Closed Coronavirus: Bed Bath & Beyond to close 200 stores as pandemic weighs on sales — as it happened


Chancellor Rishi Sunak unveils a VAT cut to 5% for the hospitality sector goods and services as well as a job retention bonus of £1,000 a worker

Daily increase in US coronavirus infections jumps back above 50,000

Peter Wells in New York

The rise in US coronavirus cases jumped back above 50,000 on Tuesday and the number of new deaths rose to levels last seen in early June.

A further 51,888 people in the US tested positive for coronavirus over the past 24 hours. according to Covid Tracking Project, from 47,375 on Monday. This is the fifth day in seven that new cases have increased by more than 50,000 a day since first crossing the milestone on July 1.

A further 919 people died from coronavirus, the biggest one-day jump since June 3 — excluding a one-time revision for earlier fatalities in New Jersey on June 25 that resulted in it reporting 1,877 deaths that day.

Figures on Tuesday tend to tick up owing to weekend reporting delays.

Texas reported a record one-day increase of 10,028 new coronavirus cases, becoming the fourth state to experience a one-day rise of more than 10,000.

Florida (7,347), California (6,090), Arizona (3,653), Georgia (3,406), Louisiana (1,936), North Carolina (1,346) and Tennessee (1,359) had the largest increases in cases, but remained down from record highs. Washington (1,087) reported more than 1,000 cases for the first time.

Arizona (a record 117) and California (111) reported the most fatalities from coronavirus over the past day. Texas (60) and Mississippi (44) both had record daily increases in deaths.

Texas reports record daily increase of more than 10,000 new cases

Peter Wells in New York

Texas became the fourth US state to report more than 10,000 new cases of coronavirus in a single day in another sign of the disease’s quickening spread through the west and south of the nation.

A further 10,028 people tested positive over the past 24 hours, the state’s health department revealed on Tuesday afternoon, a record increase, and nearly double the 5,318 reported on Monday. Figures can be inflated on Tuesdays owing to weekend reporting delays.

Florida last week became the first state after New York to report more than 10,000 cases in a single day, with California passing the milestone yesterday.

Texas and those three others are the only US states with more than 200,000 confirmed cases of coronavirus since the pandemic began.

There are now 9,286 people in Texas who are hospitalised with Covid-19, more than any other state and compared to second-ranked California with about 7,500 currently hospitalised.

That has heaped pressure on Texas’ health care system. Dallas county on Monday had its biggest one-day increase in Covid-19 hospitalisations, while intensive care beds in Houston area hospitals last week surpassed their normal capacity owing to an influx of coronavirus patients.

Asia-Pacific stocks retreat after global rally fizzles

Stock markets in Asia-Pacific dip after a global rally ended as traders weighed the impact of rising coronavirus cases on the economic recovery.

In Japan, the Topix edged down 0.1 per cent, Australia’s S&P/ASX 200 was down 0.2 per cent, while the Kospi in South Korea added 0.3 per cent.

Authorities said on Tuesday that Melbourne would be placed under lockdown for six weeks in a bid to control a spike in cases, in a move that could slow the recovery in the region.

Overnight on Wall Street, the S&P 500 ended down 1.1 per cent, ending a six-day global rally. The US is also grappling with outbreaks, with the number of new coronavirus cases reported in the US on Tuesday rising to almost 52,000. Levi Strauss became the latest retailer to announce store closures in hard-hit areas.

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Levi Strauss is considering plans to bring the shutters back down on dozens of recently reopened stores in parts of the US hardest hit by the new surge in coronavirus infections.

The US has announced it will set up “surge” testing sites in several states suffering large increases in coronavirus cases and hospitalisations, as the number of new infections rose past 50,000 a day again and the death toll jumped higher.

The US has begun the process of withdrawing from the World Health Organization, in a contentious move that will strip the global UN body of its largest donor in the throes of the coronavirus pandemic.

Brazil president Jair Bolsonaro has tested positive for coronavirus, days after he celebrated the July 4 weekend with the US ambassador and a host of his top ministers in Brasília.

Philippe Le Houerou is stepping down as head of the International Finance Corporation at a critical time for the World Bank’s private sector lending arm as it tries to support the economies of many emerging markets stricken by the pandemic.

Novavax has signed a deal worth up to $1.6bn with the US government’s Operation Warp Speed vaccine programme, securing more federal funds than any other company behind a potential Covid-19 inoculation.

Dozens of high-profile officials and politicians across Latin America are being swept up in investigations into whether they used their positions to siphon funds intended to tackle the coronavirus pandemic.

The World Health Organization experts will be travelling to China this weekend to prepare scientific plans with their Chinese counterparts for identifying the animal origin of Covid-19.

The top Federal Reserve official in charge of banking regulation has called on authorities around the world to pay closer attention to risks emanating from non-bank financial institutions as he warned that the financial system faced “more challenges” from the fallout of the coronavirus pandemic.

Australia’s Victoria reports 134 new coronavirus cases

Australia’s state of Victoria reported a further 134 coronavirus cases on Wednesday after a spike in infections pushed authorities to lock down metropolitan Melbourne.

The area will be locked down from midnight for six weeks following a jump in coronavirus cases in the city, reversing moves to reopen the economy. Police have been deployed to prevent people from leaving the city, except for necessary trips.

“This is not the situation that anybody wanted to be in, but it is the reality that we must confront,” Daniel Andrews, the state’s premier said. “To do otherwise is to pretend this is not real.”

There are now 75 reported cases in the nine public housing towers where 3,000 residents have been placed under a hard lockdown. Residents are not permitted to leave their flats.

The state conducted 29,424 tests on Tuesday taking the total number of people tested for the virus to over 1m.

Coronavirus corruption cases spread across Latin America

Bryan Harris and Andres Schipani in São Paulo and Gideon Long in Bogotá

Dozens of high-profile officials and politicians across Latin America are being swept up in investigations into whether they used their positions to siphon funds intended to tackle the coronavirus pandemic.

The investigations, which have gathered pace alongside a soaring number of Covid-19 cases in the region, are a stark reminder of the pervasive presence of corruption years after the Car Wash probe sent shockwaves across the continent.

“Corruption is so deep-rooted that without a doubt many countries still carry these corrupt practices through pandemic times,” said Sérgio Lazzarini, an expert on corruption and crony capitalism at Insper business school in São Paulo.

“In the case of Covid-19, seeking to speed up the procurement processes, governments ended up making bids and rules more flexible and this opened space for opportunists.”

In Brazil, where the number of Covid deaths has surpassed 65,000, federal police have launched multiple investigations, ensnaring dozens of state and city-level officials and at least three state governors.

Read more here

Minorities account for 90% of infections at US meat processing plants

Nearly 90 per cent of US meat processing plant workers infected with coronavirus are from racial and ethnic minorities, a new report from the Centers for Disease Control and Prevention has revealed.

