger supply chain that includes hundreds of independent farmers, truckers, distributors and customers, including grocers,” said Steve Stouffer, Tyson Fresh Meats group president.

PE group Sycamore backs out of deal to buy Victoria’s Secret

Mark Vandevelde, James Fontanella-Khan and Sujeet Indap in New York

A $1.1bn take-private of Victoria’s Secret is on the point of collapse after US private equity group, Sycamore Partners, said L Brands breached the terms of the deal when it cut the pay of senior staff and furloughed store employees in response to the coronavirus pandemic.

Sycamore Partners notified executives at the company on Wednesday that it was backing out of the deal. “Whilst we acknowledge that the Covid-19 pandemic is an international tragedy and health emergency,” the private equity firm wrote, “we are equally certain that it does not excuse the performance of L Brands’ obligations” under the merger deal.

L Brands had agreed to continue business as usual across its operations “consistent with past practice” — a promise that Sycamore argues was breached when the company closed most of its 1,600 stores and began laying off workers or cutting their pay.

“Those obligations also included L Brands’ covenant not to, and to cause its subsidiaries not to, ‘change any cash management policies, practices, principles or methodologies used with respect to the Business’,” said the complaint.

Victoria’s Secret managers have said their actions were “consistent with the steps that retailers across the country have taken in response to the pandemic.”

Multiple deals that were signed before the covid-19 crisis have faced litigation from buyers getting cold feet.

Furniture supplier DFS to raise cash from shareholders

Jonathan Eley

Furniture supplier DFS has become the latest UK retailer to raise cash from shareholders using a fast-track placing route.

It plans to issue shares equivalent to 19 per cent of its existing capital – around £55m, based on its current market value – in an accelerated bookbuilt placing. The same method, which does not usually require a prospectus or shareholder approval, was used by WHSmith and Asos.

However, the DFS issue may require shareholder approval if the placing price – determined by the level of investor interest – is less than the nominal value of the company’s shares, which is an unusually high 150p. UK law prohibits the issuance of new stock at below par value, meaning a share split would be needed to create shares of a lower nominal value.

The group, whose stores in the UK, Ireland and Spain are all currently shut, said the placing and £70m of new credit facilities, along with cost saving measures, would make it “substantially more resilient”.

It continues to take orders online, with the order book inching up to £194m from £185m in late March.


Michael Bloomberg to co-ordinate ‘tracing army’ programme for New York

New York Governor Andrew said he had a “productive meeting” with President Donald Trump and has hammered out a plan that includes $1.3bn in federal funding for coronavirus tracing in the cash-strapped state and announced a coronavirus “tracing army” that will be spearheaded by Michael Bloomberg, the billionaire former mayor of New York City.

Mr Cuomo visited the White House on Tuesday afternoon following an escalation in tension between the governor and president last Friday over a request for the federal government to help with widespread testing that is a central pillar in the state’s plan to safely reopen its economy.

“We spoke truth, we spoke facts, we made decisions and we have a plan going forward. That was accomplished yesterday,” Mr Cuomo said of his meeting with Mr Trump.

Mr Cuomo said there was $1.3bn in federal funding available from the federal government for tracing efforts in the state.

The governor said a key part of that plan is establishing a “tracing army” across New York, New Jersey and Connecticut, that would attempt to track all the people a person diagnosed with coronavirus had come into contact with. 

Michael Bloomberg, who this year made an unsuccessful run to be the Democratic Party’s presidential nominee, has volunteered to coordinate and develop this tracing programme, which Mr Cuomo described as a “super ambitious undertaking”, and will make a financial contribution “upwards” of $10m.

“Michael Bloomberg will design the programme, design the training, he’s going to make a financial contribution, put together an organisation that will help hire the people … and get this all done like this,” the governor said, snapping his fingers.

The billionaire’s tracing programme will also be coordinated with Johns Hopkins University, his alma mater and where his name is attached to the college’s school of public health, and Vital Strategies, a public health organisation.

