(Bloomberg) — Texas and Florida halted drinking at bars and Arizona reported a surge in infections as the U.S. copes with a worsening coronavirus outbreak, mostly in Sun Belt states whose governors were quick to reopen businesses over the past two months.
Vice President Mike Pence painted a reassuring picture amid a surge in U.S. cases, saying outbreaks are concentrated in a few areas and as more young people fall ill, more are likely to survive.
The European Union moved closer to recommending that travelers from the U.S. shouldn’t be allowed to enter the bloc after July 1. Tests of 302 NBA basketball players found 16 were positive, and they will be in isolation until cleared by a doctor.
Global Tracker: Cases top 9.6 million; deaths pass 490,000Meat shortages reopen costly path to small U.S. slaughterhousesCovid-19 is exacerbating the churn in retailing: QuickTakeVaccine plan to end pandemic’s worst phase to cost $18 BillionStrokes, altered mental states seen in some acute casesIn Silicon Valley, a $300 million bet on the return to officesFor Black Brazilians, virus is deepening painful inequalities
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White House Focusing on 16 States (12:55 p.m. NY)
The U.S. Coronavirus Task Force is focused on 16 states where new cases are rising, Vice President Mike Pence said in Washington, with the remaining states “reopening safely and responsibly and seeing low and steady cases and not seeing a rise.”
“We believe we’ve made progress but as we are reminded as we see cases rising across the South, that we still have work to do,” Pence said. The vice president said he will travel to Texas, Arizona and Florida, where cases are spiking.
Pence also noted about half the new cases are in Americans under the age of 35. “We know so far in this pandemic, that younger Americans are less susceptible to the serious outcomes of this virus,” he said.
Italy Schools to Reopen Sept 14 (12:45 p.m. NY)
Italian schools will reopen on Sept. 14 in “safety conditions,” Prime Minister Giuseppe Conte said during a press conference on Friday.
Additional 1 billion euros ($1.1 billion) investment on education expected, Conte said. The Italian plan for the European Recovery Fund will include a “chapter” on schools, Conte said.
United Restores China Flights (12:30 p.m. NY)
United Airlines Holdings Inc. plans twice-weekly flights between San Francisco and Shanghai via Seoul beginning July 8, restoring service halted in March by the virus. United also will reinstate service between Chicago and Tokyo, with new service to Haneda Airport.
Delta Air Lines this week said it will restart service between Seattle and Shanghai via Seoul on June 25, operating twice per week.
Cuomo Offers Aid to 3 States (12:15 p.m. NY)
New York Governor Andrew Cuomo is offering help to Arizona, Texas and Florida — where cases are surging — as state hospitalizations drop to a low. Those states’ “course was incorrect,” he said.
“We are in position to provide equipment, staff, knowledge, ventilators, National Guard assistance, whatever they need,” Cuomo said on a call with reporters. “We are in good shape right now. I worry about it every day: caution, caution, caution.”
Cuomo said 1.3% of the state’s tests are coming back positive, the lowest rate in the country. At the height of the virus, New York had 50% positivity rate.
EU Moves Toward Barring U.S. Travelers (11:50 a.m. NY)
The European Union moved closer to recommending that travelers from the U.S. shouldn’t be allowed to enter the bloc after July 1, according to a draft list being considered by officials.
EU diplomats have mostly agreed that travelers from 18 countries, including Canada and South Korea, should be allowed into the EU because the domestic level of new Covid-19 cases meets the bloc’s criteria, according to a copy of the list seen by Bloomberg.
Twelve other countries are still being considered, according to the copy. The U.S. isn’t on the list. Discussion is continuing and the list could still change.
Florida Suspends Drinking at Bars (11:50 a.m. NY)
Florida suspended consumption of alcohol at bars across the state effective immediately, the state’s first major policy shift in response to a surge in Covid-19 cases this month.
The office of Governor Ron DeSantis confirmed the move in an email Friday.
Florida reported 122,960 Covid-19 cases on Friday, up 7.8% from a day earlier, compared with an average increase of 4.1% in the previous seven days. The one-day increase of 8,942 was the most ever.