The CDC looked at data from 239 affected facilities in 23 states up until the end of May and found more than 16,000 workers had tested positive and 86 had died. Among 9,919 cases in 21 states with reported race or ethnicity, 87 per cent occurred among racial minorities.

The CDC research suggests Hispanic And Asian workers in meat processing plants are particularly vulnerable because they accounted for higher percentages of those infected than their overall proportion of the workforce — the data showed only 30 per cent of workers were Hispanic but they accounted for 56 per cent of those infected. Likewise, Asians accounted for 6 per cent of the workforce, but 12 per cent of those infected.

In contrast, the proportion of white and black workers infected was lower than their proportion in the workforce — 39 per cent of workers were white, but they accounted for only 13 per cent of those infected and 25 per cent were black, but they accounted for 19 per cent of infections.

“The effects of Covid-19 on racial and ethnic minority groups are not yet fully understood; however, current data indicate a disproportionate burden of illness and death among these populations,” the CDC said.

The animal slaughtering and processing industry employs an estimated 525,000 workers in approximately 3,500 facilities nationwide, the CDC said, noting that risk factors for them included prolonged close workplace contact with coworkers, shared work spaces, shared transportation to and from the workplace, congregate housing, and frequent community contact with fellow workers.

The report said that meat processing plants had been introducing measures such as mandatory face coverings, physical barriers between workers and provision of hand sanitiser.

Australia plans to limit arrivals into the country

Australia’s prime minister says his cabinet will consider limiting the number of people who can enter the country as it grapples with a “particularly serious” coronavirus outbreak in Melbourne.

Mr Morrison said his cabinet would on Friday discuss slowing down entry of people into the country after the state of Victoria closed to international arrivals, increasing the burden on other state capitals to provide quarantine for travellers.

The proposal will limit the overall level of returning Australians, lessening the load for all states, he said, adding that governments can charge people for their stay in quarantines. Only Australian citizens, permanent residents and their immediate family members or New Zealand citizens who normally live in Australia are permitted to enter the country.

Western Australia, of which Perth is the capital, has received approval to limit daily arrivals to about 75 people.

Mr Morrison said the outbreak in the state of Victoria was “not surprising” as similar situations had been seen overseas, adding that his government was not considering reimposing restrictions on movement across the country.

“It’s happening in Melbourne now, of course there’s always the risk it could happen in other cities, and every step is being taken to prevent that wherever possible,” he said.

Mr Morrison detailed three rings of containment in Melbourne — from individual suburbs to the metropolitan area of Melbourne and then the state as a whole. The border with New South Wales has been closed to prevent the spread of the virus

Daniel Andrews, Victoria’s premier said on Wednesday that 134 new coronavirus cases had been discovered in Melbourne following more than 29,000 tests on Tuesday.

Mumbai to relax testing restrictions, raising hopes country will follow

Amy Kazmin in New Delhi

India’s financial capital, Mumbai, will allow walk-in coronavirus testing without a doctor’s prescription — setting a precedent for a needed loosening of what has been a highly restrictive coronavirus testing policy.

India, which has the world’s third-highest known coronavirus burdens, with 742,000 confirmed cases, also has one of the world’s lowest rates of testing. Since the pandemic began, tight controls on testing have made it tough for ailing patients to obtain tests, even with doctors’ prescriptions.

India has carried out just 7,398 tests per million of its population, compared to Brazil’s 20,500 per million people, and more than 117,200 per million in the United States.

Initially, India’s highly restrictive testing protocols were designed to preserve scarce test kits and laboratory manpower for suspected cases thought most in need of confirmation.

But even after testing capacity was ramped up in recent weeks, many jurisdictions continued to make it difficult for patients to get tests, amid accusations that they have been motivated by a desire to downplay the severity of the pandemic in their area.

However, in a major reversal of previous policy, Mumbai city officials will now permit local diagnostics laboratories to test any patients on a walk-in basis without a doctor’s prescription, a move hailed by public health experts as critical to helping the city control its caseload.

Experts hope that other cities and states will follow suit, as India’s infection curve shows no sign of flattening. While the number of new cases appears to be moderating in Mumbai and New Delhi, the southern tech hubs, Bangalore and Hyderabad, are reporting surging caseloads.

Bangalore’s health system is currently struggling to accommodate ailing patients, leaving families to struggle to find hospital beds.

China scales back meat imports over virus fears

Sun Yu in Beijing, Emiko Terazono in London and Bryan Harris in São Paulo

Chinese consumers face a fresh increase in meat prices and an uptick in food price inflation after Beijing suspended imports from a swath of overseas processing plants because of concerns that Covid-19 outbreaks in the plants risked importing the virus back into the country.

The country’s customs officials have also stepped up inspections of frozen food imports at ports, leading to backlogs of up to two weeks and a shortage in storage space, delaying the supply of food to Chinese cities.

The moves came after virus outbreaks in slaughterhouses around the world intensified worries in China that imported food could carry the disease.

The World Health Organization and various governments insist there is no evidence of coronavirus transmission via food or food packaging, but Chinese customs officials from several cities said there was a “good chance” that the virus could stay alive in a frozen container.

“We are concerned about the transmission of [the] virus in the production process,” said a customs official at Zhanjiang port in southern China, who added it was “better to overreact than not act” given the seriousness of the disease.

Read more here

UCL study renews concerns about effects of Covid-19 on the brain

Specialists from University College London have made findings that renew concerns about the effects of Covid-19 on the brain.

As well as the well publicised increase risk of stroke and brain inflammation, the scientists describe Covid-19 patients with delirium, agitation and a patient who suffered a psychotic episode, a paper published in the Brain medical journal on Wednesday reveals.

In one case, a 55-year-old woman had been admitted to hospital with Covid-19 symptoms but was discharged three days later when she seemed to have recovered.

The following day, her husband reported that she was confused and behaving oddly. She was disorientated and displaying ritualistic behaviour such as putting her coat on and taking it off repeatedly. She reported visual hallucinations — seeing lions and monkeys in her house. She also reported hearing things and displayed intermittently aggressive behaviour with hospital staff and her family.

In another case a 65-year-old woman started suffering from involuntary movements six days after the onset of Covid-19 symptoms.

In other patients there were reports of left-sided or right-sided weakness and symptoms such as extreme drowsiness.

“Early recognition, investigation and management of Covid-19-related neurological disease is challenging,” the authors said.

“Follow-up studies will be necessary to ascertain the long-term neurological and neuropsychological consequences of this pandemic,” they added.

European stocks on track to open lower

European equities were set to fall for a second day on Wednesday, as concerns over a surge of coronavirus cases in the US ripple through global markets.

Futures trade pointed to declines of about 1 per cent at the open for Europe’s major bourses, following a weak session in Asia. US stock futures were also lower, after the S&P 500 fell 1.1 per cent to end a five-day positive streak overnight.

Raphael Bostic, president of the Federal Reserve Bank of Atlanta, told the Financial Times on Tuesday that the US economic rebound could stall as a result of the outbreaks, which have led to new lockdown measures in some places.

