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Trump Tests Negative; Singapore Economy to See Hit: Virus Update – BNN

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(Bloomberg) — President Donald Trump has tested negative for Covid-19 and is no longer infectious to others, his doctor said. A study showed that the proportion of Americans dying from the coronavirus is the highest in the developed world.

Prime Minister Boris Johnson will close bars and pubs in the worst-hit parts of England to control a resurgence of the virus. Singapore’s central bank warned the city’s economy faces “deep scarring” from the pandemic.

The World Health Organization’s director-general urged countries not to pursue “herd immunity,” saying the vast majority of people haven’t yet been infected and questions remain about the virus’s long-term effects.

Key Developments:

  • Global Tracker: cases pass 37.6 million; deaths top 1.07 million
  • U.S. Hot Spots: Covid-19 soars in red states as Trump returns to trail
  • Top U.K. medic warns hot spot curbs aren’t enough to stop virus
  • Summers says Covid-19 will end up costing U.S. $16 trillion
  • Trump rallies raise concern about spread, Fauci says
  • A second bout of Covid infection may be far worse, study shows

Subscribe to a daily update on the virus from Bloomberg’s Prognosis team here. Click CVID on the terminal for global data on coronavirus cases and deaths.

Singapore Economy Faces Deep Scarring: MAS (7:22 a.m. HK)

Singapore’s central bank chief said as much as 20% of the city-state’s economy faces “deep scarring” from the pandemic. Aviation and tourism are a worry, especially with an expected slow recovery in travel, Ravi Menon, managing director of the Monetary Authority of Singapore, said at a virtual event hosted by the Institute of International Finance on Monday. About 10% to 20% of the economy faces scarring from the virus, he said.

“What is going to happen to that industry when the planes haven’t flown, the pilots haven’t flown for months on a stretch?” said Menon. “It’s not like picking up after taking two months off. When you take two years off, it’s very different.”

Trump Rallies Raise Concern About Spread: Fauci (5:35 p.m. NY)

President Donald Trump’s planned campaign rallies this week — starting with one on Monday night in Florida — threaten to advance the spread of the coronavirus, warned Anthony Fauci, the top U.S. infectious disease expert.

“Look at it purely in the context of public health,” Fauci said on CNN. “We know that that is asking for trouble when you do that. We’ve seen that when you have situations of congregant settings where there are a lot of people without masks, the data speak for themselves.”

Trump Tests Negative, Doctor Says (5:28 p.m. NY)

President Donald Trump has tested negative for Covid-19 on consecutive days, a week after being released from the hospital for treatment of the disease, White House doctor Sean Conley said.

“This comprehensive data, in concert with the CDC’s guidelines for removal of transmission-based precautions, have informed our medical team’s assessment that the President is not infectious to others,” Conley said in a memo.

Cuomo Touts N.Y. Infection Rate (5:02 p.m. NY)

New York’s 1.1% positive test rate for Covid-19 remains among the lowest in the U.S., as the state increased the number of tests to a record 834,342 last week, Governor Andrew Cuomo said.

Cuomo contrasted New York’s commitment to increased testing with states that have reduced diagnostic testing, such as Florida, where he said the positive-test rate was 11.7%, and Texas, with a 7.6% rate.

“There are some states that have taken the politics of denial and turned it into science fiction. If you test less you will find fewer cases, that’s a laughable concept,” Cuomo said in a briefing Monday afternoon.

Pandemic’s U.S. Cost Seen at $16 Trillion (4:30 p.m. NY)

The Covid-19 pandemic will exact a $16 trillion toll on the U.S.. about four times the cost of the Great Recession, former U.S. Treasury Secretary Lawrence Summers and fellow Harvard University economist David Cutler wrote in an essay published in the Journal of the American Medical Association.

About half of that amount is related to lost gross domestic product as a result of economic shutdowns and the ongoing spread of the virus, while the other half comes from health losses including premature death and mental and long-term health impairments, Cutler and Summers said.

The $16 trillion amount is equal to about 90% of annual U.S. GDP; it’s also more than twice as much as the U.S. has spent on wars since Sept. 11, 2001, according to the essay.

