Closed Coronavirus: US reports more than 60,000 new cases for fifth day in a week — as it happened


Today’s top stories: Investors increasingly speculate BoE may set negative rates, US states reverse reopening efforts, UK GDP inches up after historic fall.

US hospitalisation numbers continue to mount, defying weekend lag

Peter Wells in New York and Emma Boyde in Hong Kong

The number of people being hospitalised in the US due to Covid-19 continued to rise, defying the usual lag in reporting weekend numbers on a Monday, suggesting a worrying burden on healthcare facilities in some of the worst-hit states.

“As expected, most numbers were lower over the last 2 days. Current hospitalizations, however, do not display the same weekend effect. There are almost 54k COVID-19 patients in hospitals across the US. The 7-day average for daily deaths increased modestly,” Covid Tracking Project said on Twitter.

The US reported fewer than 60,000 new coronavirus cases for the first time in four days on Monday, while the increase in deaths was the smallest in a week.

A further 58,357 people tested positive for the disease over the past 24 hours, according to Covid Tracking Project data, down from 60,978 on Sunday and nearly 8,300 short of a record 66,645 on July 10.

Figures on Monday tend to be lower due to a slowdown in reporting over the weekend.

Florida (12,624) reported the biggest jump for the day, with its increase ranking second to its record 15,300 leap on Sunday. The rise meant that Florida broke New York’s seven-day average record for cases per million people, Covid Tracking Project said on Twitter.

Other populous hot spots like California (8,358) and Texas (5,655) saw increases that were comfortably down from recent records.

Among the 13 US states to report one-day increases of more than 1,000, Tennessee (3,314), Kansas (1,447) and Washington (1,438) reported record jumps.

A further 327 people in the US died from coronavirus over the past day, the smallest increase since July 6.

Asia-Pacific stocks track Wall Street lower

Asia-Pacific stocks dipped on Tuesday, mirroring falls on Wall Street following rising US-China tensions and as a jump in coronavirus cases prompted California to reverse most of its economic reopening measures.

Japan’s Topix shed 0.3 per cent, the Kospi in South Korea was down 0.5 per cent and the S&P/ASX 200 slipped 0.2 per cent in Australia.

Those falls came after the S&P 500 closed down 0.9 per cent and the Nasdaq Composite fell 2.2 per cent as technology shares gave up recent gains.

US-China tensions unsettled investors after Washington hardened its stance over China’s territorial claims in the South China Sea and Beijing sanctioned US senators Marco Rubio and Ted Cruz for their comments over Xinjiang.

Growing coronavirus outbreaks in the US remained in focus with more than 8,000 cases reported in California on Monday. The state’s governor ordered bars, cinemas and dine-in restaurants to close, dealing a blow to the US economic recovery.

News you might have missed

Texas reported its first decline in coronavirus hospitalisations in 15 days, while the number of new cases and deaths eased from recent records.

California took further steps to reverse its reopening process imposing restrictions on restaurants, cinemas and bars, and Los Angeles county said students would not return to classrooms in autumn.

The US budget deficit totalled $864bn in June, a record high, as government spending in response to the economic crisis triggered by the pandemic surged and tax revenues tumbled.

A senior Federal Reserve official has called for more “discipline” from Americans in wearing masks and following restrictions saying compliance was more important for the economy than fiscal or monetary policy.

Disney will close its theme park in Hong Kong less than a month after it reopened as the government has limited group gatherings amid a resurgence in coronavirus cases.

A rebound in demand for oil as governments ease lockdowns, together with production curbs by some of the world’s biggest producer nations, is helping to alleviate oversupply, Opec’s secretary general said.

Catalonia has reported more than 1,000 coronavirus cases in the past two days as the northeastern region in Spain struggles to control Covid-19 outbreaks among agricultural workers.

Pfizer and BioNTech’s Covid-19 vaccine candidates have received fast track designation from the US regulator, designed to speed up the process of approval if their trials prove the potential vaccines are safe and effective.

Hong Kong will require travellers from high-risk places to present proof they do not have coronavirus before they board flights to the city.

Tech groups and 18 states take on Trump over foreign student visas

Kadhim Shubber in Washington

The largest US technology groups and a group of state attorneys-general on Monday joined the battle against a new Trump administration rule that requires foreign students to return home if universities move to online-only courses in response to the coronavirus pandemic.

Facebook, Google and Microsoft were among more than a dozen technology companies who filed a brief in support of an ongoing lawsuit brought last week by Harvard College and Massachusetts Institute of Technology.

Separately, attorneys-general representing 18 states and the District of Columbia filed a pair of lawsuits seeking to block the rule, which forces foreign visa students to leave the US if their university moves to only online teaching, or to transfer to a course with physical classes.

The move by Immigration and Customs Enforcement is set to affect hundreds of thousands of international students studying in the US, and has sparked an outcry from educational institutions.

Read more here

Singapore’s economy contracts by a record 41.2 per cent

Singapore’s economy fell into recession in the second quarter with a sharp 41.2 per cent contraction after the country imposed strict lockdown measures to halt the spread of coronavirus.