Cat Rutter Pooley’s City Bulletin: FirstGroup, Boohoo, Amigo

FirstGroup reported a £300m loss for the year to March, up from a £98m loss the year before. The public transport operator had been battling higher costs before the start of the pandemic. Then passenger volumes fell 90 per cent by the end of March. FirstGroup said that, although it plans to sell its US business, which should help pay down debt, there was “material uncertainty” as to whether the group could continue as a going concern over the next year because of a lack of clarity over state support schemes and the pace of a recovery in public transport use.

Boohoo has launched an “independent review” of its UK supply chain, to be led by a QC, after fresh scrutiny of working practices at its suppliers in Leicester, which recently became the UK’s first local lockdown city as cases spiked. Investors have dumped shares in the fast fashion retailer in recent days, following a Sunday Times newspaper investigation that alleged workers making garments for Boohoo’s Nasty Gal brand were paid as little as £3.50 an hour at a factory displaying the name Jaswal Fashions. Boohoo said it had found some inaccuracies in the report.

Amigo Holdings, the guarantor loans group that has had a turbulent year of management upheaval and soaring customer complaints, has brought back its old chief executive to steady the ship. Glen Crawford plans to rejoin from August, after stepping down in April last year to undergo medical treatment.

Tokyo cases spread in nightlife areas from host clubs to maid cafes

Robin Harding in Tokyo

A surge in Covid-19 cases in Tokyo nightlife areas has spread from the city’s host clubs to its maid cafes, showing the difficulty of controlling the spread of coronavirus in venues that rely on close proximity between customers and staff.

A total of 12 new infections were found after intensive testing of 394 staff at maid cafes in the Akihabara area, Chiyoda City confirmed on Wednesday. It named two premises of the At-home Cafe as the location of the infections.

Three employees were found to be infected on June 25, leading to a testing campaign on staff at the stores. That revealed a further 9 cases: an overall infection rate of 2.3 per cent.

The city office said it had visited the premises multiple times and confirmed they had adequate measures for infection control, including masks for staff, temperature checks on customers and hourly disinfection.

The local health centre therefore judged that there were no close contacts among customers at the cafes and there was no need for them to cease operating. It said there was an “extremely high” chance that six of the infections were not acquired at the stores themselves.

Maid cafes are a Japanese subculture where waitresses dress in maid costumes and treat the customers in character, as if they were working in a private home.

Numerous previous cases have been found in host clubs in the Shinjuku area, where male staff drink with female customers. According to local media, there were 75 new cases in Tokyo on Wednesday, the lowest level of new infections for a week.

FirstGroup suffers heavy loss on troubled Greyhound unit and Covid-19

FirstGroup fell to a deeper loss and withdrew its dividend for the year to March, as the transport operator was weighed down by its troubled US Greyhound bus business and coronavirus in the final month of the reporting period.

The rail and bus company warned that there was “material uncertainty” as to whether it could continue as a going concern over the next year because of a lack of clarity over state support schemes and the pace of a recovery in public transport use.

The slump to a £300m pre-tax loss in the year to March, down from losses of £98m a year earlier, was deepened by a £21.5m coronavirus writedown with passenger numbers plummeting 90 per cent in March as countries went into lockdowns to stop the spread of the virus. It was also hobbled by a £141.3m provision on North American insurance and £58.2m of restructuring costs.

The group recorded a hefty £186.9m impairment charge on Greyhound, which it has been struggling to sell since May last year after pressure from activist investors.

Shares in the group fell as much as 16 per cent in morning trading on Wednesday.

UK chancellor to set out economic recovery plans

Rishi Sunak will make an economic statement at lunchtime, which is expected to focus on job creation for younger Britons, who are particularly vulnerable to a surge in unemployment created by the pandemic.

Mr Sunak’s £2bn scheme will fund six-month job placements for an estimated 350,000 18- to 24-year-olds, the FT’s George Parker reports here.

The UK chancellor is reported to be eyeing a new housing market stimulus in the form of a tax break that temporarily cuts the stamp duty payable on mid-market properties valued at £300,000 to £500,000. Britain’s stamp duty regime means a purchase of a £500,000 property incurs a tax bill of £15,000, which can deter people from moving or buying their first homes.

As part of a broader strategy to move the government’s economic defence against coronavirus from support to stimulus, he has been considering a cut in value added tax for the depressed hospitality sector.

Protests erupt in Belgrade after Covid-19 curfew

Valerie Hopkins, south east Europe correspondent

Thousands of protesters clashed with police on Tuesday night in Belgrade during riots against the Serbian government, which announced a weekend-long curfew in the capital city due to a spike in Covid-19 cases.

The lockdown was announced after Serbia reported its highest death toll in a single day since the start of the pandemic, with 13 deaths and 299 newly-identified Covid-19 cases.

Several hundred people stormed the Serbian parliament before being forced back by riot police, who fired tear gas as protesters pelted them with stones and set their vehicles ablaze.

The Serbian Progressive Party led by Aleksander Vucic won an overwhelming victory in parliamentary elections two weeks ago.

The vote took place after some of Europe’s strictest restrictions were completely lifted and public life returned to normal during the campaign period.

In a news conference announcing the restrictive measures on Tuesday, Mr Vucic said that the situation in the city was “alarming.”

But protesters believe that an increasingly autocratic Mr Vucic relaxed lockdown measures to solidify his grip on power, before curtailing freedom of movement again.

Auditor casts ‘significant doubt’ on Air Asia’s future

Stefania Palma in Singapore

Shares in AirAsia fell 15 per cent on Wednesday after the Malaysian budget airline’s auditor said coronavirus had cast “significant doubt” on the company’s ability to continue as a going concern. 

EY said in a stock exchange statement:

The travel and border restrictions implemented by countries around the world has led to a significant fall in demand for air travel which impacted the group’s financial performance and cash flows.

EY also highlighted that in the 2019 financial year AirAsia’s liabilities exceeded current assets by RM1.84bn ($430m) while the carrier, which is majority-owned by tycoon Tony Fernandes, registered a net loss of RM283m. 

Mr Fernandes, an English-educated Malaysian of Indian descent, bought AirAsia from the Malaysian government in 2001 for less than a dollar and built it into one of south-east Asia’s biggest airlines.

Both airlines and tourism have been hit hard by the pandemic, with companies in both sectors around the globe struggling after countries shut borders and implemented strict distancing measures to try to contain the spread of the virus. 

US retail rebound falters as virus infections surge

Alistair Gray

US retailers’ rebound from the coronavirus shutdown is starting to flatline as infection rates jump in swaths of the country, according to executives and industry data, intensifying concerns that consumer spending will remain weak for a protracted period and leave discretionary store chains unable to cope.

After an initial jump in footfall as lockdowns were lifted, the latest figures show that more shoppers are shying away from reopened malls, especially in states such as Texas that had helped drive the initial recovery.

While few in retail expected a smooth recovery, the infection surge is worrying executives who have had unexpected success in attracting Americans back to stores.