A further 474 people died in New York state over the past 24 hours, compared with 481 a day earlier, but Mr Cuomo said there continued to be encouraging trends in the decline of hospitalisations and intubations.

Laura Ashley brand ‘saved’ after being forced into administration

Jonathan Eley in London

The Laura Ashley fashion and furniture brand will endure a while longer after administrators PwC sold it to Gordon Brothers, the turnaround firm, for an undisclosed sum.

The sale does not include the stores or the ecommerce business, both of which remain in the hands of the administrators.

“The administrators continue to trade the ecommerce business and prepare for stores to reopen once permitted while they explore options to preserve as much of the retail, manufacturing and distribution operations in the UK and [the Republic of Ireland] as possible,” PwC said in a statement.

Laura Ashley, which had been owned by Malaysian conglomerate MUI since the late 1990s, had been in difficulty for some time before the coronavirus pandemic finally pushed it into administration.

Texplan, the group’s manufacturing division based in Wales, is currently making surgical scrubs for the NHS.

Pompeo accuses China of destroying coronavirus samples

Katrina Manson in Washington

US secretary of state Mike Pompeo has accused China of destroying coronavirus samples, thereby “making it impossible to track the diseases’s evolution”.

Mr Pompeo’s attack comes as critics have accused the Trump administration of seeking to distract from America’s handling of the pandemic at home and amid a historic collapse in US oil prices.

“Even after the [Chinese Communist Party] did notify the WHO of the coronavirus outbreak, China didn’t share all of the information it had,” he told reporters on Wednesday. “Instead it covered up how dangerous the disease is; it didn’t report sustained human-to-human transmission for a month until it was in every province inside of China; it censored those who tried to warn the world in order to halt the testing of new samples; and it destroyed existing samples.”

Mr Pompeo added the CCP had still not shared virus samples with anyone outside China, impeding efforts to understand how the virus emerged.

“These labs are still open inside of China,” said Mr Pompeo, adding many laboratories such as the Wuhan Institute of Virology were studying complex pathogens. “It’s important that those materials are being handled in a safe and secure way such that there isn’t accidental release.”

The US and China have repeatedly traded blows over competing theories about the possible emergence of the disease, which was first logged in December in the city of Wuhan and has since spread across the world. Mr Pompeo has on occasion referred to it as “Wuhan virus” and President Trump last week suspended US funding for the WHO, the UN body for global health tasked with responding to the pandemic, accusing it of being “China centric”. China at one point accused the US military of introducing the virus to the country and has made a point of extending assistance to other countries to help combat the disease, including much-needed protective equipment lacking in the US.

Mr Pompeo said on Wednesday the US was giving another $275m to assist countries at risk from the disease, bringing the total US contribution to more than $775m.

Free to read: US anti-lockdown protests

David Crow in New York and Patti Waldmeir in Chicago

In the past week, thousands of Americans in more than a dozen states have participated in protests against “stay at home” orders that have shut down huge parts of the country’s economy and precipitated a record rise in unemployment claims.

The protests are an extreme example of the challenges western democracies have faced in implementing lockdowns, and a potential harbinger of trouble ahead as they try to introduce mass testing and tracing to prevent a new spike of Covid-19 cases.

But dissenting attitudes could hamper efforts to combat the virus and introduce test-and-trace approaches being explored in Asia and Europe.

Read the article in full here

Senior UK Conservatives call for reset of China relations

Sebastian Payne, Helen Warrell and Laura Hughes in London

Senior Tories have called on the government to adopt a tougher stance towards China, citing growing concerns about Beijing’s handling of the coronavirus outbreak.

China hawks in the parliamentary party seized on comments at the end of last week by Dominic Raab, who is deputising for the prime minister while Boris Johnson recovers from coronavirus.

The foreign secretary warned that Britain could not return to “business as usual” with a country that the Tory party has spent most of the last decade tapping up for inward investment.