The quarter-on-quarter fall in gross domestic product was the largest on record for the city state, according to preliminary figures from the ministry of trade and industry and follows a 3.3 per cent contraction in the first quarter.

In year-on-year terms, the country’s economy shrank by 12.6 per cent owing to “circuit breaker” measures imposed from April 7 to June 1 that forced non-essential businesses to be closed. Economists polled by Reuters had forecast a 10.5 per cent fall. The economy had shrunk by 0.3 per cent in the first quarter compared to the same period last year.

The fall confirms that the city state’s is in technical recession — defined as two consecutive quarters of contraction.

Singapore’s export-driven economy was also hit by a fall in external demand as countries around the world entered lockdowns to prevent the spread of coronavirus.

Construction fell by 54.7 per cent year on year as foreign construction workers were restricted to their dormitories following outbreaks among the hundreds of thousands of migrant workers in Singapore.

Alex Holmes, Asia economist with Capital Economics, forecasts that Singapore’s economy will rebound in the second half of the year now lockdown measures have been eased and thanks to government stimulus measures,. He said its recovery would outpace others in the region.

“The key reason for optimism is the huge size of the government’s stimulus package, which is equivalent to around 20 per cent of GDP,” he said. “This has supported businesses and households through the crisis, which should allow output to bounce back now that the economy is reopening.”

Spread of fake news adds to Brazil’s pandemic crisis

Bryan Harris in São Paulo

As the coronavirus spread through Brazil this year, ominous stories began filtering out through social media, often via federal lawmakers with hundreds of thousands of followers.

In the northeastern state of Ceará, one viral message claimed that local authorities were burying empty coffins in order to exaggerate the scale of the pandemic, claim relief funds and keep people under control.

The information was bogus, but its mass dissemination — in some cases by elected lawmakers — speaks volumes about the prevalence of fake news in Latin America’s largest nation. Nine in every 10 Brazilians have been exposed to fake news about the pandemic, which is typically shared in WhatsApp groups, according to a study by non-profit group Avaaz. Seven in 10 say they believed the information they received.

“The risks of fake news have gained new urgency because of the seriousness of the health issue,” said João Victor Longhi, a public defendant and member of the Brazilian Institute for Civil Responsibility.

Read more here

Concerns rise over micro-loan practices in Cambodia

There are rising concerns about growing indebtedness among Cambodia’s most vulnerable communities as a result of the micro-loan industry, with many families being forced to sell their homes and land.

Human Rights Watch, the international advocacy group, said on Tuesday that micro-loan providers were failing to bring in debt-relief measures to help people through the added difficulties brought in by the pandemic.

It called on the Cambodian government and the National Bank of Cambodia to urgently freeze interest on the loans and to suspend debt collection for micro-loan borrowers who are no longer able to meet payments due to coronavirus.

“Many Cambodians fear losing their land more than catching the coronavirus because they can’t pay back their loans and the government has done little to help them,” said Phil Robertson, deputy Asia director at Human Rights Watch.

Cambodians hold the world’s highest average amount of microfinance institution loans, HRW said, adding that it had concerns about poor financial literacy and unethical lending practices.

It wrote to Cambodia’s top nine micro-loan providers in May to appeal for debt relief.

However, Prime Minister Hun Sen said on June 24 that the loan providers should “confiscate properties of those who follow the opposition’s appeal not to pay back the loans”.

Recent research by Cambodian nongovernmental groups show that low-wage workers primarily take out micro-loans to purchase or build houses, pay off other unpaid debt or buy assets such as a motorbike or land. It was less common to use loans for business agricultural purposes.

Chinese export and import growth beat estimates in June

Xinning Liu in Beijing and Thomas Hale in Hong Kong

China’s exports and imports unexpectedly rose in June, official data showed on Tuesday.

Exports were up 0.5 per cent compared to the same month a year earlier in dollar terms, while imports rose 2.7 per cent. A poll of economists conducted by Reuters forecast a 1.5 per cent fall for outbound shipment and a 10 per cent drop for imports.

China’s exports have come under intense pressure this year as the virus raged across Europe and the US, with exports to the latter falling 11 per cent in the first five months of the year.

The sign of improvement in activity comes ahead of the release of China’s second quarter gross domestic product figures on Thursday, which are widely expected to show a return to growth after a historic contraction at the start of the year.

Despite the uptick, Li Kuiwen, spokesperson for the customs administration, pointed to a “grim and complicated external environment”.

“It seems that the uncertainties faced by China’s foreign trade development are still increasing significantly,” he said.

Macau casino stocks jump after it lifts quarantine on Chinese visitors

Shares of Macau-based casinos climbed on Tuesday after the government lifted quarantine restrictions on visitors from neighbouring Guangdong province.

Galaxy Entertainment jumped 4.9 per cent and Sands China was up 5 per cent after a 14-day quarantine requirement for visitors from Guangdong province was relaxed.

Those entering from Guangdong must produce a negative test for coronavirus taken in the past seven days and download Macau’s health app

Macau residents will be permitted to travel to nine cities in Guangdong province if they live or work there without undergoing a 14-day quarantine. Those travelling to the mainland must report their health via the territory’s health app and avoid social gatherings.