Read more on that story here.

One million Irish download Covid-19 contact tracing app

Arthur Beesley in Dublin

Ireland revealed almost 1m people have signed up for its Covid-19 tracking app within one day of its introduction, boosting efforts to identify people who have been in close contact with those infected with the disease.

Dublin believes the successful launch of the app, in a country of 4.9m people, will help trace those infected within hours instead of days once coronavirus is diagnosed. Although many sectors of the economy have reopened as lockdown restrictions are eased, the government is concerned about another outbreak of the virus.

The app was introduced on Tuesday and there were 865,000 downloads by 8am on Wednesday, said Stephen Donnelly, the health minister.

Paul Reid, chief of the health service executive, described the launch as “by far the most successful” anywhere in the world. “Well done Ireland. Please keep it going and protect everyone by downloading it now,” he said in a tweet on Wednesday.

Ireland has reported low levels of the disease. One further coronavirus death was reported on Tuesday, taking the total to 1,742. But there were 24 new infections, bringing the overall number to 25,538.

Stocks slide as US coronavirus outbreaks threaten recovery

Global stocks retreated on Wednesday while gold tested a nine-year high as a surge in US coronavirus cases threatened to undermine a recovery in the world’s biggest economy.

In Europe, equities trimmed some earlier losses on Wednesday but were still on course for a second day of declines. The region-wide Stoxx 600 fell 0.4 per cent while London’s FTSE 100 flip-flopped between losses and gains. It was recently down 0.2 per cent in late morning trading on Wednesday. The UK chancellor Rishi Sunak is scheduled to stand up at 12:30pm to deliver stimulus measures to support the pandemic-struck economy.

The price of gold, often perceived as a haven asset in times of market turmoil, remained above $1,800 a troy ounce, its highest level since September 2011. Still, it was 0.1 per cent weaker on Wednesday. The yield on the 10-year US Treasury, another relatively safe asset, was little changed, adding 0.002 percentage points to 0.651 per cent. Yields rise when bond prices fall.

“Gold is a more attractive defence position, especially with government yields being as low as they are,” said Nick Peters, multi-asset portfolio manager in charge of $4bn at Fidelity.

US stock futures turned positive, tipping the S&P 500 to open 0.3 per cent higher. The index ended a five-day positive streak on Tuesday to close 1.1 per cent lower at 3,145.32 as investors sought the safety of US Treasuries, UK gilts and gold.

The S&P 500 seems “fragile”, said Steen Jakobsen, chief economist at Saxo Bank, adding: “We are leaning towards [retracing] to 3,100 . . . as the market will begin pricing in the Covid-19 developments across the Sun Belt states with increasing intensive care unit capacity being maxed out.

“Nervousness is building over the deteriorating Covid-19 situation in the US with forecasting now suggesting a significant increase in deaths over the coming months,” he said.

UK assets steady as chancellor prepares to unveil support package

UK assets were stable ahead of a summer statement due around 12.30pm in London, as chancellor Rishi Sunak prepares to outline the next phase of his response to the pandemic.

The chancellor is expected to unveil targeted measures to shore up the jobs market and boost confidence in Britain’s economy as it emerges from the coronavirus crisis. No more economic forecasts will be announced.

Mr Sunak faces four main challenges: rising unemployment, the threat of local lockdowns, consumer confidence and the housing market, ING economist James Smith said.

Analysts at investment bank Jefferies said:

There is likely to be further fiscal stimulus from the Chancellor, Rishi Sunak, who appears unafraid of the UK public borrowing level running at around 15 per cent of GDP.

The pound was down less than 0.1 per cent at $1.2520 an hour before the speech, while UK government bonds were steady. London’s benchmark FTSE 100 slipped 0.3 per cent, in line with other European markets.

UK workers escape coronavirus test tax trap

Emma Agyemang in London

UK workers will not face an increased tax bill as a result of their employer paying for a coronavirus test, the chancellor has confirmed, in a swift U-turn on rules announced a day earlier.

On Tuesday, HM Revenue & Customs published guidance which said coronavirus tests paid for by employers would be treated as a benefit in kind – meaning staff would have to pay income tax and National Insurance Contributions on them.

Following the announcement Mel Stride, chair of the Treasury Select Committee, wrote to the chancellor urging him to investigate the matter and warning key workers would have a “perverse incentive of avoiding employer-sponsored tests in order to reduce their tax bill”.

On Tuesday night the chancellor wrote to Mr Stride saying the Government had reversed the decision and employer-provide Covid-19 tests would be exempt from the taxes.

Mr Stride said: “I’m glad that common sense has prevailed.”

Sunak pledges to support jobs as ‘hardship lies ahead’

Philip Georgiadis in London

Chancellor Rishi Sunak has begun his economic statement, where he is expected to set out measures to help the UK economy recover from the coronavirus pandemic.

Mr Sunak said he was presenting “a plan for jobs” and that government interventions have already “significantly protected peoples’ incomes”.

“Although hardship lies ahead, no-one will be left behind,” he said.

People need to know we will do all we can to give everyone the opportunity of good and secure work.

He said the government is entering the second phase of its response, as the country faces “profound economic challenges”.

British pound strengthens as Sunak sets out support measures

Eva Szalay in London

Sterling jumped higher against the dollar and the euro after UK chancellor Rishi Sunak outlined measures to support the economy suffering from the debilitating effects of the coronavirus pandemic.

The pound traded at $1.2559, up from $1.2540 before the start of the speech. The euro, meanwhile, weakened to 89.85p from 89.94p.

‘Job has just begun’, says Sunak, outlining depth of recession faced

Philip Georgiadis in London

Chancellor Rishi Sunak has outlined the depth of the recession the UK faces, including a 25 per cent contraction of the UK economy in just two months.

“The job has only just begun,” he said as he delivered his summer statement in the House of Commons. He added that unemployment is the most immediate challenge the Treasury faces. He is not updating any economic forecasts this afternoon.

I will never accept unemployment as an unavoidable outcome.

He said he will put the government’s finances “back on a sustainable footing” over the medium term.

The UK government enjoys low borrowing costs. UK gilts were stable as Mr Sunak began speaking.

The chancellor also confirmed that the UK’s furlough scheme to support workers’ wages will end in October and announced that employers will get £1,000 for each staff member they bring back from furlough.

Emoticon UK government to pay companies to bring workers back

Jim Pickard in London

Chancellor Rishi Sunak has announced a new “job retention bonus” of £1,000 per worker to be paid to companies that bring back staff out of the government’s furlough scheme.

Mr Sunak told the House of Commons that the scheme could cost up to £9bn if all of the 9m people currently furloughed through the state’s “job retention scheme” were re-employed before January.

The chancellor is also announcing a £2bn job creation scheme to stop the UK’s young people becoming part of a blighted “Covid generation”, in an economic statement intended to stave off an unemployment disaster.

Mr Sunak said the Treasury would create a pool of “free labour” for companies, paying the minimum wage to up to 300,000 people aged 16-24 for six months from August.

