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Stocks rally worldwide on hopes for coming economic recovery – Yahoo Canada Finance

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Stocks rally worldwide on hopes for coming economic recovery

NEW YORK — Stocks rose again Tuesday, part of a strong and worldwide rally for markets, after a big rebound in buying at U.S. stores and online raised hopes that the economy can escape its recession relatively quickly.

The S&P 500 climbed 1.9% for its third straight gain, bringing it back within 8% of its record set in February. Gains have built in recent weeks as reports bolster investor expectations that the worst of the downturn may have already passed.

Continuing, immense support from the Federal Reserve is also calming markets, and its chair said Tuesday that the central bank will continue to use all its tools to cushion the blow of the worst recession in decades. But trading remains very skittish across markets as worsening coronavirus trends in several global hotspots raise the possibility that all the improvements could unravel.

The S&P 500 shot to an early 2.8% gain, lost nearly all of it at one point and then rallied back. By the end of Tuesday, the index was up 58.15 points at 3,124.74.

The Dow Jones Industrial Average rose 526.82, or 2%, to 26,289.98, and the Nasdaq composite climbed 169.84, or 1.7%, to 9,895.87.

“The markets have been looking forward to the economy reopening, and that’s a large part of the story for the next few months,” said Bruce Bittles, chief investment strategist at Baird.

“My feeling is that while reopenings and things get better, it won’t be without some backsteps, and I think it’ll be a rocky few months more for the markets.”

Retail sales jumped 17.7% from April to May, more than double economists’ expectations, to retrace some of their record-setting plunges in March and April as businesses reopened across the country. It follows earlier reports that the U.S. job market unexpectedly strengthened last month.

Economists at IHS Markit said this could be the shortest recession on record for the United States, perhaps just a couple months.

Among other encouraging signs spurring markets worldwide: Researchers in England said they have the first evidence that a drug can improve survival from COVID-19, one that is already widely available and cheap.

Underpinning all of the market’s strength is continued aid coming from central banks, which have repeatedly come to the economy’s rescue. The Federal Reserve helped turn markets around on Monday after it said it will buy individual corporate bonds as part of a previously announced program to support lending markets.

“The Fed has flooded the economy with liquidity,” said Randy Frederick, vice-president of trading and derivatives at Charles Schwab.

And with lots of cash sitting uninvested in money market accounts, the market has more potential fuel for its next leg higher, he said. “People are just waiting for any good news to jump in and drive that higher.”

Still, caution continues to run through markets. A record number of fund managers in Bank of America’s monthly survey say the stock market is overvalued following its nearly 40% surge since late March.

The rally has also been showing some cracks recently as investors worry that a possible resurgence of infections could push governments to reinstate lockdown measures to slow the spread of the virus.

Analysts on Tuesday cited discouraging trends in Florida, Texas and China. And even if the stay-at-home orders don’t come back, worried consumers and businesses could pull back on their spending.

Skepticism has been high about the stock market’s run since it began climbing since hitting a bottom in late March, down 34% from its record. The huge backstops from the Fed and Capitol Hill helped halt the declines.

More recently, investors have been pushing up shares of companies that would benefit from a reopening economy on expectations that activity can rebound as governments relax shutdown restrictions put in place to slow the spread of the virus.

Such stocks were again leading the market on Tuesday. Smaller stocks were among the market’s biggest gainers, which often happens when investors are getting more optimistic about the economy. The Russell 2000 index of small-cap stocks rose 2.3%.

Nordstrom jumped 12.9% for one of the biggest gains in the S&P 500, leading a group of retailers that stand to benefit if shoppers return to stores.

The yield on the 10-year Treasury rose to 0.74% from 0.70% late Monday. It tends to move with investors’ expectations for the economy and inflation.

In Asia, Japan’s Nikkei 225 jumped 4.9%, South Korea’s Kospi surged 5.3% and the Hang Seng in Hong Kong rose 2.4%. In Europe, Germany’s DAX returned 3.4%, France’s CAC 40 rose 2.8% and the FTSE 100 in London added 2.9%.

Benchmark U.S. crude oil for July delivery rose $1.26 to settle at $38.38 a barrel Monday. Brent crude oil for August delivery rose $1.24 to $40.96 a barrel.