South Korea slashes ambitions for steep rise in minimum wage

Song Jung-a in Seoul

South Korea will raise next year’s minimum wages by 1.5 per cent, the smallest annual increase it has ever awarded, as it seeks to conserve resources to battle the fallout of the coronavirus pandemic.

The minimum hourly wage for 2021 was set at Won8,720 ($7.25), which will affect up to 4m workers, according to the Minimum Wage Commission. The decision to limit the pay increase effectively affects the country’s most vulnerable workers and means President Moon Jae-in will have reneged on a campaign pledge to raise the minimum wage to Won10,000 by mid-2020.

The government raised the minimum wage by 16.4 per cent and 10.9 per cent in 2018 and 2019 respectively, but the sharp hikes backfired, resulting in a wave of job losses. The minimum wage was raised by a smaller 2.9 per cent this year after criticism of the previous steep increases from small and mid-sized companies and “mom and pop” stores.

South Korea’s export-driven economy is forecast by the International Monetary Fund to contract 2.1 per cent this year, due to the coronavirus pandemic.

Exports have fallen for the past four consecutive months as lockdowns damped global demand. The country’s outbound shipments fell 10.9 per cent in June, following a 23.6 per cent drop in the previous month.

South Korea’s unemployment rate hit a 10-year high in May as the pandemic forced businesses to slash hiring. The country’s seasonally adjusted unemployment rate rose from 3.8 per cent in April to 4.5 per cent in May, according to Statistics Korea.

The Bank of Korea has cut interest rates to a record low of 0.5 per cent while the government has announced a series of stimulus measures to prop up the slowing economy.

Singapore and Malaysia to open business corridor

Stefania Palma in Singapore

Singapore and Malaysia aim to gradually resume cross-border travel for essential business and official purposes starting on August 10, the two governments said in a statement on Tuesday.

This is a significant move for the neighbouring countries given that about 300,000 people crossed the border every day for work before the pandemic.

Eligible travellers must complete polymerase chain reaction (PCR) swab tests and follow a “controlled” itinerary to be submitted to authorities.

Under this scheme, residents holding long-term immigration passes for business may also cross the border for work and return home for short-term leave after at least three consecutive months.

The two countries are developing other travel programmes including a “daily cross-border commuting proposal”.

Scientists warn of surge in deaths from malaria, TB and HIV

Scientists are warning that deaths from malaria in lower and middle-income countries could surge by more than a third over the next five years due to the disruption of health services caused by the Covid-19 pandemic.

New research published in The Lancet Global Health Journal forecast a 36 per cent rise in malaria, a 20 per cent rise in tuberculosis and a 10 per cent rise in HIV in the poorer areas of the world that are most affected by infectious diseases.

“The Covid-19 pandemic and actions taken in response to it could undo the some of the advances made against major diseases such as HIV, TB, and malaria over the past two decades, compounding the burden caused by the pandemic directly,” says Timothy Hallett from Imperial College London, UK, who co-led the research. He added that the impact of the pandemic could be avoided by maintaining core services and continuing preventative measures.

Malaria deaths worldwide have reduced by half since 2000, although progress has stalled as mosquitoes and parasites gain resistance to treatment. Similarly, deaths due to HIV/AIDS have halved in a decade driven by the availability of antiretroviral therapy (ART) drugs. An estimated 49m lives were saved through TB diagnosis and treatment between 2000 and 2015, The Lancet study said.

Peter Sands, executive director of The Global Fund to Fight Aids, Tuberculosis and Malaria said outcomes could be even worse than the researchers feared.

He said the The Global Fund was conducting regular surveys across the more than 100 countries in which it invests and had found that 85 per cent of HIV, 78 per cent of tuberculosis, and 73 per cent of malaria programmes were being disrupted.

“We must measure success not just in terms of minimising the direct impact of Covid-19, but in terms of minimising its total impact, including the knock-on impact on HIV, tuberculosis, and malaria,” he said.

UK economic output inches up 2% in May after historic plunge

Valentina Romei

The UK economy rebounded much less vigorously than expected in May after a partial lifting of the coronavirus lockdown provided a smaller than expected boost to the country’s output.

Gross domestic product rose 1.8 per cent in May compared to the previous month, according to data from the Office for National Statistics. This is well below the 5.5 per cent forecast by economists polled by Reuters.

The monthly increase in GDP was small compared with the 20.4 per cent plunge registered in April. As a result, in May the UK economy was still 24 per cent smaller than in the same month last year.

South Korea unveils $130bn plan to create 1.9m jobs

Song Jung-a in Seoul

South Korea plans to spend Won160tn ($132bn) to create 1.9m jobs by 2025 as part of its New Deal programme to shore up Asia’s fourth-largest economy following the hit from the coronavirus pandemic.

President Moon Jae-in said the latest spending plan will help South Korea become a trendsetter in digital technology and green energy. Mr Moon has tried to spur an economic recovery by promoting technology innovation and environmentally friendly industries as the South Korean economy faces its first annual contraction since the Asian financial crisis.

The massive spending plan announced by Mr Moon marks a sharp increase from the initial Won76tn spending plan unveiled in June. The central government will spend Won114tn on the job creation programme that will focus on the digital technology and renewable energy sectors. Local governments and the private sector will contribute Won25tn and Won21tn respectively.