Czech Republic Shuts Schools, Restaurants (4:25 p.m. NY)

The Czech government tightened social distancing rules and closed down schools, restaurants and bars through early November. It also banned public alcohol consumption and limited outdoor gatherings to six people.

The country of 10.7 million is suffering the most acute epidemic among EU states. New infections reached a record of 8,618 cases on Friday, leapfrogging Spain as the bloc’s top hot spot based on the two-week cumulative number of cases per capita, according to the European Center for Disease Prevention and Control.

California Studying Theme Park Openings (4:20 p.m. NY)

California Governor Gavin Newsom said he is sending a team to visit reopened theme parks in other states, as his administration argues with the industry over guidelines for welcoming visitors back to still-shut attractions such as Disneyland.

In an update with reporters on Monday, Newsom said he wanted first-hand accounts of how well safety measures seem to be working in theme parks elsewhere that have been allowed to reopen. The governor also said the state may set different guidelines for large-scale amusement parks and smaller attractions such as civic piers or Ferris wheels, saying they faced different risks.

WHO Says 180 Nations in Vaccine Push (1:35 p.m. NY)

China’s joining of a global push to make coronavirus vaccines accessible for developing nations brings to 180 the number countries participating in the World Health Organization-backed initiative — representing 90% of the global population, Soumya Swaminathan, the WHO’s chief scientist, said Monday. While the U.S. hasn’t joined the $18 billion effort, called Covax, the breadth of participants is encouraging, Swaminathan said.

Meanwhile, WHO Director-General Tedros Adhanom Ghebreyesus urged countries not to pursue “herd immunity.” The vast majority of people haven’t yet been infected and questions remain about how long immunity lasts and what long-term effects Covid-19 creates, he said.

“Herd immunities are achieved by protecting people from a virus, not by exposing them to it,” he said. “Never in the history of public health has herd immunity been used as a strategy for responding to an outbreak, let alone a pandemic. It’s scientifically and ethically problematic.”

Texas Deploys Medical Teams to El Paso (1:16 pm NY)

Texas dispatched 75 nurses, respiratory specialists and other medical personnel to El Paso in response to a surge in Covid-19 cases, Governor Greg Abbott said on Monday. Masks and other personal protective equipment are also being delivered.

“This surge in medical personnel and PPE will help support El Paso’s hospitals and first responders as we mitigate the spread of this virus,” Abbott said in a statement.

The El Paso region has a higher percentage of hospital beds occupied by virus patients than anywhere else in Texas, according to state health department figures. The border town is seeing cases climb at a similar rate to Houston, which has almost five times El Paso’s population.

Boris Johnson Shuts Pubs in U.K. Hot Spots (12 p.m. NY)

U.K. Prime Minister Boris Johnson announced new restrictions to control the surge in coronavirus, with bars and pubs closing in the worst-hit parts of the England from Wednesday.

Johnson set out his plan for a three-tier system of Covid alert levels, set at medium, high, and very high, to simplify the imposition of lockdown measures.

The toughest measures will be brought into force from Wednesday in the Liverpool city region of northwest England, where the outbreak is spreading fastest, the prime minister told Parliament on Monday.

Dutch Prepare New Measures as Cases Rise (9:03 a.m. NY)

The surge in new virus cases continued in the Netherlands, with a record 6,854 cases, confirmed in the 24 hours until Monday morning, news agency ANP reported, citing the country’s health agency. More than 41,000 cases were reported in the past seven days. Dutch Prime Minister Mark Rutte will likely announce stricter measures tomorrow, according to local media. Without new measures, medics warned that about 5,000 coronavirus patients will be in hospital next month, meaning 70% of regular care would have to be scrapped, ANP said.

©2020 Bloomberg L.P.

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Japan raises view on demand, but says economy in severe situation – SaltWire Network

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By Daniel Leussink

TOKYO (Reuters) – Japan’s government upgraded its view on consumption in a monthly report in October on stronger demand for electronics and higher travel spending, but cautioned broader economic conditions remained severe due to the coronavirus pandemic.