Stan Choe, Damian J. Troise And Alex Veiga, The Associated Press

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Long-term strategies to control COVID-19 must treat health and economy as equally important – EurekAlert

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Strategies for the safe reopening of low and middle-income countries (LMICs) from months of strict social distancing in response to the ongoing COVID-19 pandemic must recognise that preserving people’s health is as important as reviving the economy, argue an international team of researchers.

The team also say that strategies need to be based on local epidemic growth rate at the time, social and economic costs, existing health systems capabilities and detailed plans to implement and sustain the strategy.

The COVID-19 pandemic has been responsible for over half a million deaths globally. Many LMICs responded to the pandemic by introducing a number of measures from physical distancing to strict social distancing.

These measures have proved relatively successful in containing the disease and limiting the number of deaths in places where the risk of transmission is high, public health systems and usage are suboptimal and awareness of disease prevention practices is low. However, they have often come with tremendous negative social, economic and psychological effects.

To prevent further negative impacts of lockdown, many countries are now looking to ‘reopen’, risking population health, especially given shortcomings in surveillance infrastructure and poor diagnostic capabilities.

In a paper published in the European Journal of Epidemiology, a team of epidemiologists from the University of Cambridge, the University of Bern, BRAC University and the National Heart Foundation in Bangladesh, have examined three community-based exit strategies, and recommend their scopes, limitations and the appropriate application in the LMICs.

Dr Rajiv Chowdhury from the University of Cambridge, lead author of the paper, said: “Successfully re-opening a country requires consideration of both the economic and social costs. Governments should approach these options with a mind-set that health and economy both are equally important to protect – reviving the economy should not take priority over preserving people’s health.”

The three approaches considered are:

*Sustained mitigation

Sustained ‘mitigation-only’ approaches such as those adopted in the United Kingdom, Switzerland and other European countries, involve basic prevention measures such as mask wearing, physical distancing and the isolation of positive cases after testing.

However, the researchers point out that the relative success and ease of implementation of these approaches in high-income settings was aided by a number of factors. For example, high-income countries have the capacity to implement mass testing, population surveillance and case isolation to contain the epidemic, in addition to a high number of trained contact tracers operating in a relatively small and sparse population and high levels of adherence to the measures, including home quarantine and hygiene advice.

By contrast, in LMICs, a sustained mitigation-only approach may be unfeasible due to poor or absent nationwide population surveillance, contact tracing, testing infrastructure and critical care. For example, LMICs generally have limited supply of ventilators (around 48,000 for India’s 1.3 billion people), personal protective equipment, trained healthcare personnel and safe working conditions, compromising the healthcare system’s effectiveness.

*Zonal lockdowns

Zonal lockdowns involve identifying and ‘cordoning off’ new outbreak clusters with a high number of cases, keeping contact between zones low and containing the disease within a small geographic area.

However, the authors point out that any successful implementation of zonal lockdown requires regular data feedback operations in real time to identify hotspots, including information on newly confirmed cases, updated region-specific reproduction and growth rates, and deaths by age. This may be especially difficult to introduce in LMICs due to the absence of widespread population surveillance on random selections of the population and poor reporting and testing capabilities – for example, Pakistan conducts only 0.09 tests daily per 1,000 individuals compared to 0.52 in France.

Additionally, control of transmission within zones may be an enormous undertaking. In India, where this approach has been employed, the infection size within a cordoned zone can be as high as 100-200 times that outside the zone.

Countries seeking to introduce such measures should establish within the lockdown zone public health measures, including house-to-house surveillance and case-referral systems, and emergency services. They should also create buffer zones to reduce the rates of transmission from outside the zone. Such measures may only be effective when overall population transmission is relatively low and reducing.

*Rolling lockdowns

Intermittent rolling lockdowns are now advocated by the World Health Organization in various LMICs. These involve implementing strict social distancing for a set number of days before a period of relaxation. Rolling lockdowns may be particularly useful in LMICs with dense populations, where this is a high potential for contact, weak health systems and poor contact tracing.

A modelling study published by the team in May showed that a system involving 50 days of strict lockdown followed by 30 days of relaxation, enabling the economy to ‘breathe’ and recuperate, could reduce the reproduction number to 0.5, reduce the strain on health systems and considerably reduce the number of deaths compared to a situation with no lockdown.