Senior Tory MPs and peers, from both wings of the party, including Chris Patten, the last governor of Hong Kong, and former leader Iain Duncan Smith, have told the Financial Times the government must now look to “reorientate” Sino-British relations.

Read the full story here

England’s chief medical officer says ‘unrealistic’ to expect sudden end to lockdown

Laura Hughes in London

The chief medical officer for England has said it would be “wholly unrealistic” to expect a sudden lifting of the lockdown and social distancing measures.

Speaking at the daily Downing Street briefing, Professor Chris Whitty warned coronavirus is a disease that is not going to be “eradicated” or “disappear”, so the public must accept that “we are working with a disease that we are going to be with globally for the foreseeable future.”

He said:

We have to be very realistic if people are hoping it’s suddenly going to move from where we are in lockdown to where suddenly into everything is gone, that is a wholly unrealistic expectation.

We are going to have to do a lot of things for really quite a long period of time, the question is what is the best package and this is what we’re trying to work out. …If you release more on one area, you have to keep on board more of another area so there’s a proper trade-off and this is what ministers are having to consider.”

Also appearing at the briefing, Gen Sir Nick Carter, chief of the defence staff, described military efforts to support the NHS as the “single greatest logistic challenge” he has come across over the course of his 40-year career.

Prof Whitty also said it was important for the public to understand that even in countries who started their “epidemic curve” earlier than in the UK, “the downward slope from the point which we change is a relatively slow one”.

“We should anticipate the same situation in the UK. We should not expect this to be a sudden fall away of cases,” he said.

As ministers come under pressure to deliver personal protective equipment (PPE) to NHS workers, Prof Whitty said stocks “at different points have been very, very close to the line” but said as far as he knew “we are not under water on anything”.

French deaths decline as government warns on nicotine hope

Victor Mallet in Paris

The daily hospital death toll from coronavirus continued its gradual decline in France on Wednesday after five weeks of a national lockdown, but Jérôme Salomon, director-general of health, said the epidemic remained “massive” and “severe”.

A further 336 deaths were recorded in hospitals, and 208 in old people’s homes and other care homes, with the total official toll reaching 21,340 since March 1. There has been a sharp increase in the national mortality rate that has peaked and has started to decline during the confinement of the population.

The net numbers of hospitalisations and new patients in intensive care continued their slow declines of recent days. Infections confirmed by tests reached 119,151.

Dr Salomon sounded a note of caution about preliminary findings from a Paris hospital this week that smokers were less numerous among hospitalised Covid-19 patients than in the general population, with one theory being that nicotine competes with the virus for access to receptors in the lungs and so protects smokers.

“The harmful effects of smoking must absolutely not be forgotten,” he said. “Smoking is the number one killer in France… Don’t confuse research hypotheses with proven effects.”

Staff at billionaire Lord Ashcroft’s Conservative website to take pay cut

George Parker in London

Staff at ConservativeHome, the website owned by the billionaire Michael Ashcroft, have been asked to take a 20 per cent pay cut, as a cost-cutting measure during the coronavirus crisis.

Sources close to the blog, beloved by Conservative activists and influential in Tory circles, say the move has caused annoyance among its small staff, not least because the owner has famously deep pockets.

According to the Sunday Times Rich List in 2017, Lord Ashcroft, former deputy chairman of the Conservative party, had wealth of £1.35bn, a figure similar to the gross domestic product of Belize, where he has business interests.

Mark Wallace, chief executive of ConservativeHome, said: “Like every business, ConservativeHome is negatively affected by the coronavirus and we’re exploring various temporary measures to navigate the pandemic while protecting jobs.”

The ConHome website lists six members of its team and confirms that it is owned by Lord Ashcroft. The peer was unavailable for comment.

Princeton will not accept federal aid allocated to it in Cares Act

Ortenca Aliaj in New York

Princeton University said it would not accept aid allocated to it by the Cares Act, one day after Donald Trump, US president, demanded that Harvard pay back the $9m it received in federal funds, citing its enormous endowment.