Furthermore the chancellor promised to pay companies £2,000 for every young apprentice they take on over the next six months while also tripling the number of places on sector-based work academies.

The moves are part of a series of targeted measures to shore up the jobs market and boost confidence in Britain’s economy as it emerges from the coronavirus crisis.

UK to cut property stamp duty to boost housing market

The stamp duty threshold for homebuyers will be raised from £125,000 to £500,000 until March 31, with effect immediately, chancellor Rishi Sunak said in his summer statement, in a move estate agents were praying for.

The duty cut will be effective immediately.

This means someone buying a £500,000 home, which is about the level of a starter home for many first-time buyers in London, will save £15,000 on their tax bill.

Our property reporter George Hammond has also spotted that the chancellor has pledged to offer £2bn worth of green homes grants from September. The scheme will see up to £10,000 allocated to homeowners who want to make their homes more energy efficient.

English housing and stamp duty — as it was

Back in March, deputy Money editor James Pickford analysed the effect of stamp duty on English homebuyers over time.

Between 2015 and 2019, 2.7m more properties were dragged into a higher 5 per cent stamp duty price band, as house prices rose but the thresholds for paying the tax remained unchanged. Most of those homes were located in the south of England. 

According to research from property website Zoopla, which looked at homes in England, the number of properties that fell into the 5 per cent band for the purchase transaction tax has risen from 6.9m in 2015 to 9.6m in 2019 under the so-called “fiscal drag” effect.

James’ chart shows that the proportion of homes in the south of England (including the south-east, east of England and the south-west) falling into the 5 per cent bracket rose from 48 per cent to 64 per cent over the four-year period. In London, 82 per cent of homes are in the tax band, up from 76 per cent in 2015. 

Read more from James on the distribution of the unpopular tax here.

UK to cut VAT to 5% for hospitality sector goods and services

Alice Hancock, Philip Georgiadis and Naomi Rovnick in London

The UK will reduce value added tax to 5 per cent for six months for goods and services supplied by the tourism and hospitality sectors, the UK chancellor said as he moved to help two of the industries most affected by the pandemic.

But the cut made by the teetotal Rishi Sunak does not apply to alcoholic drinks, which is likely to provoke outrage from a pub sector that has also pushed unsuccessfully for a change to upward-only rent reviews because of the pandemic.

The temporary move, which will take effect from July 15 until January, will bring VAT for hotels, restaurants, theme parks, cinemas and other attractions down from the 20 per cent flat rate that will still apply to most other goods and services purchased in the UK.

Mr Sunak hopes with this temporary cut to lure people back into restaurants, pledging a 50 per cent reduction worth up to £10 per head, on sit-down meals and non-alcoholic drinks between Monday and Wednesday in August.

Smaller businesses that have turnover of less than £85,000 — the threshold at which businesses are required to pay VAT — did not receive any additional support.

Former Treasury adviser welcomes ‘huge’ response

Rupert Harrison, an economic adviser to the Conservative-led government between 2010 and 2015, said the Treasury response to the crisis has been “huge, fast-moving and innovative”.

Chancellor Rishi Sunak has delivered “over and above” expectations, said Mr Harrison, who is now a portfolio manager at Blackrock.

“But the scale of the problem is huge and as he flagged he may well need to come back and do more in the autumn,” he added.

Torsten Bell, chief executive of the Resolution Foundation think-tank, said the chancellor is gambling that a macro-economic response can wait until the autumn.

Scotland rejects Johnson’s quarantine exemption for Spain

Mure Dickie in Edinburgh

The Scottish government will require travellers from Spain and some other countries to quarantine for two weeks, saying low levels of coronavirus infections make it too risky to match the UK government’s exemptions for people arriving in England.

The decision from Nicola Sturgeon, first minister, came despite heavy pressure from the travel and aviation sectors to follow the announcement by Boris Johnson’s government that people arriving in England from dozens of countries would from Friday no longer be required to self-isolate for 14 days.

The Scottish quarantine rules require travellers to self-isolate when they arrive in the country even if they travel via airports in England or elsewhere in the UK. Critics say it is not clear how they can be enforced, with the Scottish government only this week starting to carry out even telephone checks to gauge compliance.

Ms Sturgeon said her government’s estimate was that 28 people out of 100,000 in Scotland had Covid-19, far lower than the about 180 out of 100,000 across the UK as a whole. This meant that countries on the UK government’s exemptions list such as Spain had levels of infections considerably higher than Scotland and would pose a risk of importing the virus.

The first minister insisted that she was “acutely aware” of the importance of international travel for the tourism and aviation sectors, but that the government had to prioritise controlling coronavirus. “We cannot say [that we] have virtually eliminated Covid in the community, but that prize is clearly attainable,” said Ms Sturgeon.

Aviation and retail among industries left out of government help

Rishi Sunak’s summer statement has provided strong support for tourism businesses, furloughed workers and the residential property sector.

But some other struggling industries were left wanting help, despite intense lobbying since the pandemic began to hit the UK economy in March.

Aviation and retail have not received any additional support, while pubs were disappointed by a hospitality sector VAT cut that did not apply to alcoholic drinks.

Marvin Rust, head of tax at restructuring experts Alvarez & Marsal, said:

Businesses have been paralysed by the pandemic, yet the government has not gone far enough in its efforts to breathe new life into the sectors worst hit.

A VAT cut that only applies to the hospitality and tourism sectors ignores industries like retail and aviation that are crying out for additional help.

A cut to VAT and a national insurance holiday would have been a lifeline for these companies, but now they are forced to go without.

Despite the government’s focus on jobs, without additional measures of support, many sectors will struggle to retain existing staff, let alone bring back all employees from furlough and recruit new colleagues — even with the state bonuses.

US retailer Brooks Brothers to file for bankruptcy

Alistair Gray

Brooks Brothers, the two-centuries-old menswear brand, is to file for bankruptcy protection in the US, becoming the latest retailer to be pushed over the edge by the coronavirus pandemic.

The New York-based company, known for its upmarket attire that was once sported by Abraham Lincoln and John Kennedy, said it would file for chapter 11 protection in Delaware on Wednesday. Brooks Brothers said it had secured $75m in financing to tide it through the bankruptcy as it intends to look for a buyer and avoid liquidation.

Brooks Brothers, which has about 500 stores globally and employs 4,000 people, had already been conducting a strategic review over the past year as it sought to modernise its brand. A collapse in sales during the pandemic took a heavy toll and it has already closed about 50 stores.

Northumberland welcomes VAT cut for hospitality sector

Chris Tighe, northeast correspondent

Northumberland’s local government has said the cut in value added tax for hospitality businesses is the measure in Rishi Sunak’s summer statement that will have the most immediate importance for the county in the north of England.

“Tourism and hospitality are very important to the Northumberland economy,” said Peter Jackson, Conservative leader of the county council.

They absolutely have been suffering — they’ve had no trade at all.