Arizona Cases Jump 5.4% (11:35 a.m. NY)
Arizona’s new Covid-19 cases increased by 3,428 to 66,458, a 5.4% gain that exceeded the prior week’s daily average of 2.9%, the state reported Friday.
The number of deaths rose by 45 to 1,535.
Governor Doug Ducey said Thursday that hospitals are likely to hit surge capacity “very soon,” with the number of cases and hospitalizations expected to worsen in the next two weeks. Earlier in the day, the state reported the number of people admitted to hospitals had jumped by 183 to 2,453, the biggest single-day increase since the state began tracking the number.
NBA, Union Say 5.3% of Players Test Positive (11:30 a.m. NY)
The National Basketball Association and NBA Players Association announced 5.3% of players have tested positive for Covid-19 and will remain in isolation until meeting “public health protocols for discontinuing isolation” and are cleared by a doctor. Of 302 players tested, 16 were positive, according to a statement. The positive rate is slightly below the 6.1% national seven-day average, according to data from Johns Hopkins University.
Two Phoenix Suns players tested positive on Tuesday, the Arizona Republic reported. Since then players on the Indiana Pacers, Sacramento Kings and Denver Nuggets tested positive.
The NBA season is scheduled to restart July 31 in Orlando, with training camps opening July 11 at Walt Disney World.
Houston Area to Declare Highest Level of Emergency (11:10 a.m. NY)
Harris County, Texas, will declare a Level 1 emergency on Friday as the Covid-19 outbreak intensifies.
County Judge Lina Hidalgo, the highest-ranking county executive in the region that includes Houston, will make the declaration at a media briefing scheduled for 11 a.m. Central time, according to a person with knowledge of her plans who wasn’t authorized to discuss them publicly.
A Level 1 emergency is equivalent to a recommendation that residents stay at home as much as possible to prevent or slow the spread of the virus.
Florida Reports Most New Cases Ever (10:40 a.m. NY)
Florida reported 122,960 Covid-19 cases on Friday, up 7.8% from a day earlier, compared with an average increase of 4.1% in the previous seven days. The one-day increase of 8,942 was the most ever.
Deaths among Florida residents reached 3,366, an increase of 1.2%, according to the report, which includes data through Thursday.
Seen on a rolling seven-day basis, Florida’s new cases reached 33,212, the highest level ever, and about seven times the rate when the state started reopening on May 4.
Cumulative hospitalizations of Florida residents rose by 212, or 1.5%, to 13,987. On a rolling seven day-basis, they reached 1,213, the highest level since at least May 1.
The new rate of people testing positive for the first time climbed to 13.1% for Thursday, from 8.9% on Wednesday.
American to Sell Full Flights (10:15 a.m. NY)
American Airlines Group Inc. will sell flights to capacity starting on Wednesday, abandoning limits on passenger loads to promote social distancing just as the pandemic worsens in parts of the U.S. largely spared earlier this year. Customers will still be notified when they’re booked on crowded flights and can change to a different flight at no cost, the airline said in a statement. In addition, starting Tuesday, American will ask customers to certify that they have been free of Covid-19 symptoms for the previous 14 days.
United Airlines Holdings Inc. hasn’t guaranteed to block seats. By contrast, Delta Air Lines Inc. has said it will keep middle seats open through Sept. 30. Southwest Airlines Co. has committed to block middle seats unless customers are traveling together.
Texas Closes Bars as Cases Spike (10:05 a.m. NY)
Bars in Texas must close by noon local time under an order from Governor Greg Abbott after the Covid-19 positive-test rate surpassed 11%.
Under an executive order issued Friday, restaurants must limit occupancy to 50% effective June 29, and river-rafting businesses must close completely, according to a statement from the governor’s office. Abbott said the measures were intended to target activities linked to the surge in virus cases across the Lone Star state.