The New Jersey-based Ivy League college told the Financial Times that it had looked at whether it could use the $2.4m allocated to it by the Department of Education “in a manner consistent with congressional intent and guidance” and concluded that it would refrain from taking the sum.

America’s Ivy League universities have come under scrutiny for accepting taxpayer money while sitting on large endowments and catering to students who come from some of the country’s wealthiest families.

Harvard has borne the brunt of the criticism after several US members of congress pointed to its more than $40bn endowment, the largest in the world. Among them was US senator Ted Cruz who, in a Twitter post on Monday, urged his alma mater to return the funds, saying “you’re very rich; many people are hurting”.

While Princeton is the first of America’s elite universities to say it will not accept the funds, Harvard has refrained from responding to Mr Trump’s remarks on Tuesday.

US stocks climb 3% on gains for tech and energy

Wall Street extended its gains as it headed for its first rise in three sessions, driven by technology and energy stocks that pushed higher on a rebound in oil prices.

The S&P 500 was up 2.6 per cent. Technology led the way with a 4 per cent rise, while energy was close behind with a 3.6 per cent rise. The Nasdaq Composite advanced 3 per cent.

Oil prices surged, with West Texas Intermediate, the US crude benchmark, settling at $13.78 a barrel, up 19 per cent or about $2.21 a barrel, after Donald Trump stoked Middle East tensions, saying that he had ordered US warships to “shoot down and destroy” Iranian vessels if they posed a threat.

Elsewhere in markets, the yield on the US 10-year Treasury rose 0.05 percentage points to 0.6237 per cent. The dollar index, a gauge of the buck against a weighted basket of peers, rose 0.2 per cent to 100.42.

Republican senators press Fed and Treasury to make changes to support energy groups

James Politi in Washington

A group of Republican senators has pleaded for the US Treasury and the Federal Reserve to change the terms of federal aid to businesses struck by the coronavirus pandemic to make it easier for energy companies to access the money.

Ted Cruz of Texas and Kevin Cramer of North Dakota made the request on Wednesday, in a bid to allow oil and gas companies to benefit from Fed purchases of corporate debt under facilities established by a $2tn stimulus bill passed last month by Congress.

The rescue legislation allows the Fed to buy corporate debt as long as it was rated in the safer investment grade category, but opens the window to some purchases of bonds that fell into high-yield or junk terrain since March 22. But Mr Cruz and Mr Cramer told Steven Mnuchin, the Treasury secretary, and Jay Powell, the Fed chair, that they should shift that date to early March.

“Changing the date means company ratings would predate market manipulations from the Saudi Arabia and Russia oil dispute in addition to demand losses from Covid-19,” said the two senators, who were joined by nine other lawmakers from energy-producing states.

The senators also asked the Treasury and the Fed to show “additional flexibility” on credit scores, “allowing energy companies to access credit facilities”.

“Our energy producers should not be unfairly excluded from credit due to an arbitrary date, and their viability should be protected with enhanced support for their credit and access to capital,” the senators wrote.

“Assisting these companies could be the difference between maintaining our domestic energy production and workforce or shedding more US jobs and returning to dependence on foreign sources of oil.”

Mexico’s economy could contract up to 12% this year, BBVA forecasts

Jude Webber in Mexico City

In the most bearish forecast to date for Mexico, BBVA is now pencilling in a contraction of as much as 12 per cent this year for Latin America’s second-biggest economy.

“Given the paralysis and deterioration of domestic and global economic activity, we estimate a GDP contraction of between 6 per cent and 12 per cent,” the bank said in a note to clients. It said that more than 1m jobs could be lost.

Although Mexico has the new USMCA free-trade pact with the US and Canada in place which, together with the rearrangement of global supply chains, should help when the economy picks up, it said “the prolonged impairment of confidence due to questionable decisions that cast doubt on the government’s decision-making process implies a balance of lower levels of investment in the medium and long term”.

President Andrés Manuel López Obrador is betting on small loans to micro businesses and social programmes to help the economy weather the double whammy inflicted by coronavirus and the oil price shock.