The initiatives he has announced today are quite dramatic, more than most people here had expected.

The county’s tourism and hospitality sector, focused on beautiful beaches, rich history, wild landscape and locally sourced food, makes a £1bn annual contribution to its economy.

The sector normally employs more than 16,000 people, many of them in places with little other employment, and accounts for 19 per cent of the county’s gross value added.

Mr Jackson welcomed the incentive for employers to sustain the employment of people moving off furlough.

It’s been a real worry that as soon as people come off furlough they find they don’t have a job.

Today’s statement, he said, was an “immediate reaction to try to keep people in work”.

Lack of measures to ‘level up’ economy disappoints regional think-tanks

Andy Bounds, north of England correspondent

Think-tanks in the north of England rued the lack of specific measures to “level up” the UK economy, aside from a previously unveiled plan to spend £5.8bn on infrastructure.

Job support though was welcome in regions that are forecast to be hit hardest by the pandemic.

IPPR North senior research fellow Anna Round said:

Our regional divides are among the worst in the developed world.

Only large-scale and long-term investment in people and places can secure the recovery the country needs.

Henri Murison, partnership director of the Northern Powerhouse Partnership, a business-led group, said they would push for further measures in the autumn spending review:

There is still a need for a patient capital fund for Northern businesses to grow, and more local investment capabilities for our metro mayors to draw on.

Frank McKenna, chief executive of Downtown in Business, a north of England networking group, said the summer statement was a stop gap that failed to tackle the structural damage done to the economy:

I question whether these initiatives will create long-term sustainable jobs. They will probably help the economy in the short-term, which is important, but I am not sure they will fix the economy in the medium to long-term.

Wall Street resumes winning streak after 1-day break

US shares have had an early spurt at the opening bell on Wall Street, with the S&P 500 rising 0.5 per cent to resume a five-day winning streak that it broke in the previous trading session. Investors meanwhile dug into the perceived safety of gold.

In Europe, equities retreated: the region-wide Stoxx 600 and London’s FTSE 100 fell 0.6 per cent in afternoon trading.

Recent data reflecting economies reopening is “what has really pushed markets higher” over the past few trading sessions, said Nick Peters, multi-asset portfolio manager in charge of $4bn at Fidelity. “Emphasis could well turn more towards Covid infections, policy stimulations and valuations.”

The price of gold, often considered a haven asset in times of market turmoil, stayed above $1,800 a troy ounce, testing its highest level since September 2011. It was 0.6 per cent stronger on Wednesday. The yield on the 10-year US Treasury, another haven asset, added 0.02 percentage points to 0.664 per cent. Yields rise when bond prices fall.

“Gold is a more attractive defence position, especially with government yields being as low as they are,” said Mr Peters.

Harvard, MIT sue to stop new US policy on foreign students

Aime Williams in Washington

Harvard and the Massachusetts Institute of Technology have sued to block Donald Trump’s attempts to eject international students from US universities if their courses move fully online due to coronavirus. 

In a case filed in US federal court in Boston, the two prominent US universities jointly requested a temporary restraining order and permanent injunction to stop the policy announced Monday, which said foreign students whose courses have moved fully online should either leave the country or transfer to a course with in-person teaching to maintain their lawful status. 

“The order came down without notice — its cruelty surpassed only by its recklessness,” said Harvard president Larry Bacow. “It appears that it was designed purposefully to place pressure on colleges and universities to open their on-campus classrooms for in-person instruction this fall, without regard to concerns for the health and safety of students, instructors, and others.”

In their court filing, the universities argued that the change would leave “hundreds of thousands of international students with no educational options within the United States”, as most would be unable to transfer to another school on such short notice.

/Read more of this story here./

Opinion: Sunak skilfully serves up a boost for consumption

Robert Shrimsley in London

Have a dish on Rish. The chancellor’s summer stimulus has something for everyone prepared to consume for their country. His promise of £10 a head discount on eating out is an imaginative gimmick that will make headlines and help reignite the chilled ovens of the hospitality industry.

Yet again Rishi Sunak has shown the combination of gravitas and soft political skills that make him such a potent operator in an administration not overly graced with substantial figures. His speech was pitch perfect, demonstrating both that he understands the unique nature of the moment yet is still unafraid to deliver less welcome political messages.

On Wednesday, Mr Sunak presented a substantial and imaginative economic statement focused almost entirely on saving the UK from mass unemployment. It comes with a hefty £30bn price tag, on top of more than £150bn of existing fiscal measures. The scale of government support has been breathtaking and yet, this is still something of a holding position.

Read the full column from the FT’s chief UK political commentator here.

US crude oil inventories hit record high

Myles McCormick in London

US crude oil stocks rose to a new record high last week as imports soared, driven by shipments from Saudi Arabia.

Overall crude inventories rose by 6.3m barrels to 1.2bn barrels in the week to July 3, according to data released by the federal Energy Information Administration. Analysts had pencilled in a drawdown.

West Texas Intermediate, the US oil benchmark slipped 1 per cent to $40.40 a barrel on the news, before rebounding.

The continued build in US crude stocks comes as a handful of states reimposed restrictions in a bid to stem a rapidly increasing rate of Covid-19 infections.The EIA data follows retail data showing footfall has begun to flatline as shoppers steer clear of reopened malls.

Demand for fuel continued to climb however, suggesting the impact of new lockdown measures have yet to be fully felt by motorists. Gasoline consumption was up 3 per cent, though it remains down 10 per cent compared to last year.

Net crude imports were also up almost three quarters compared to the previous week, with the bulk of the increase coming from Saudi Arabia, whose exports to the US leapt 600,000 b/d to 1.4m b/d despite its pledge to curb supply to help prop up oil prices.

Sterling grinds higher after Sunak reveals new stimulus measures

The British pound cranked higher against the dollar in the hours following the chancellor’s announcement of fresh stimulus measures to support jobs as the country begins recovering from the coronavirus pandemic.

Sterling gained 0.3 per cent against the US currency to trade at $1.2572, up from $1.2540. The euro, meanwhile, reversed losses to strengthen against the UK currency to almost 90p from 89.84p when the speech began.

Foreign exchange analysts doubted that the stimulus was big enough to trigger larger gains for the pound, especially given that traders had the opportunity to react ahead of the announcement as details of the package came out before the statement.

“The chancellor’s announcements are innovative but unlikely to completely change the game for either the UK economic outlook or the pound,” said James Smith at ING.

“The ongoing uncertainty surrounding UK-EU trade negotiations will dominate the story for sterling, and could push EUR/GBP to 0.92 over coming months.”

Florida hospitalisations slow as state reports nearly 10,000 new cases

Hospitalisations in Florida rose by the smallest margin since at least mid-May while the state registered nearly 10,000 new cases, as US vice-president Mike Pence said hotspots for coronavirus are seeing signs that efforts to slow its spread are working.