“I hope the Korean-version New Deal will be a new opportunity for those who need jobs,” Mr Moon said on Tuesday, adding his economic initiative will pave the way for the country’s “grand transformation into a trendsetting nation.”

The five-year spending plan comes after the government announced stimulus packages worth Won277tn so far this year to support the virus-hit economy.

European equities set to turn lower as volatility persists

European stocks are expected to retreat at the open, as focus turned to a combination of rising geopolitical tensions, the rolling back of reopening measures in US states and expectations of a brutal quarterly results season.

Futures trading tipped London’s FTSE 100 to drop by 1 per cent, while Frankfurt’s Xetra Dax was set for a steeper fall of 1.6 per cent.

The declines would follow suit of Asia and the US, where overnight the S&P 500 gave up initial gains to end almost 1 per cent lower after briefly crossing into positive territory for the year, and the Nasdaq fell 2.1 per cent.

Investor sentiment was soured by California joining Texas and Arizona in rolling back its economic reopening after reaching a record number of Covid-19 hospitalisations. Rising US-China tensions, as Washington hardened its stance on Beijing’s territorial claims in the South China Sea, added to the caution.

Tehran closes businesses and public places to curb spread of virus

Monavar Khalaj in Tehran

Iran has obliged some public places and businesses to shut in Tehran for at least a week from Tuesday to curb the spread of coronavirus after an accelerated rise in deaths.

Those closing for the next few days include cafes, beauty salons, museums, libraries, cinemas, indoor swimming pools and gyms. Any public gatherings such as mourning and wedding ceremonies are prohibited from Tuesday.

“The new decision will be strictly monitored to control and curtail the growing rate of the disease in Tehran province until we witness a declining trend,” Tehran governor general Anoushiravan Mohseni-Bandpey said.

Despite earlier efforts to control the daily death rate, which fell to as low as 35 on May 16, the Islamic republic has been experiencing a spike in new infections and related casualties since last month.

The death toll surpassed 13,000 on Monday from 259,652 who tested positive. The figures make Iran the top country in the Middle East in terms of fatalities.

Lidl to create jobs and stores as it forges forth with UK expansion

Discount grocery chain Lidl is to invest £1.3bn to expand in the UK over the next two years as it presses ahead with its expansion plans and creates thousands of jobs.

The German group, which belongs to the Europe’s largest food retailer Schwarz retail group, plans to add as many as 125 stores in the UK by 2022.

By the end of this year it will add 25 stores and 1,000 posts. The £1.3bn investment will go towards 100 more stores in Britain over the years 2021 and 2022, creating 4,000 jobs. By the end of 2023, Lidl aims to have 1,000 stores in Britain, up from 800 now plus its 25,000 employees and 13 warehouses.

Demand for groceries has jumped during the Covid-19 pandemic as customers turn from eating out to cooking at home. Lidl added 2,500 temporary jobs to cope with the surge during the pandemic crisis.

Some stores however have struggled to handle the increase in shoppers, coronavirus shopping habits, social distancing and other safety measures.

Lidl and fellow discounter Adli on top of that have suffered from their lack of an online offering as many customers have avoided stores and had their groceries delivered.

The group is “forging ahead with our expansion plans, despite the challenging circumstances that have been faced over the past months”, chief executive Christian Härtnagel said on Tuesday.

Ocado Retail profit almost doubles as grocery delivery demand soars

Jonathan Eley in London

Profit at Ocado Retail almost doubled during the first half of the year as demand for grocery delivery soared during the coronavirus crisis, with the group predicting that much of the increase in demand would persist.

“The world as we know it has changed,” said chief executive and co-founder Tim Steiner. “As a result of Covid‐19 we have seen years of growth in the online grocery market condensed into a matter of months and we won’t be going back.”

He expects a “permanent redrawing of the landscape of the grocery industry worldwide” that would mean more demand for its technology and expertise.

Sales at Ocado Retail, a joint venture between Ocado and Marks and Spencer, rose only 27 per cent across the half to £1.02bn. That compares with 48 per cent reported by market leader Tesco in its first fiscal quarter and the 87 per cent first-quarter rise at J Sainsbury.

Both the conventional supermarkets achieved a rapid increase in delivery and click-and-collect capacity by adding thousands of in-store pickers.

US round up: states reverse reopening efforts

The governor of California has ordered all bars across the state to shut their doors again and told restaurants, movie theatres and museums to stop doing business indoors, becoming the latest state to curtail reopening efforts.

Gavin Newsom also ruled that indoor operations must cease at places of worship, fitness centres, zoos, wineries, hairdressers and barbers and shopping malls.

This reversal of lockdown easing plans follows less extensive U-turns in Texas and Arizona, and the reimposition of restrictions by local authorities in south Florida — risking the rebound in some of the country’s most vibrant economic centres.

Robert Kaplan, president of the Federal Reserve’s regional bank in Texas, has also urged Americans to wear masks in public, saying their willingness to follow strict health guidelines would be more helpful to the economy than fiscal or monetary policy.