Manhattan Office Rents Likely to Tumble (9:50 a.m. NY)
Manhattan’s office rents are likely to plummet to an eight-year low if the U.S. economy doesn’t recover quickly from the pandemic. Asking rents could fall 26% to about $62.47 a square foot in a prolonged recession, real estate services firm Savills said in a report. That’s the lowest level since 2012, it said.
Some city offices have reopened, though many buildings are empty, and the city faces a long recovery with workers wary of public transit and dense workplaces.
“Many assume that when the stay-at-home measures are lifted, there will still be Covid-19 fears,” Savills said. “These fears will likely remain until a vaccine or antibody therapy is developed and widely available.”
Portugal Has Most New Cases Since May (9:18 a.m. NY)
Portugal reported 451 new coronavirus cases on Friday, the biggest increase since May 8, taking the total to 40,866, the government said. Health Minister Marta Temido said the situation in Portugal remained under control. Most new cases have been found in the greater Lisbon region, where authorities have tightened restrictions in some areas and increased testing after new clusters were identified.
Intu Collapse, Air France-KLM Bailout: Companies Roundup (9 a.m. NY)
British mall-owner Intu Properties Plc has collapsed into administration after failing to agree a reprieve from lenders. The company, which owns nine of the U.K’s top 20 malls, has applied to appoint three administrators from KMPG LLP, according to a statement on Friday. The shopping centers will continue to trade, it said.
Air France-KLM’s Dutch arm will get a 3.4-billion-euro ($3.8 billion) bailout from the Netherlands after weeks of wrangling over how much help the carrier needed to ride out the coronavirus crisis. The airline faces job cuts and environmental curbs on its operations in return for the rescue.
Meanwhile, Aston Martin plans a sale of shares as part of a slew of moves to shore up a balance sheet damaged by the coronavirus. The sale of almost 20% of its current equity comes on top of discussions to secure trade financing, the British carmaker said. And Swedish clothing retailer Hennes & Mauritz AB is laying the groundwork for a debut issue of bonds after store closures and weak consumption due to the pandemic led to its first loss in at least a decade.
U.S. Consumer Spending Rebounded in May; Incomes Fell (8:55 a.m. NY)
U.S. consumer spending surged by a record in May — while remaining below pre-pandemic levels — as Americans spent relief payments and ventured out of their homes to newly reopened stores and restaurants.
Household outlays rose 8.2% from the prior month, the sharpest increase in more than six decades worth of data, after falling by the most on record in April, a Commerce Department report showed Friday. The median estimate in a Bloomberg survey of economists called for a 9.3% jump.
Incomes declined 4.2%, just short of a record decrease, after posting the largest-ever increase in April that was driven mostly by household relief payments.
Trump Administration Eyes Testing Groups: Wash. Post (8:09 a.m. NY)
The Trump administration is considering testing people for coronavirus in groups, Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told the Washington Post. Under this method, one test would be used on a pool of samples from several people. If it came back negative, researchers would move on to another pool. If it’s positive, then each individual in the sample gets tested. Fauci said the current approach isn’t working.
Biden Would Require Mask-Wearing If President (7:25 a.m. NY)
Democratic presidential nominee Joe Biden said that if he were in the White House now, he would “insist” that everyone wear masks in public. Asked if he’d use executive actions to try to require behavior changes on masks, Biden said he would.
“I would do everything possible to make it required that people had to wear masks in public,” he said in an interview with CBS affiliate KDKA.
Spain to Extend Furlough Program (7:15 a.m. NY)
Spain’s government agreed to keep its furlough program in place through the end of September, an extension that ensures hundreds of thousands of workers maintain their jobs and a portion of their paychecks for at least several more months.The amplification of the plan provides a major financial reprieve for companies that will allow them to continue to bring more and more employees back to work as the economy shifts into recovery mode. Firms have been reincorporating tens of thousands of workers each day during the past weeks.
Trump Rally Drew People From Counties Experiencing Spikes (7 a.m. NY)
Mobile-phone location data from people who attended President Donald Trump’s rally in Oklahoma show that most came from outside Tulsa, hailing from at least 44 counties spread across 12 states. Covid-19 is on the rise in 33 of them.