He is opposed to taking on debt to fund a big stimulus, in part because of Mexico’s chequered history with indebtedness which led to the UK, Spain and France sailing to Mexico to reclaim unpaid debts in the 19th century and a bank bailout in the 1990s that the president said turned the private debts of a few into public debts.

But Carlos Urzúa, former finance minister, this week dismissed the package of measures announced so far, which maintain social programmes and controversial public refinery and infrastructure investments, as well as claim they will create 2m jobs. Writing in El Universal newspaper, he said: “It’s obvious that a plaster is no use when you have a haemorrhage.”

Harvard to turn down federal financial aid after public pressure

Harvard University said it would not accept $9m in financial aid allocated to it by the federal government’s Cares Act, bowing to pressure from the public and Donald
Trump that it refrain from taking the money.

The elite university said it would not take funds from the Higher Education Emergency Relief Fund, which is part of the government’s programme to cushion the impact of the coronavirus.

“Like most colleges & universities, Harvard has been allocated funds as part of the CARES Act. Harvard did not apply for this support, nor has it requested, received or accessed the funds,” it said in a series of messages posted to Twitter.

Harvard’s move follows that of Ivy League rival Princeton, which earlier this afternoon said it would refrain from accepting $2.4m allocated to it in the Cares Act.


US stocks bounce back alongside recovery in US crude oil price

US stocks rose on Wednesday, with a rise in oil prices lifting sentiment and spurring a recovery from equities’ steepest one-day drop in about three weeks.

The S&P 500 closed 2.3 per cent higher, led by energy and technology stocks, and had been up as much as 2.9 per cent. The benchmark went some of the way to recouping Tuesday’s 3.1 per cent fall, which was the steepest since April 1.

The Nasdaq Composite ended 2.8 per cent higher.

West Texas Intermediate, the US oil benchmark, settled 19.1 per cent higher at $13.78 per barrel. Earlier this week, active futures contracts traded in negative territory for the first time in history because of an expected drop-off in demand stemming from the coronavirus pandemic.

Government bonds were weaker, with yields rising. The yield on the benchmark 10-year US Treasury was up 0.04 percentage points at 0.61 per cent.

CSX withdraws outlook and reviews spending plans

CSX withdrew its previously issued financial guidance because of the economic uncertainty caused by the coronavirus pandemic.

The US rail operator also said on Wednesday that it was managing expenses and evaluating its capital expenditure outlook, according to a presentation that accompanied its earnings report.

CSX reported weaker earnings and revenue in the first quarter amid lower shipping volumes from coal and automotive. However, earnings per share of $1 topped analysts’ average estimate of 94 cents as costs declined, while overall revenue matched expectations.

Net income fell to $770m from $834m in the same period a year ago. Revenue hit $2.86bn, down 5 per cent.

Shares in CSX shed earlier gains in after-hours trading to tick 0.4 per cent lower.

Pakistan’s prime minister tests negative for coronavirus

Farhan Bokhari in Islamabad

Pakistan’s prime minister Imran Khan has tested negative for coronavirus, a Pakistani minister said late on Wednesday night. On Tuesday, Mr Khan’s office had said he would immediately take a test for the virus, after he met with the head of a large Pakistani charity who was subsequently found to be positive for the virus.

Firdous Ashiq Awan, the prime minister’s adviser with the rank of a minister for information and broadcasting, wrote on Twitter: “Prime minister Imran Khan was tested today for SARS-CoV-2 (the virus strain that causes coronavirus disease 2019 [COVID-19]). The test used was a polymerase chain reaction (PCR).” She added that the test result was negative.

News of a prominent visitor to Mr Khan’s office later found to be infected with coronavirus has prompted fresh questions over the prime minister and other prominent figures in his government freely meeting with visitors daily, including many who may not have taken a test for the virus.