He said in a webcast to the National Press Club:

[T]here’s no question, based on conversations I’ve had extensively with epidemiologists and infectious disease experts throughout the US, that if all of us wore a mask, we would likely substantially mute the transmission of this disease.

We would have higher GDP from here, and we would have a lower unemployment rate.”

Over the seven days to Monday, California reported an average of 8,211 new coronavirus cases a day. Florida on Monday posted one of the highest one-day increases since the outbreak began, with 12,624 infections over the previous 24 hours.

The US has confirmed more than 3.3m cases of Covid-19, across all 50 states, with 127,400 deaths. For more detail on the spread of the virus across the US, see the FT’s interactive coronavirus tracker

European stocks drop as US states roll back economic reopening plans

Global stocks fell following a sharp reversal on Wall Street, as concerns mounted over the rollback of reopening measures in the US and investors braced themselves for a brutal quarterly results season.

European shares continued their volatile trading pattern on Tuesday, as the continent-wide Stoxx 600 fell by 1.2 per cent. London’s FTSE 100 dropped by 0.8 per cent, while Frankfurt’s Xetra Dax shed 1.3 per cent.

“Equities are navigating through a ‘zone of uncertainty,’ because earnings visibility remains elusive and fresh spikes of Covid-19 are occurring in the majority of US states, delaying and even rolling back economic reopening,” said Terry Sandven, chief equity strategist at US Bank Wealth Management.

The declines came after a turbulent session in New York, where the S&P 500 gave up initial gains to end almost 1 per cent lower after briefly crossing into positive territory for the year.

UK to fall in line with other nations as face masks to become compulsory

UK health secretary Matt Hancock is set to announce rules that will make face masks compulsory in England, bringing the country into line with Scotland, Germany, Spain, Italy and Greece.

The move on Tuesday follows contradictory messages from the government on the necessity of face coverings. Cabinet office minister Michael Gove said on Sunday that they should not become mandatory in English shops.

The prospect of the rules on masks, which are likely to come into force from July 24, have sparked concerns among retailers about how the use of masks will be enforced in shops and whether shop staff will also have to wear them.

Helen Dickinson, chief executive of the British Retail Consortium, said:

“While retailers will play their part in communicating the new rules on face coverings, they must not be the ones enforcing these rules.

With hundreds of incidents of violence and abuse directed at retail staff every day, we welcome the announcement that enforcement will be left to the authorities, rather than potentially putting hardworking retail colleagues in harm’s way.

We look forward to further clarity over whether the wearing of face coverings will apply to shop staff. If so, there must be flexibility for colleagues who are in stores all day and can already benefit from other safety measures such as protective screens and 2m distancing.

UK two-year government borrowing cost slips to match Japan level

Tommy Stubbington

The UK’s two-year borrowing cost dropped to the same level as Japan’s on Tuesday morning, in the latest sign that investors are increasingly speculating on the possibility that the Bank of England may set negative interest rates.

The two-year gilt yield fell to minus 0.13 per cent after data showed a weaker than expected rebound in UK GDP in May, equal to the equivalent Japanese government bond. Japan’s bond market has long been byword for ultra-low yields and minimal volatility, thanks to the huge chunk of the market owned by the Bank of Japan after years of asset purchases.

UK 30-year yields also dropped below Japan’s late last month. Only Japan’s 10-year borrowing costs, which are controlled by the BoJ, remain meaningfully below the UK’s.

Gilts are now trading at negative yields for maturities of up to seven years, with some traders betting that the BoE will push short-term interest rates below zero in a bid to bolster the economic recovery. May’s 1.8 per cent rise in GDP followed a plunge of 20 per cent in April.

The disappointing growth figure also pushed the pound down 0.2 per cent to a six-day low of $1.2519 against the dollar. The euro rose to its highest since June 30 against sterling, with €1 worth 90.55p.

UK’s OBR says public borrowing to surpass £370bn, a peacetime record

Chris Giles in London

The government’s fiscal watchdog said on Tuesday that government borrowing was set to exceed £370bn in 2020-21 after including the measures in Rishi Sunak’s summer statement last week.

At about 19 per cent of national income, the Office for Budget Responsibility said the deficit would be a peacetime record. It imparted further bad news for the Treasury as it outlined three plausible economic scenarios only one of which involved a full economic recovery.

In the optimistic scenario, the level of output rose back to the pre-pandemic forecast path next year, but the watchdog indicated that the coronavirus crisis was likely to leave persistent scars on the economy. In its central and pessimistic scenarios, the permanent damage would leave output 3 and 6 per cent lower than its March Budget forecasts long into the future.

These scars permanently undermine the public finances, the OBR said, with the budget deficit still 4.6 per cent of national income in the central scenario compared with 2.2 per cent in the Budget forecast.

That level of borrowing would leave debt rising as a share of gross domestic product and imply austerity in the form of public spending cuts or tax increases was needed.

The OBR published these forecasts as part of a longer-term analysis of the public finances in which it said the outlook had deteriorated significantly since it previously looked at the path of borrowing over the next 50 years.

It said even in its most optimistic scenario, public debt was on an unsustainable path and even on its most optimistic scenario it was likely to exceed 300 per cent of national income by 2070.