Trump supporters traveled from across the Oklahoma region for the June 20 event, according to a Bloomberg analysis of data from SafeGraph. They didn’t fill the arena though and public health experts say the extra space may have lessened the risks of transmission.
Even so, it was far from a small gathering. Tulsa’s fire department estimated the crowd at the BOK Center numbered 6,200, making it the largest indoor event in the U.S. since March.
Bar for Bailouts ‘Exceptionally High,’ Sunak Says (6:05 a.m. NY)
Chancellor of the Exchequer Rishi Sunak said he will set an “exceptionally high” bar for companies seeking taxpayer-funded bailouts during the coronavirus pandemic as he prepares to set out measures to revive the economy.
“This is not my money,” Sunak said in a Bloomberg Television interview on Friday. “It’s not the government’s money. This is taxpayers’ money. I shouldn’t be sitting here trying to pick winners.”
Sunak vowed to protect jobs as the nation emerges from a lockdown that’s plunged the economy into recession and left millions of workers depending on government support.
Crowded U.K. Beaches Stir Virus Concern (5:34 p.m. HK)
Summer heat saw crowds of daytrippers descend on U.K. coastal resorts, leading one southern town to declare a major incident and Health Secretary Matt Hancock to warn that he could close beaches to head off any potential new round of coronavirus cases.
Speaking to BBC Radio 4 on Friday, Environment Secretary George Eustice denied the beach crowding was linked to the government’s decision to ease the lockdown next week, instead blaming hot weather that meant “a lot of people had the same idea.” “The British weather being what it is, perhaps this will be a short-lived phenomenon,” he said.
Germany Virus Tracing App Has 80% Success (5:07 p.m. HK)
Germany’s coronavirus tracing app is 80% accurate in showing whether a user comes within 2 meters of an infected person for 15 minutes, said Juergen Mueller, chief technology officer and head of data operations at SAP SE. The Corona-Warn-App is a joint project between SAP and telecommunications company Deutsche Telekom AG.
Rwanda Reinstates Lockdown in Parts of Capital (4:47 p.m. HK)
A fresh surge in coronavirus cases prompted Rwanda’s government to place six districts of the capital, Kigali, back under a strict lockdown. Kigali registered 21 new cases this month, the Ministry of Local Government said in a statement on Twitter. That brings the total to 850 cases and two deaths since the first case was diagnosed in March.
Rwanda last month eased one of Africa’s most stringent lockdowns while maintaining a night-time curfew as a precaution. Famed for its endangered mountain gorillas, the country has reopened tourism activities to visitors arriving on chartered flights on condition that they are confirmed to be virus-free 72 hours before arrival.
ECB’s Lagarde Warns of Complicated Recovery (4 p.m. HK)
European Central Bank President Christine Lagarde said the recovery from the coronavirus crisis will be “restrained” and will change parts of the economy permanently.
While the worst might be over for global economy, it’ll take a time for the “phenomenal” jump in precautionary savings to trickle into higher investment and spending, she said. The recovery will be “incomplete” as trade is unlikely to return to pre-crisis levels and productivity may be weaker.
“We probably have passed the lowest point and I say that with some trepidation,” Lagarde said. “The airline industries, the hospitality industries, the entertainment industries are going to come out of that recovery process in a different shape, and some of them will probably be hurt irremediably.”
Russia Has Fewest New Cases Since April (3:45 p.m. HK)
Russia reported 6,800 new confirmed coronavirus infections over the past day, taking the total to 620,794, the lowest number of new cases since April 29. Another 176 people died over the past day, bringing total death toll to 8,781.
U.S. Infections Show Peak Still Ahead, German Minister Says (3 p.m. H.K.)
German Health Minister Jens Spahn said surging new infections in the U.S. show that the pandemic has yet to peak. “This is an urgent warning to us in Germany to remain vigilant,” Spahn said in a tweet. “Wherever the virus is given a chance it spreads.”