The number of positive tests in Florida climbed by 9,989 on Wednesday, according to a Financial Times analysis of Covid Tracking Project data. That remained below a one-day peak of 11,458 last week and was up from 7,347 new cases yesterday. However, the rate of tests coming back positive fell to 18.8 per cent, compared with an average of 19 per cent over the prior seven days and 20.8 per cent on Tuesday.

Florida’s health department also said the cumulative total of hospitalisations since the pandemic began rose by 25 to 16,758, much lower than a daily increase of 381 a day earlier.

Florida does not provide daily updates on the number of people currently hospitalised. State officials said on Tuesday there were more than 5,000 people in ICU beds, about 83 per cent of capacity.

There were 48 additional deaths attributed to coronavirus since Tuesday, bringing the state’s total to 3,991.

During a briefing in Washington, Mr Pence said the US is starting to see the first indications that mitigation efforts are working in areas where cases have climbed. He added that positivity rates for tests in Arizona, Florida and Texas are beginning to flatten.

Deborah Birx, a member of the White House task force, said recent data show that Florida may be reaching stability in the number of daily reported infections.

Florida, California, Texas and other states across the US sunbelt have recorded an increase in Covid-19 cases in recent weeks. Some states, including Florida and California, have pulled back on reopening plans in the hope of slowing the spread of the virus.

United Airlines plans to furlough up to 36,000 workers

Claire Bushey in Chicago

United Airlines plans to involuntarily furlough up to 36,000 workers as it contends with a pandemic that has crippled demand for air travel.

The Chicago-based company said on Wednesday it will send furlough warning notices to 15,100 flight attendants; 11,000 in airport operations; and 2,250 pilots. Other affected employees include catering, technical operations and contact centres.

Not everyone who receives a notice will be furloughed, the company said. The company and unions representing pilots and flight attendants are attempting to increase participation in voluntary leave and early retirement programmes.

“Our primary goal throughout this crisis has been to ensure United — and the jobs it supports — are here when customers are flying again,” the company said.

The Association of Flight Attendants-CWA, which represents United’s flight attendants — said the airline’s “projected furlough numbers are a gut punch, but they are also the most honest assessment we’ve seen on the state of the industry”.

US surpasses 3m coronavirus cases

The US has notched more than 3m cases of coronavirus since the pandemic began, according to a widely followed tracker of the disease.

There have been 3,009,611 confirmed cases of Covid-19 in the US, John Hopkins University data revealed on Wednesday morning, or just over one-quarter of the 11.9m cases worldwide.

Data from Covid Tracking Project, which the Financial Times used for analysis, put the tally at just over 2.98m as of Tuesday evening and is expected to also cross the milestone later today given an average of about 51,000 new cases each day have been added over the past week. The difference between the two sources may be primarily due to Johns Hopkins University’s decision to include probable cases in its tally.

Florida this morning reported nearly 10,000 new cases, while Arizona had a further 3,520. Both states, along with California and Texas, have emerged as the new hot spots for the virus in the US.

There have been 131,594 fatalities from coronavirus in the US since the pandemic began, according to Johns Hopkins University, out of 545,398 worldwide. Covid Tracking Project, which does not count so-called probable deaths, yesterday put its total at 123,834.

CDC to issue new guidelines for US schools to reopen

Courtney Weaver in Washington

US vice-president Mike Pence said the Centers for Disease Control would issue new guidelines for schools during the pandemic, after Donald Trump criticised the CDC in a pair of tweets on Wednesday.

At a press conference with the US coronavirus task force, Mr Pence said the CDC would now issue new guidelines next week about how schools should reopen, acknowledging that schools could not simultaneously follow the current CDC guidelines of social distancing while simultaneously reopening their doors in the fall to all students – a priority of Mr Trump’s.

“The president’s made it clear and I think most parents in America would agree with him: that we’ve got to get our kids back to school, and we’ve got to get them back into the classroom. And we can do it in a safe and responsible way,” Mr Pence said.

He added: “The president said today we just don’t want the guidance to be too tough. That’s the reason why next week, CDC is going to be issuing a new set of tools – five different documents – that will be giving even more clarity on the guidance going forward.”

Earlier on Wednesday, Mr Trump tweeted criticism of the CDC’s guidelines for school reopenings and how to keep students and adults who work at schools safe. Those guidelines include rigorously cleaning and sanitising school facilities; encouraging students to wear face masks; and encouraging schools to socially distance students by keeping them 6ft apart.

“I disagree with @CDCgov on their very tough & expensive guidelines for opening schools. While they want them open, they are asking schools to do very impractical things. I will be meeting with them!!!” Mr Trump tweeted.

The president claimed that Democrats were trying to keep schools closed, because they thought it would hurt his chances at re-election in November. He threatened to cut federal aid from schools that refused to comply and reopen.

“In Germany, Denmark, Norway, Sweden and many other countries, SCHOOLS ARE OPEN WITH NO PROBLEMS. The Dems think it would be bad for them politically if U.S. schools open before the November Election, but is important for the children & families. May cut off funding if not open!” he wrote.

US Treasury sells debt with record low yield

Colby Smith in New York

The Treasury department has seen back-to-back debt auctions with record low yields, underscoring the appetite among investors for safe havens as the coronavirus outbreak intensifies.

On Wednesday, the Treasury was able to offload $29bn of government debt set to mature in 10 years at a record low yield of 0.65 per cent. It followed a $46bn auction of three-year notes on Tuesday, the largest ever at this maturity, that drew strong demand at a record low yield of 0.19 per cent.

Over the past few months, the Treasury has ramped up its debt issuance in order to fund historic spending packages to limit the economic damage from the global pandemic. It announced in May plans to boost its borrowing via longer term issuance, having revived a 20-year bond that month.

Despite the surge in supply, yields have remained close to their all-time lows, given the Fed’s pledge to buy an unlimited quantity of government debt. The yield on the benchmark 10-year note now sits close to its record low, at 0.65 per cent, while two-year yields have steadied at 0.15 per cent.

Greece reports more than 100 “imported” cases since tourism restart

Kerin Hope in Athens

More than 100 tourists have tested positive for coronavirus and entered quarantine since Greece reopened to international visitors on July 1, health authorities confirmed on Wednesday.

Cases of Covid-19 were reported on the islands of Crete, Corfu, Thasos, Naxos and Karpathos among tourists who were randomly tested on arrival at Athens or at a regional airport before heading to their holiday destination.

The number of “imported” cases from abroad now exceeds those reported in local virus hotspots in northern Greece, according to the public health organisation EODY.

Out of 33 new confirmed cases reported on Wednesday, 21 were recorded among tourists arriving at Athens and regional airports. Another three visitors were confirmed with Covid-19 after checking into a private clinic for tests.

Greece banned entry to Serbian passport-holders on Monday after 20 tourists tested positive for coronavirus at the northern land border with Bulgaria, the only Greek crossing-point with its Balkan neighbours that has remained open.

They were quarantined in isolation units at hotels in the Halkidiki region, a popular destination with tourists from central Europe and the Balkans.