Risk of eurozone credit crunch as banks plan to reduce business loans

Martin Arnold in Frankfurt

Banks plan to pull back on the flow of loans to eurozone businesses this summer in anticipation of governments winding down their loan guarantee schemes, the results of a European Central Bank survey published on Tuesday showed.

The move could lead to a credit crunch for companies still struggling with the fallout from the coronavirus pandemic in the second half of the year, which would deal a fresh blow to jobs and growth in the region.

Banks told the ECB that in the third quarter they expected “a considerable net tightening of credit standards on loans to enterprises”, due to a likely winding down of state loan guarantee schemes in some countries.

Demand for loans from eurozone businesses surged to a record in the second quarter, while households’ appetite for borrowing fell to an all-time low, banks told the ECB.

The increase in borrowing requirements for companies in all the largest eurozone countries underlined how the disruption of the pandemic has caused “acute liquidity needs for inventories and working capital”, the ECB said.

However, in response banks reported that they had only slightly tightened their lending standards to businesses and the rejection rate for corporate customers seeking a loan fell 12 per cent, reflecting the vast efforts of public authorities to avoid a credit crunch.

Coronavirus claims more than 50,000 lives in England and Wales

Joshua Oliver in London

More than 50,000 people in England and Wales have died of coronavirus-related illnesses since the first Covid-19 case emerged at the beginning of the year.

The two UK nations have registered 50,548 deaths linked to Covid-19. The week to July 3 indicated 532 coronavirus-related deaths, which account for almost 6 per cent of all deaths in England and Wales, the lowest figure since March.

Deaths from all causes remained below the five-year average for a third week in the seven days ending July 3, the Office for National Statistics said.

Wales though has recorded a slight increase in Covid-19 deaths, which rose to 35 up from 30 in the previous week.

Rebound in eurozone industrial output is slower than expected

Martin Arnold in Frankfurt

Industrial production in the eurozone recovered more slowly than expected in May and remains a fifth below its levels of a year ago, Eurostat data published on Tuesday revealed.

The record 12.4 per cent rise in eurozone industrial output in May was below the 15 per cent consensus forecasts of economists surveyed by Reuters, curbing recent enthusiasm over signs of a quicker than expected recovery in the region’s pandemic-stricken economy.

“We think the recovery in industry will stall with output well below pre-crisis levels and that it will remain weak through the rest of the year,” said Andrew Kenningham, economist at Capital Economics.

Eurostat said industrial production rose fastest in Italy, where it rebounded 42 per cent in May after heavy falls in the previous two months, while it jumped 20 per cent in France and Slovakia.

But compared with a year ago, industrial production remains down by more than 30 per cent in Slovakia and it is still more than 20 per cent lower in all of the eurozone’s largest economies, including Spain, France, Germany and Italy.

Tomas Dvorak, economist at Oxford Economics, predicted eurozone industrial production would only recover to pre-pandemic levels by the end of next year.

“We expect the pace of the recovery to soften after the initial bounce-back, as weak external demand, supply chain disruptions and limited operating capacity will weigh on the industrial sector,” he said.

Investors poised for quarterly earnings from Wall Street

Philip Georgiadis in London

Wall Street is preparing for an earnings season like no other, offering investors insights into the damage wrought by the coronavirus crisis on the US’s biggest listed companies.

JPMorgan, Citigroup and Well Fargo are about to report second-quarter numbers. US banks will be an area of particular focus, not just for their own figures, boosted by trading and weakened by writedowns, but also the insights they offer into the broader economy.

S&P 500 companies are expected to unveil an overall 45 per cent plunge in quarterly profits, data provider FactSet shows, the biggest drop since the 69 per cent fall of the fourth quarter of 2008. All 11 of the US benchmark’s sectors are forecast to post declines.

And if the numbers are grim, the outlook may not provide much more comfort.

About 150 companies in the S&P 500 have withdrawn their formal guidance on profits, analysts at Bank of America say, adding that the path of the pandemic is just too uncertain.

Read more on an earnings season without precedent here.

Live Q&A: stamp duty, furlough bonuses and the hospitality sector

Tune in to the FT’s latest live Q&A at midday, which is about UK chancellor Rishi Sunak’s summer statement.

Click here to find out how to follow along or watch back.

Political correspondent Jim Pickard and personal finance editor Claer Barrett are discussing Mr Sunak’s stamp duty holiday for home buyers and a range of other stimulus plans.

They say:

Estate agents are already reporting higher levels of activity following the stamp duty cut, which will also benefit buy-to-let landlords.

We also want to hear what readers think about the effectiveness of measures including the £1,000 “furlough bonus” for businesses who retain workers beyond January next year, and plans to reward businesses who create apprenticeships and trainee positions for younger workers.

If you run a pub, restaurant or hotel, we are very keen to hear your take on measures to boost the hospitality sector, including the temporary VAT cut and “Eat out to help out” initiative.


3M and MIT researchers team up to develop rapid Covid-19 test

Peter Wells in New York

3M is partnering with researchers at the Massachusetts Institute of Technology in a bid to develop a low-cost diagnostic test for coronavirus that can be mass produced and could deliver results “in minutes”.