The coronavirus infection rate in Germany fell to the lowest in three weeks, while the number of new cases remained well below the level at the height of the outbreak. The reproduction factor — or R value — dropped to 0.59 on Thursday from 0.72 the previous day, according to the latest estimate by the country’s health body, the Robert Koch Institute.
Sweden’s Covid Expert Lashes Out at WHO (2:47 p.m. HK)
Sweden’s state epidemiologist has lashed out against the World Health Organization, accusing it of misinterpreting Covid-19 data and overstating the health risks his country faces.
Anders Tegnell, the architect of Sweden’s hands-off response to fighting the pandemic, said the WHO made a “total mistake” by putting the nation on a list that shows where “accelerated transmission has led to very significant resurgence that, if left unchecked, will push health systems to the brink once again in Europe.” The list, which includes 11 countries, fails to take into consideration the nuances in Sweden’s approach to testing, according to Tegnell.
Sweden has one of the world’s highest Covid-19 mortality rates, with more deaths per 100,000 than the U.S., according to Johns Hopkins University data. Still, at no point has Sweden’s Covid crisis overburdened its state-funded universal health-care system.
AstraZeneca in Talks to Supply Potential Vaccine to Japan (2:30 p.m. HK)
AstraZeneca Plc said it’s agreed to talks with the Japanese government on the supply of a coronavirus vaccine candidate it’s developing with Oxford University.
AstraZeneca will supply Daiichi Sankyo and Meiji Holdings group companies Meiji Seika Pharma and KM Biologics with undiluted solution, and the four companies will work together on vial filling, storage and delivery.
Southeast Asia Eyes Travel Bubbles (2:25 p.m. HK)
Malaysia is in talks with Singapore and Brunei to create “green lanes” for less restricted travel, as governments around the world seek to reopen their borders without a resurgence in coronavirus cases.
Thailand’s prime minister, Prayuth Chan-Ocha separately said in a speech at the Asean Summit that the Association of Southeast Asian Nations nations should consider travel agreements among those who are ready to create special channels for business travelers.
Trump Hails Falling Mortality Rate (11:55 a.m. HK)
U.S. President Donald Trump said “flare ups” of the coronavirus will be addressed as needed after data showed a record number of new cases in the country.
“Coronavirus deaths are way down,” Trump also said in a tweet hailing a decline in the mortality rate.
U.S. Breaks Two-Month-Old Record for New Cases (10:49 a.m. HK)
The resurgent coronavirus produced a record number of new cases in the U.S., topping the peak seen in April during the initial outbreak, after many Americans let down their guard on social distancing.
Total cases in the U.S. surpassed 2,418,000, according to data compiled by Johns Hopkins University, marking the highest daily increase in more than two months.
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Biden offers 'build back better' approach to reviving economy – BNN
Joe Biden launched his plan on Thursday to revive the economy from the coronavirus-related recession with a promise to “build back better” than what existed before the crisis.
Offering a contrast with President Donald Trump’s insistence that the economy is bouncing back, the Democratic nominee framed his economic agenda for the general election. The economy is the one policy area on which he lags Trump in public opinion polls.
One part of the plan is intended to foster manufacturing and encourage innovation, adopting some ideas from his progressive primary rivals but avoiding the big-ticket proposals like the Green New Deal.
“The challenges faced today are among the biggest in our history,” he said at a metalworks factory in Dunmore, Pennsylvania, a few miles away from his childhood home in Scranton, a place that’s been synonymous with the blue-collar workers who helped Trump win the state in 2016.
“I have no illusion how tough the road ahead is going to be for our country,” Biden added.
But he said he’s still “an optimist” because the American people are up to those challenges if they follow his lead.
“I see a different America than Trump. One that despite all our flaws and shortcomings and failures is still, after more than two centuries, dedicated to equality, liberty and human decency,” he said.
Biden also said the idea that U.S. companies only bear responsibility to their shareholders is “an absolute farce” because corporations have a duty to workers and their country.
“It’s time corporate America pay their fair share of taxes,” Biden said, reiterating his plan to raise the current corporate tax rate back to the 28 per cent it was during the Obama administration from the current 21 per cent.