Another two Serbian tourists from a group of 80 staying on the island of Evia tested positive on Tuesday. After leaving the island, which lacks a designated “quarantine” hotel, they were hospitalised in the central Greek city of Lamia, local officials said.

EODY said on Wednesday that it would test every tourist arriving by car. For the past week, the organisation has carried out random tests at the Greek-Bulgarian border.

California reports record daily increase in Covid-19 cases

Peter Wells and Matthew Rocco in New York

California reported nearly 11,700 new cases of coronavirus over the past day, a record single-day increase for any US state during the pandemic.

A further 11,694 people in California tested positive for Covid-19 over the past 24 hours, up from 6,090 on Tuesday, governor Gavin Newsom said at a press conference on Wednesday afternoon.

Mr Newsom said the rise was bolstered by a backlog of reported numbers in Los Angeles county, which is the hardest-hit region in the US, echoing problems that states such as New York and North Carolina are experiencing where shortages of the chemicals used to process tests are leading to delays in receiving results.

California’s one-day increase surpasses the previous record of 11,571 that New York reported on April 15 when the state, the early hot spot for the pandemic in the US, was in the depths of its crisis.

The jump in cases lifts California’s average daily case rate over the past seven days to 8,116, with the latest number and an 11,529 increase on July 6, countering relatively lower increases around the July 4 long weekend.

The state is now averaging more than 100,000 tests a day, but its per cent positive rate has averaged 7.1 per cent over the past seven days, compared to 5.1 per cent a fortnight ago.

Other states in the west and south posted record one-day figures. Tennessee’s health department said there were 2,472 new cases in the state since Tuesday, surpassing its previous daily peak at the end of June. The rise in infections came as Tennessee completed its second-highest number of tests for a single day.

Utah counties reported 722 new cases on Wednesday, a daily record for the state, according to state data and historical figures from the Covid Tracking Project.

The data come as the number of confirmed coronavirus cases in the US since the pandemic began topped 3m, according to Johns Hopkins University.

Nasdaq hits record high as tech stocks gain

US stocks bounced back as shares in technology groups powered the Nasdaq Composite to a new closing high.

The tech-heavy Nasdaq jumped 1.4 per cent to its fourth record close in the past five sessions.

The S&P 500 gained 0.8 per cent on Wednesday, a day after snapping its longest winning streak of 2020. The tech sector rallied 1.6 per cent, the best performance out of 11 S&P 500 sectors. Consumer discretionary and financial shares also posted strong gains. The Dow Jones Industrial Average was up 0.7 per cent.

The yield on the 10-year Treasury note rose 0.01 percentage points to 0.659, as investors moved out of the debt. The dollar index fell 0.5 per cent.

Bed Bath & Beyond to close 200 stores as pandemic weighs on sales

Alistair Gray

Bed Bath & Beyond is to permanently close 200 stores as the homewares chain grapples with a collapse in sales during the pandemic, in a new blow to the US commercial property market.

The plans are among the most aggressive yet in the sector as discretionary retailers reduce their bricks and mortar footprint. Stores that Bed Bath & Beyond identified for closure equate to about a fifth of the group’s 1,000 namesake outlets.

The scale of the closures will concern commercial landlords, given that some of the company’s outlets occupy particularly large sites in malls and outdoor shopping centres, typically in the suburbs of medium and large US cities.

Executives said the plan to shut the outlets over two years would generate future annual savings of between $250m and $350m, excluding one-time costs.

Shares dropped 13 per cent in after-hours trading after Bed Bath & Beyond reported a quarterly net loss of $302m. A jump in ecommerce orders failed to offset a slump in bricks-and-mortar sales, and net revenues in the three months ended May 30 dropped by half from a year ago to $1.3bn.

The company has already scrapped its dividend, furloughed workers and drawn down on its revolving credit facility to shore up its finances.

Argentina’s biggest creditors reject government’s debt restructure offer

Benedict Mander in Buenos Aires

Argentina’s biggest creditors rejected the government’s latest offer to restructure $65bn of foreign debt on Wednesday, raising fears of protracted negotiations that could hinder attempts to revive the country’s struggling economy.

Although government officials have insisted that the proposal announced on Sunday was their final offer, Argentina’s two largest creditor groups that together hold almost a third of the nation’s sovereign debt eligible for restructuring said it still “fell short”, even if was “a step in the right direction”.

“We, as Argentina’s largest creditors, remain ready to approach final discussions with responsibility and good faith, and urge Argentina to join us in that effort without delay,” said the statement, which criticised the government for not consulting them in the most recent round of negotiations – which they argue is essential to achieving a successful debt restructuring.

The creditors said they were prepared to engage in discussions on modifications to the proposal in order to reach a consensual restructuring, which they considered to be still possible. “Breaking the impasse between Argentina and its creditors is a far better alternative than yet another cycle of rejection and examination of more drastic alternatives on both sides,” added the statement.

A successful deal would enable Argentina to return to the international capital markets, which the country has been unable to access since a currency crisis in 2018 that prompted the IMF to come to its rescue with a record-breaking $57bn bailout programme.

The government’s latest offer, Argentina’s fourth since the talks began earlier this year, would raise interest payments and cut losses on bondholders’ initial investments, as well as shorten the maturities on the new bonds.

The improved terms suggest a recovery value of roughly 53 cents on the dollar, according to analysts, an increase from the approximately 40 cents on the dollar recovery value of an earlier proposal.

The creditor’s statement added: “As long-term investors that wish to continue to invest in Argentina for years to come, we remain united in our desire to reach a solution that not only provides the government with the immediate support that it needs, but also the economic and legal framework necessary to encourage future investment in the country.”

US reports daily increase of more than 60,000 Covid-19 cases for first time

The US reported a daily increase of more than 60,000 coronavirus cases for the first time on Wednesday, vaulting the number of confirmed cases nationwide over 3m.

A further 62,197 people in the US tested positive for coronavirus over the past 24 hours, according to data from Covid Tracking Project, up from 51,888 on Tuesday and about 4,600 more than the previous high mark on July 3. There have been 3,042,503 confirmed cases in the US since the pandemic began.

The number of deaths increased by about 900 for the second day in a row, in the wake of Donald Trump hailing the country’s low mortality rate, which hit a more-than-three-month low of 209 on Sunday.

Wednesday’s increase in cases was underpinned by California, with a record jump of 11,694 that ranks as the biggest one-day rise for any US state, surpassing New York’s worst day of 11,571 on April 15. Governor Gavin Newsom said the number was elevated due to a backlog of test results from the hard-hit Los Angeles county.

Texas (9,979), Florida (9,989), Arizona (3,520) and Georgia (3,420) had the next biggest increases, but were just below recent peaks. Tennessee had a record 2,472 new cases.

Other states to report record increases in cases were Utah (772), Idaho (487) and West Virginia (246).

New Jersey (142, and a result of the state adding probable deaths from earlier) and California (114) registered the biggest increases in deaths, while Texas (98) reported a record increase in fatalities.