“If everyone who works with the prime minister and people who meet him have to be first tested for the coronavirus, that will be a logistical nightmare,” one senior government official told the Financial Times. “I think we have to be vigilant for obvious signs [of coronavirus] like fever and cough among people who meet with top leaders in governemnt,” he added.

Las Vegas Sands suffers first-quarter loss

Las Vegas Sands swung to a loss in the first quarter as revenues more than halved from a year earlier because of the impact of the coronavirus outbreak.

“The impact of the Covid-19 pandemic on our business has been unprecedented, and I have never seen anything like it in my over 70 years in business,” Sheldon Adelson, chief executive, said on Wednesday.

The gambling company, which draws the lion’s share of its revenue from Macau and Singapore, struck an optimistic tone about the strength of its balance sheet, which “will enable us to emerge from this pandemic with all our promising future growth opportunities fully intact” and added that this would allow it to continue with previously announced capital expenditure programmes in its two Asian gaming hubs.

Net revenue in the quarter ended March 31 fell 51.1 per cent to $1.78bn, about $320m less than Wall Street forecasts. The company reported a net loss of $51m, compared with a net profit of $744m a year ago. The net loss, of 3 cents a diluted share, was below the mean forecast among analysts for 8 cents.

LVS shares have shed 40.6 per cent of their value so far this year, but were up 7.7 per cent in after-hours trade.

US death toll tops 42,000

The death toll from coronavirus in the US rose by more than 2,000 for the second consecutive day, pushing the nation’s total above 42,000.

A further 2,108 people died over the past 24 hours, according to data compiled on Wednesday by Covid Tracking Project, down from a record 2,674 the previous day.

New York, the hardest-hit state, suffered a 474-person rise in its daily death toll, to 15,302 overall. New Jersey and Michigan, the second and third worst hit states, had daily increases of 310 and 113 over the past 24 hours, down from record rates on Tuesday.

Since the outbreak began, 42,103 people in the US have died, according to Covid Tracking Project. Data compiled by Johns Hopkins University puts the total at 46,399, but counts so-called presumptive deaths in New York City that Covid Tracking Project does not.

Mexico’s $6bn bond sale attracts strong investor support

Jude Webber in Mexico City

Mexico sold $6bn in bonds, with strong appetite from investors, despite the coronavirus pandemic, oil price shocks and downgrades to its sovereign debt and that of the state oil company.

The finance ministry said the sale demonstrated “the enormous confidence of international investors in the country and the management of economic policy and public finances”.

It said that the financing operation did not represent additional debt above net levels approved by Congress in the budget. The sale was 4.75 times oversubscribed. According to the ministry, the issue had the greatest demand in Mexican history.

Mexico sold three new reference bonds – five, 12 and 31 years – and said the deal ratified its “ample access to capital markets at favourable conditions” despite the enormous recent volatility.

It sold $1bn in five-year bonds with a 3.9 per cent coupon and a 4.125 per cent yield; $2.5bn in 12-year paper with a coupon of 4.75 per cent and a yield of 5 per cent; and $2.5bn in 31-year debt with a 5 per cent coupon and a 5.5 per cent yield.

Demand totalled about $28.5bn, Mexico said, and 420 institutional investors from around the world took part.

The finance ministry did not close the door to future issues despite President Andrés Manuel López Obrador’s reluctance to take on debt to fund the coronavirus crisis reponse. It said that it would strategically monitor further opportunities to improve its debt profile.

Trump ‘strongly disagrees’ with Georgia governor’s decision to reopen state

Demetri Sevastopulo and Lauren Fedor in Washington

Donald Trump warned Georgia’s Republican governor that he “strongly” disagreed with his decision to reopen the economy from Friday, saying it was “totally egregious” to open spas, beauty salons and tattoo parlours.

Governor Brian Kemp earlier this week said he would re-open much of the economy from Friday and would allow residents to go to movie theatres and restaurants from Monday. The move was attacked by Democrats in the state, including Atlanta mayor Keisha Lance Bottoms who urged residents to remain at home.