The former vice president’s economic plan is divided into four areas, the first of which he addressed in some detail on Thursday: a push to buy American and create manufacturing jobs, costing at least $700 billion; building infrastructure and clean energy; advancing racial equity; and modernizing the “caring” economy such as child-care and elder-care workers and domestic aides.
He said he would roll out his plans to rebuild U.S. infrastructure and emphasize clean energy next week.
Biden covered a wide range of issues, from what he called Trump’s lack of empathy for people suffering from the current crises to the removal of Confederate monuments. He took from his standard stump speech his admiration for the middle-class and unions, which he says “built this country.”
On Thursday, he proposed US$400 billion in additional federal purchases of products made by American workers over the course of his first term — based on a proposal that his primary opponent Senator Elizabeth Warren offered — as well as US$300 billion for federally funded research and development. In all, the Biden campaign estimates that its proposals on manufacturing and buying American will create 5 million jobs.
He didn’t offer a plan to pay for these initiatives.
“When the federal government uses taxpayers’ money we should use it to buy American products and support American jobs,” he said of his buy American plan.
Steve Moore, a conservative economist and informal adviser to Trump, said the plan represents “a radical plan of wealth redistribution, not wealth creation.”
“I believe if this plan were implemented all of the economic gains from the Trump era would be erased and we would be thrust into a second great depression that would hurt the poor and minorities most,” he said in a statement.
There was small progress toward recovery in the jobs numbers released Thursday. Applications for unemployment benefits in the U.S. declined last week by more than projected, easing concerns of a renewed downturn in the labor market after several large states reported an increase in coronavirus cases.
Trump has made buy-American policies and protecting the U.S. steel and aluminum industry a centerpiece of his administration but some domestic manufacturers have complained his actions didn’t go far enough.
Most of Wall Street wilts amid worries on virus, economy – Yahoo Canada Finance
NEW YORK — Most of Wall Street wilted Thursday on worries that the economy’s recent improvements may be set to fade as coronavirus cases keep climbing.
The S&P 500 lost 0.6%, with three in four stocks within the index falling. The sharpest drops hit oil companies, airlines and other stocks whose fortunes are most closely tied to a reopening and strengthening economy. Treasury yields also sank in another sign of increased caution.
The Dow Jones Industrial Average dropped 361.19 points, or 1.4%, to 25,706.09, while the 17.89 point fall for the S&P 500 to 3,152.05 was just its second loss in the last eight days.
Smaller stocks sank more than the rest of the market, which often happens when investors are downgrading their expectations for the economy. The Russell 2000 index of small-cap stocks lost 28.48, or 2%, to 1,398.92.
The Nasdaq composite was an outlier as investors continue to bet big tech-oriented stocks can keep growing almost regardless of the economy’s strength. It added 55.25, or 0.5%, to 10,547.75 and hit another record.
“The broad equity market is navigating through a zone of uncertainty,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
“There are ample reasons for caution,” he said. “Clearly there’s uncertainty surrounding the impact and duration of this virus.”
Thursday’s headline economic report showed that a little more than 1.3 million workers filed for unemployment claims last week. It’s an astoundingly high number, but it’s also down from 1.4 million the prior week and from a peak of nearly 6.9 million in late March.
The improvements help validate investors’ earlier optimism that the economy can recover as states and other governments relax restrictions put in place earlier this year to slow the coronavirus pandemic. Such optimism helped the S&P 500 rally back to within 7% of its record, after earlier being down nearly 34%.
But economists point to a troubling slowdown in the pace of improvements, including moderating declines in the four-week average of jobless claims. Further gains for the job market are going to be more difficult, said Patrick Schaffer, global investment specialist at J.P. Morgan Private Bank. The U.S. unemployment rate is currently 11.1%.
“The initial jump was the easy part,” he said. “The reality is the labour market continues to face enormous headwinds.”
Investors are worried that worsening infection levels across swaths of the U.S. South and West and in other global hotspots could derail the budding recovery. Some states are rolling back their reopenings, while others are ordering people arriving from hotspots to quarantine.