Professor Oscar Franco, of the University of Bern and senior author of the paper, said: “Rolling lockdowns need be flexible and tailored to the specific country. The frequency and duration of the lockdowns or relaxed periods should be determined by the country based on local circumstances. They don’t necessarily need to be nationwide – they can also involve a large zone or province with very high incidence of COVID-19.”

Dr Shammi Luhar of the University of Cambridge and co-author of the paper, added: “These three strategies should not be considered as one or the other. A country should further adapt and could combine them as needed.”

###

Reference

Chowdhury, R et al. Long-term strategies to control COVID-19 in low and middle-income countries: an options overview of non-pharmacological interventions; 13 July 2020

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Jordan presses sweeping tax evasion crackdown to aid ailing economy – The Globe and Mail

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Jordan’s Prime Minister Omar al-Razzaz speaks to media during a news conference in Amman, Jordan on April 9, 2019.

Muhammad Hamed/Reuters

Jordan’s Prime Minister Omar al-Razzaz promised on Sunday to deepen a crackdown on tax evasion that officials say has deprived the country’s cash-strapped economy of billions of dollars in revenue in recent years.

The government has gone after senior businessmen and former politicians suspected of tax dodging, money laundering and customs evasion in a weeks-long campaign that has gained greater urgency with the hit to state finances from the COVID-19 pandemic.

“Protecting public money and fighting corruption is a national duty,” Mr. al-Razzaz said in his weekly television address to the country.

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Tax authorities have raided around 650 companies so far, sometimes accompanied by security forces, according to officials who say this is the biggest campaign to combat tax evasion in decades.

The government said it had frozen the assets of dozens of companies and businessmen on suspected tax evasion charges. It added that it would track offshore havens where wealthy Jordanians have long parked cash to avoid taxes.

Some critics have accused the government of using the campaign to carry out a witch hunt against its political enemies, including some of Jordan’s leading business figures, including former ministers and senior politicians.

Officials deny that, saying the goal is to ensure justice and that no one is above the law.

The government has been using its wider powers under a state of emergency since March to give prosecutors and the main anti-corruption agency greater powers, and stiffen penalties.

A two-month coronavirus lockdown has crippled Jordanian businesses and slashed state revenues by tens of millions of dollars, leading to the sharpest economic contraction in two decades.

The government expects the economy to shrink by 3.5 per cent this year, a far cry from an International Monetary Fund (IMF) estimate of 2-per-cent growth before the pandemic.

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The aid-dependent country, already undertaking a tough three-year IMF reform program, tapped international debt markets this month to borrow US$1.75-billion.

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Jordan presses sweeping tax evasion crackdown to aid ailing economy – TheChronicleHerald.ca

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By Suleiman Al-Khalidi

AMMAN (Reuters) – Jordan’s Prime Minister Omar al-Razzaz promised on Sunday to deepen a crackdown on tax evasion that officials say has deprived the country’s cash-strapped economy of billions of dollars’ revenue in recent years.

The government has gone after senior businessmen and former politicians suspected of tax dodging, money laundering and customs evasion in a weeks-long campaign that has gained greater urgency with the hit to state finances from the COVID-19 pandemic.

“Protecting public money and fighting corruption is a national duty,” Razzaz said in his weekly television address to the nation.

Tax authorities have raided around 650 companies so far, sometimes accompanied by security forces, according to officials who say this is the biggest campaign to combat tax evasion in decades.

The government said it had frozen the assets of dozens of companies and businessmen on suspected tax evasion charges. It added that it would track offshore havens where wealthy Jordanians have long parked cash to avoid taxes.

Some critics have accused the government of using the campaign to carry out a witch hunt against its political enemies, including some of Jordan’s leading business figures, including former ministers and senior politicians.

Officials deny that, saying the goal is to ensure justice and that no one is above the law.

The government has been using its wider powers under a state of emergency since March to give prosecutors and the main anti-corruption agency greater powers, and stiffen penalties.

A two-month coronavirus lockdown has crippled Jordanian businesses and slashed state revenues by tens of millions of dollars, leading to the sharpest economic contraction in two decades.

The government expects the economy to shrink by 3.5% this year, a far cry from an International Monetary Fund (IMF) estimate of 2% growth before the pandemic.

The aid-dependent country, already undertaking a tough three-year IMF reform programme, tapped international debt markets this month to borrow $1.75 billion.

(Reporting by Suleiman Al-Khalidi; Editing by Andrew Cawthorne)

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