The two join an initiative set up in June by the US government aimed at accelerating the development and commercialisation of Covid-19 testing technology in an effort to limit the spread of the virus.

The MIT team has already been granted Phase One approval in the programme – which is being run by the National Institute of Health and is known as Rapid Acceleration of Diagnostics Tech, or RADx Tech – and is set to begin four weeks of research to prove the test concept and that is can be commercialised on a large scale.

Minnesota-based 3M, which has become well known during the coronavirus pandemic as the maker of the coveted N-95 face mask, said in its announcement on Tuesday it would draw on its own expertise in biomaterials and bioprocessing but also brings to the project extensive experience as a global medical device manufacturer.

The sort of rapid coronavirus test 3M and MIT and others hope to develop and roll out forms part of the US government’s broader strategy to scale up testing and treatment of the disease. These so-called point of care tests do not need to be sent to laboratories for testing and, while slightly less precise, could help alleviate a backlog at labs.

Owing to a surge in coronavirus cases across the US south and west and shortages of key chemicals used in diagnostic tests, the average turnround time for results in the US has started to climb.

Delta steers 15,000 staff into early retirement

Claire Bushey in Chicago

Delta Air Lines is to shed at least 15,000 employees through early retirement, an uptake the company said would allow it to impose fewer furloughs than US rivals in a sector upended by the pandemic.

The Atlanta-based carrier on Tuesday reported a $7bn pre-tax loss in the second quarter, the second largest in its history. Operating revenue tumbled 88 per cent from a year earlier to $1.5bn.

The mammoth second-quarter loss followed a pre-tax loss of $607m in the first quarter, as the virus and accompanying lockdowns began to hit global travel.

Adjusted diluted loss per share in the second quarter totalled $4.43, worse than the $4.16 expected by analysts polled by FactSet.

The company averaged $43m in daily cash burn for the quarter, although it had fallen to $27m by the end of June.

The US airline industry, reeling from a collapse in demand because of the coronavirus crisis, has agreed not to cut jobs or pay until October as part of a $50bn government aid package.

However, its biggest rivals have warned of drastic job cuts once the assistance ends. American Airlines said this month it would have to “right-size” its frontline workforce, with up to 30 per cent of jobs no longer necessary, while United Airlines has sent furlough notices to 45 per cent of its US employees.

Delta employs 91,000 people. Ed Bastian, chief executive, said the retirements and the 45,000 employees who have opted for voluntary leave would allow it to scale back with fewer furloughs than competitors.

“When you put that all together, any furlough at Delta will be much smaller than the numbers at United or American,” he said.

Read the full article here

JPMorgan loan loss charges top $10bn on ‘uncertain outlook’

Laura Noonan in New York

JPMorgan Chase has taken almost $10.5bn of loan loss charges in the second quarter as the biggest US lender warned of “uncertainty” ahead even as some indicators have pointed to a nascent economic recovery.

The loan loss charges, which included an increase in reserves for future soured loans of $8.9bn, left the bank with second quarter net income of $4.7bn or $1.38 per share. That was almost half what it earned a year earlier, but far better than the $3.3bn forecast by analysts in a Bloomberg poll.

Group-wide revenue rose 15 per cent to almost $33bn, which was also better than what analysts had predicted, after volatile markets drove trading revenues almost 80 per cent higher.

JPMorgan had already warned that its second quarter loan loss charges would be higher than the bumper $8.25bn it took in the first three months of the year, as banks across the US braced for a surge in defaults.

“Despite some recent positive macroeconomic data and significant, decisive government action, we still face much uncertainty regarding the future path of the economy,” said JPMorgan chief executive Jamie Dimon.

Shares in the bank rose almost 4 per cent in pre-market trading.

Read the full article here

Wall Street set to edge up as earnings season begins

US stocks were on course to edge higher at the open on Tuesday, recovering some of the previous session’s losses as investors weighed the reimposition of lockdown measures in parts of the US and the start of quarterly results season.

Futures tipped the S&P 500 to rise 0.3 per cent, after a turbulent session in New York on Monday, where the benchmark stock index ended almost 1 per cent lower after briefly crossing into positive territory for the year. The tech-heavy Nasdaq Composite fell 2.1 per cent.

The Cboe’s Vix index of S&P 500 volatility, known as Wall Street’s fear gauge, was elevated above 30 on Tuesday following the sharp declines.

JPMorgan warned of “significant uncertainty” ahead as it opened Wall Street earnings season by outlining almost $10.5bn of loan loss charges in the second quarter.

“Equities are navigating through a ‘zone of uncertainty’, because earnings visibility remains elusive and fresh spikes of Covid-19 are occurring in the majority of US states, delaying and even rolling back economic reopening,” said Terry Sandven, chief equity strategist at the wealth management unit of Minnesota-based US Bank.


Virgin Atlantic secures £1.2bn rescue package to keep flying

Tanya Powley in London

Virgin Atlantic has agreed a £1.2bn rescue package that will help secure the grounded airline’s future for the next five years after months of negotiating with shareholders and private investors.

Shai Weiss, chief executive, told the Financial Times shortly after the deal was signed off on Tuesday that the rescue plan was a “major achievement” that most people “probably thought . . . impossible”.