“When the restrictions were relaxed in the beginning part of June, you saw parts of the tangible economy do really well,” Schaffer said. “A lot of that has been unwound as we’ve seen a resurgence in case count and some restrictions being put in place.”
Markets have been quick to react to infection and hospitalization rates in Florida and other big Sun Belt states in particular. Thursday’s losses for stocks accelerated after Florida reported the largest daily increase in deaths yet from the pandemic, with its cumulative death toll topping 4,000.
Such concerns helped push Treasury yields lower. The yield on the 10-year note, which tends to move with investors’ expectations for the economy and inflation, sank to 0.60% from 0.65% late Wednesday.
The price of gold also held above $1,800 per ounce. Gold tends to rise when investors are worried about the economy, and on Wednesday it touched its highest price since September 2011. After flipping between small gains and losses, gold for delivery in August dipped $16.80 to settle at $1,803.80.
In the stock market, the sharpest losses hit companies whose profits tend to rise and fall most closely with the strength of the economy. Energy stocks dropped 4.9% for the biggest loss among the 11 sectors that make up the index. Exxon Mobil sank 4.1%, and ConocoPhillips fell 6.6%. Benchmark U.S. crude dropped $1.28 to settle at $39.62 per barrel.
Financial stocks were also particularly weak, with JPMorgan Chase down 2.2% and Citigroup down 2.8%, as a struggling economy raises the threat of borrowers failing to repay their loans.
Airlines and other companies that desperately need the pandemic to ease so customers can return also slumped. United Airlines lost 7.3%, retailer Kohl’s sank 7.2% and mall-owner Simon Property Group fell 5.3%.
Walgreens Boots Alliance dropped 7.8% for one of the biggest losses in the S&P 500 after it said it lost $1.7 billion in the latest quarter as the pandemic kept many of its customers around the world at home.
Companies across the country are preparing to report their second-quarter results in upcoming weeks, and forecasts are uniformly dismal.
Stocks in overseas markets were mixed, though China continued its huge run. Stocks in Shanghai added another 1.4%, bringing its gain for July to 15.6% and further stoking worries that speculators are in charge of the market.
Stan Choe, Damian J. Troise And Alex Veiga, The Associated Press
U.S. economy may be stalling out as viral outbreak worsens – CP24 Toronto's Breaking News
Christopher Rugaber, The Associated Press
Published Thursday, July 9, 2020 3:47PM EDT
WASHINGTON – The U.S. economy is stumbling as the viral outbreak intensifies, threatening to slow hiring and deepening the uncertainty for employees, consumers and companies across the country.
Coronavirus case counts are rising in 38 states, and the nation as a whole has been shattering single-day records for new confirmed cases. In six states representing one-third of the economy – Arizona, California, Colorado, Florida, Michigan, and Texas – governors are reversing their reopening plans. Reopening efforts are on pause in 15 other states.
The reversals are keeping layoffs elevated and threatening to weaken hiring. More than 1.3 million people applied for unemployment benefits last week, the Labor Department said Thursday, down from 1.4 million the previous week but still roughly double the pre-pandemic weekly record. Applications had fallen steadily in April and May but have barely declined in the past month.
Jobless claims “are stalled out at a new normal of over a million new claims every week,” said Daniel Zhao, an economist at Glassdoor. “The virus is in the driver’s seat and we’re along for the ride until the current public health crisis is resolved.”
Some economists have even warned that a so-called “double-dip” recession, in which the economy shrinks again after rebounding, could develop. Consumers, the primary driver of U.S. economic growth, are pulling back on spending in restaurants and bars, especially in the hardest-hit states. Some small businesses are closing, either under government orders or because of a lack of customers, according to private data.
Several companies have warned in recent days that more layoffs are coming. Levi’s, the iconic jeans maker, said it will cut 700 corporate jobs. United Airlines has warned 36,000 of its employees – nearly half its workforce – that they could lose their jobs in October. (Airlines aren’t allowed to cut jobs until then as a condition of accepting billions of dollars in government rescue aid.) Motorcycle maker Harley Davidson said it will eliminate 700 corporate jobs.