Authorities maintained their assessment that the world’s third-largest economy was showing signs of picking up from the fallout of COVID-19, which included a hit to Japan’s exports from a slump in global demand.

“The Japanese economy remains in a severe situation due to the novel coronavirus, but it is showing signs of picking up,” the government said in its October economic report.

The economy suffered its worst postwar contraction in the second quarter and analysts expect any rebound to be modest.

The government already has announced $2.2 trillion in economic stimulus in response to the virus crisis, and analysts polled by Reuters said it should compile a third extra budget for the current fiscal year.

The government said the impact from policy measures at home and improvement in economic activity overseas supported hopes for a continued rebound in the economy.

But it also flagged the risk that coronavirus infections could further weigh on domestic and overseas economies.

While many countries eased coronavirus restrictions earlier this year, some have had to resume curbs as they face a second wave of infections.

Japan’s government upgraded its view on private consumption for the first time in seven months due to more robust domestic demand for household electronics and higher nationwide hotel occupancy rates, especially in Hokkaido in northern Japan.

“It’s very encouraging that consumption is picking up,” Economy Minister Yasutoshi Nishimura said at a news conference after the cabinet approved the report.

“While capital spending, exports, production and employment are improving, it of course can’t be said (economic conditions) have completely recovered so the overall assessment was left unchanged,” he said.

The government stuck to its assessment that exports are picking up, according to the report.

But it downgraded its view on imports for the first time in seven months due to relatively weak shipments from the United States and the Asian region, a Cabinet Office official said.

The government’s assessment of the remaining components in the report remained unchanged.

(Reporting by Daniel Leussink; Editing by Ana Nicolaci da Costa and Kim Coghill)

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Japan raises view on demand, but says economy in severe situation – The Journal Pioneer

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By Daniel Leussink

TOKYO (Reuters) – Japan’s government upgraded its view on consumption in a monthly report in October on stronger demand for electronics and higher travel spending, but cautioned broader economic conditions remained severe due to the coronavirus pandemic.

Authorities maintained their assessment that the world’s third-largest economy was showing signs of picking up from the fallout of COVID-19, which included a hit to Japan’s exports from a slump in global demand.

“The Japanese economy remains in a severe situation due to the novel coronavirus, but it is showing signs of picking up,” the government said in its October economic report.

The economy suffered its worst postwar contraction in the second quarter and analysts expect any rebound to be modest.

The government already has announced $2.2 trillion in economic stimulus in response to the virus crisis, and analysts polled by Reuters said it should compile a third extra budget for the current fiscal year.

The government said the impact from policy measures at home and improvement in economic activity overseas supported hopes for a continued rebound in the economy.

But it also flagged the risk that coronavirus infections could further weigh on domestic and overseas economies.

While many countries eased coronavirus restrictions earlier this year, some have had to resume curbs as they face a second wave of infections.

Japan’s government upgraded its view on private consumption for the first time in seven months due to more robust domestic demand for household electronics and higher nationwide hotel occupancy rates, especially in Hokkaido in northern Japan.

“It’s very encouraging that consumption is picking up,” Economy Minister Yasutoshi Nishimura said at a news conference after the cabinet approved the report.

“While capital spending, exports, production and employment are improving, it of course can’t be said (economic conditions) have completely recovered so the overall assessment was left unchanged,” he said.

The government stuck to its assessment that exports are picking up, according to the report.

But it downgraded its view on imports for the first time in seven months due to relatively weak shipments from the United States and the Asian region, a Cabinet Office official said.

The government’s assessment of the remaining components in the report remained unchanged.

(Reporting by Daniel Leussink; Editing by Ana Nicolaci da Costa and Kim Coghill)

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Four ways to rescue the economy from the pandemic – The Conversation US

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In many western countries, COVID-19 infection rates are rising again. For some like the UK, France and Spain, it appears that the second wave of the pandemic is already here. The science also tells us that we may see a further upsurge in 2021. We do not know how effective early vaccines will be, and the rollout of vaccination programmes will be gradual.