“I disagree with him on what he’s doing,” Mr Trump said at the White House coronavirus news conference.

“I think it’s too soon,” Mr Trump added. “I told the governor very simply that I disagree with his decision, but he has to do what he thinks is right.”

Mr Kemp came under heavy criticism because the state has not yet met the guidelines outlined by the White House last week, which recommended keeping lockdowns in place until cases had fallen for 14 straight days.

Georgia was one of the last states to implement a stay-at-home order and is set to become one of the first to lift its restrictions. Mr Kemp ordered residents to shelter in place from April 3, weeks after many other states had gone into lockdown.

Two days earlier, he conceded that he had only just learnt that the deadly virus could be transmitted by people who did not exhibit any symptoms, which raised eyebrows given how quickly Covid-19 had spread through other cities in the US and across the world.

His decision to re-open the economy this week was slammed by the mayors of Savannah and Augusta, two of the state’s biggest cities, and also Stacey Abrams, the former Democratic minority leader of the state legislature.

Mr Kemp, a self-described ‘politically incorrect conservative’ who narrowly won the Georgia gubernatorial race over Ms Abrams in 2018, has been a fierce supporter of Mr Trump.

The warning by Mr Trump comes just days after he urged the residents of Michigan, Virginia and Minnesota – three states with Democratic governors – to “liberate” their states, arguing that some governors had gone too far.

Mr Trump has been criticised for sparking protests across the country against the shelter-in-place measures that health experts say remain essential.

South Korean economy suffers biggest contraction since financial crisis

Edward White in Wellington

South Korea’s economy suffered its deepest contraction since the global financial crisis as the coronavirus pandemic battered the country’s massive technology and industrial exporters.

Gross domestic product fell 1.4 per cent in the first three months of the year, the Bank of Korea reported on Thursday, the biggest drop since a 3.3 per cent drop in final three months of 2008.

The contraction compares to growth of 1.3 per cent in the fourth quarter of 2019 when hopes were building for a recovery in the country’s critical exports of computer chips and smartphones.

Sweeping lockdowns in China, South Korea’s biggest export market, in January and February led to production disruptions and softer demand for companies like tech giants Samsung, LG and SK Hynix and carmaker Hyundai. A rapid outbreak of Covid-19 in February in South Korea – which was for a time the worst affected country outside China – saw a further hit to the local demand for smaller businesses.

Despite South Korea’s success in stemming the outbreak, Moon Jae-in, the South Korean president, on Wednesday warned that the economic crisis stemming from coronavirus is only just beginning as he revealed a sharp increase in spending to deal with the fallout of the pandemic to almost $200bn.

Economists cautioned, however, that despite the record spending and low interest rates, the government’s moves might still be insufficient given the exposure of South Korea’s export-dependent economy to a global recession.

“The stimulus so far for South Korea is actually smaller than it looks because a lot of it is to stabilise financial markets – funds to purchase bonds and stocks – due to constraints of the BoK to purchase private debt,” Nguyen Trinh, an economist at Natixis, said.

Oh Seok-tae, a Seoul-based economist at Société Générale, said while the government has committed a lot of money through low-interest, long-term loans to smaller businesses, ordinary people were still struggling.

Delta Air Lines to raise a further $3bn

Claire Bushey in Chicago

Delta Air Lines is raising a further $3bn to shore up liquidity as it anticipates a 90 per cent plunge in revenue during the second quarter.

Executives said during the Atlanta company’s earnings call on Wednesday that Delta’s cash and cash equivalents would rise to $10bn by June from $6bn. The statement suggested the airline would raise additional funds on top of the $5.4bn it has raised since early March.

Delta will privately offer $1.5bn in secured notes to investors that mature in 2025. Typically, airlines use aircraft as collateral. Once that offer closes, it will borrow another $1.5bn, due in 2023.

Chief financial officer Paul Jacobson said the company expected revenue to recover “moderately” in the second half of the year, but “we are prepared for cash flow to remain negative through the end of the year”.

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