The pandemic drove Walgreens to a deep loss in the most recent quarter, with customers staying home or limiting shopping to essential supplies from grocery stores. Walgreens will cut 4,000 jobs at its pharmacy chain Boots in the United Kingdom. Bed Bath & Beyond said it will close 200 stores over the next two years as its sales have slid.
The uncertainty fanned by the pandemic has led many CEOs to abandon their forecasts for second-quarter results. Just as with the economy, forecasters say it could take years for corporate earnings to return to the levels they were at before the pandemic.
With reported viral cases surging, restaurant visits are falling in Arizona, California, Florida, and Texas, which together account for half of new confirmed infections. This week, in Arizona, restaurant traffic was down 65% from a year earlier, worse than the 50% year-over-year drop two weeks earlier, according to data from reservation app OpenTable. In Florida, traffic was down 57%, compared with 45% two weeks before.
Last week, applications for U.S. unemployment benefits spiked in Texas, Nevada, Tennessee and Louisiana – states where confirmed cases of the virus are intensifying. They also jumped in New Jersey and New York, where the pandemic is mostly under control, but where reopening steps have been postponed.
Applications dropped in California and Florida, though in California they remained high, with more than 267,000 claims. That is more people than were applying each week for unemployment benefits in the entire country before the pandemic hit. Jobless claims also declined in Michigan and Colorado.
The total number of people receiving jobless benefits fell 700,000 to 18 million. That suggests that some companies are continuing to rehire a limited number of workers. An additional 1 million people sought benefits last week under a separate program for self-employed and gig workers that has made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.
In New Jersey, about 4,000 people had expected to return to their jobs last week at casinos in Atlantic City, after Gov. Phil Murphy said they could fully reopen. But Murphy later said the casinos couldn’t reopen their restaurants and bars because indoor dining was too risky. Employees who had hoped to return to work feel whipsawed.
“I wanted this nightmare to go away,” said Mineli Polanco, a beverage server at Borgata, a hotel and casino. “That first call was such a relief: things were going back to normal. Then the second call came, and it was a new nightmare.”
Signs of a weakening jobs picture suggest a turnaround from last week’s jobs report for June, which showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1% from 13.3%. But the June jobs report reflected surveys of Americans that were conducted in the middle of that month – before the pandemic flared up again. And even counting that hiring gain, the economy has regained only about one-third of the jobs that vanished in March and April.
Credit card data from both Bank of America and J.P.Morgan Chase show that spending has slipped in the past two weeks, even in states that don’t have sharp outbreaks.
“This suggests that renewed fears about the virus, rather than government restrictions, are driving the pullback in activity,” said Andrew Hunter, senior U.S. economist at Capital Economics, a forecasting firm.
Among retailers, the number of shifts worked changed little last week after steady increases in previous weeks, according to data from Kronos, which makes scheduling software. David Gilbertson, a vice-president at Kronos, said this indicates that consumer demand in many cases hasn’t picked up enough to justify more employees.
“Everything that’s going to be open is open,” Gilbertson said. “Now, we just need more people to come in and start spending money before things can pick up again.”
The renewed threat of job losses is arising just as a federal program that provides $600 a week in unemployment benefits, on top of whatever jobless aid each state provides, is to expire at the end of this month. Congressional leaders have said they will take up some form of a new rescue package when lawmakers return later this month from a recess.
Administration officials have expressed support for additional stimulus. But Senate Republicans have opposed extending the $600 a week in unemployment benefits, mainly on the ground that it discourages laid-off people from returning to work. House Democrats have pushed to extend the $600 a week through January.
In an interview Thursday on CNBC, Treasury Secretary Steven Mnuchin suggested that the administration might support an extension of supplemental unemployment aid but at a reduced level.
“We’re going to make sure people are (incentivized) to go back to jobs,” Mnuchin said.
AP Writer Wayne Parry in Atlantic City contributed to this report.
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