A major issue for governments is the extent to which they have the fiscal firepower to protect jobs and economic activity. In the UK, the government’s spring and summer measures to protect businesses and jobs were expected to add £192 billion to the budget deficit, increasing the debt-to-GDP ratio from 85.4% in 2019 to 106.4% by March 2021.

These are the highest levels of debt since the early 1960s, and record budget deficit levels for peacetime. And yet the second wave of COVID-19 is going to strain the fiscal response much further. Chancellor Rishi Sunak’s newly revamped job support scheme and other measures to help businesses suffering under the latest restrictions will cost further billions.

To get a possible sense of where this might be heading, the Institute for Fiscal Studies in June modelled for a scenario in which there was a second wave of COVID-19 in the fourth quarter of 2020 and targeted regional lockdowns in the first half of 2021. It predicted that this would produce a budget deficit of over 20% of GDP this year – equivalent to second world war levels – and a debt-to-GDP ratio of nearly 120% by 2024-25.

If this is the kind of situation that many countries are now facing, what options are open to governments, and what key indicators should they focus on?

1. Growth first, sound money second

Governments must prioritise resuming economic growth from 2021 onwards. Put simply, this will require them to go easy on raising taxes or cutting spending quickly to stabilise the debt-to-GDP level. The fiscal correction which would be required to stabilise public finances will be less if a faster recovery can be engineered.

Governments must focus on public investments, particularly those aimed at boosting research and development spending and productivity growth. Many observers have recommended that governments put money into greening the economy. Not only will this stimulate growth in sectors for the future, it will also help address the climate crisis.

2. Build confidence

There needs to be a clear strategy to restore economic confidence, which is inextricably linked to people’s confidence in how the pandemic and its economic fallout is being managed. Even before the second wave took hold, it was clear that the economic recovery was slowing during the summer in many advanced economies.

The OECD reported in September that Google data on people’s shopping and recreational activity (as a proxy for what they are consuming from social businesses) had not returned to pre-pandemic levels. Order books in most advanced economies (except China) did not fully recover either.

Retail is still a hard sell (unless you’re Amazon).
EPA

It’s clear that consumer and business confidence cannot fully bounce back until uncertainty on the duration of the pandemic begins to subside. This is one reason why a number of economists have urged countries like the UK, where the economic hit has been worse, to focus on protecting employment. The furlough scheme in the UK should probably have been extended into this second wave, and the chancellor’s latest expansion of the job support scheme looks like a partial U-turn.

3. Test and trace still vital

Linked to this need to reduce uncertainty, there is no trade-off between health and the economy. Countries which have done better at keeping infection rates low have also done well at reducing the economic slump.

Some of that success with infections may have been good fortune, or early action in closing travel down quickly in early 2020. But countries such as Finland and Germany also had a strong capacity for testing and tracing and very quickly built it up further. Even at this stage, countries like the UK need to look at whether test and trace can be quickly improved, even at the cost of increased investment.

4. More targeted support

As the recovery begins to strengthen during 2021, a key conundrum for policymakers will be whether to prioritise stimulating aggregate demand in the economy, such as using tax cuts, or more targeted support measures for particular sectors or parts of the workforce.

It has recently been said that the recovery after a second wave might be more W-shaped as a whole, but K-shaped for individual sectors. In other words, while sectors like online retail and technology/software are booming, others like conventional retail, travel and hospitality will take a long time to recover.

Business support may need to switch to a more sectoral approach. The UK has done a little here with the “eat out to help out” scheme and now small monthly grants for firms in sectors like hospitality and leisure.

Hotel concierge talking to a taxi driver
Sectors like hospitality need more help than others.
EPA

Similarly, governments will have to focus their support on those in the labour market for whom the “scarring effects” of unemployment will be most serious. For instance, the crisis will particularly affect the job prospects of young people whose transition from education to work is being disrupted. At the recovery stage, support will therefore need to be switched to job creation – for example, by lowering employer national insurance contributions for employers creating new jobs.

We are entering a pivotal period in our fight against COVID-19. While there is no denying the challenges ahead, we are also better prepared and more knowledgeable than in March. Policymakers must use this to their advantage and craft an economic response which is comprehensive and nimble in equal measure.

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