The rescue package will inject about £1.2bn into the airline over the next 18 months, with £200m of cash from Richard Branson’s Virgin Group and £170m of debt funding from US hedge fund Davidson Kempner Capital Management. 

It will also include £400m of fee deferrals from shareholders, Virgin Group and Delta Air Lines, which owns 49 per cent, as well as agreements with credit card companies to unlock cash and a cost-saving programme that will involve 3,550 job cuts.

Securing the rescue will be a big relief for Virgin Atlantic, which has spent the past four months trying to come up with a funding package after airlines were forced to ground operations in March as the pandemic spread across the world.

You can read more on this story here.

Wells Fargo slashes dividend after sinking to $2.4bn loss

Robert Armstrong in New York

Wells Fargo slashed its dividend by 80 per cent after a sharp increase in charges for loan losses and lower interest rates knocked the lender to its first quarterly loss since the depths of the financial crisis.

The bank took a charge of $9.5bn in the three months to June as it increased its provisions for soured loans and wrote down the value of others. The large provision for credit losses pushed the bank to a loss of $2.4bn, compared with a profit of $6.2bn in the second quarter of 2019.

“We are extremely disappointed in both our second-quarter results and our intent to reduce our dividend,” said Charles Scharf, Wells’ chief executive.

“Our view of the length and severity of the economic downturn has deteriorated considerably . . . [but] our franchise should perform better, and we will make changes to improve our performance,” he added.

The group, among America’s biggest lenders, cut its quarterly dividend from $0.51 to $0.10 per share, its first reduction since the financial crisis. It was forced to do so because of new rules from the Federal Reserve capping dividends at recent earnings.

Read the full article here

Opec sees oil demand rebounding sharply next year

Anjli Raval, Senior Energy Correspondent

Oil demand is expected to rebound sharply next year, even as the impact of the pandemic is set to persist through 2021.

Demand is expected to fall by 8.9m barrels a day in 2020 to 90.7m b/d and then grow by 7m b/d next year, Opec’s statistics arm said in its monthly oil market report. Demand is still expected to stay below pre-crisis levels of almost 100m b/d.

Officials from Opec and Russia this week plan to discuss next steps for oil policy. It is widely believed that countries from August will ease production curbs of 9.7m b/d that have been in place since May.

It had been expected that oil producers would reduce these cuts to 7.7m b/d from August until the end of the year, before tapering further to 5.8m b/d between January 2021 and April 2022.

Based on its demand forecast and supply trends from non-Opec countries, the cartel now expects demand for its crude at 29.8m b/d next year, which is 6m b/d higher than the 2020 level.

Keeping the cuts in place, albeit at lower levels, despite the market deficit in the months to come could be perceived as a means to reduce bloated oil stockpiles and raise prices at a time of economic crisis.

US consumer prices post first rise since February

US consumer prices bounced back in June, posting their first monthly rise since before coronavirus-related shutdowns rattled the economy.

The consumer price index climbed 0.6 per cent from May, a swing from a 0.1 per cent drop a month earlier, beating economists’ forecast for a 0.5 per cent increase. Petrol accounted for more than half of the index’s growth in June, reflecting a recovery in fuel prices as more Americans returned to the road. Food prices also increased.

Excluding volatile food and energy prices, the so-called core CPI was up 0.2 per cent versus a consensus estimate of 0.1 per cent growth.

The data show that prices have recovered amid the gradual reopening of the US economy, after three straight months of declines in the CPI. In April, the CPI sank 0.8 per cent, the biggest drop since December 2008.

The report also signals that inflation remained muted. The Federal Reserve, which slashed interest rates to near zero as part of its effort to boost the economy, has indicated that it will not raise rates until at least after 2022.

The CPI was up 0.6 per cent year-over-year, up from 0.1 per cent in May. It was up 2.3 per cent for the year ending in February.

US stocks fall further as earnings season kicks off

Wall Street stocks slipped further on Tuesday as investors assessed an opening foray in a quarterly earnings season that will guide investors on the pace of the US economic recovery.

The S&P 500 fell 0.6 per cent in early trading, with futures tied to the benchmark stock index turning lower after hefty loan loss charges at JPMorgan Chase, Wells Fargo and Citigroup. The tech-weighted Nasdaq extended its losses, dropping 1.3 per cent.

JPMorgan warned of “significant uncertainty” ahead as it opened Wall Street earnings season by outlining almost $10.5bn of loan loss provisions in the second quarter.

Wells Fargo slashed its dividend by 80 per cent after sinking to a $2.4bn loss, while Citi’s net income for the second quarter came in at $1.3bn, down 73 per cent from the year before, citing a “deterioration” in the economic outlook.

Florida reports record one-day jump in deaths but new cases ease

Peter Wells and Matthew Rocco in New York

Florida reported a record one-day increase in deaths on Tuesday but new cases in the state rose by fewer than 10,000 for the first time in five days.

A further 133 people in Florida died from Covid-19 over the past 24 hours, the state health department revealed on Tuesday morning, up from 35 yesterday and surpassing the previous record on June 9 by 13.

In one of the more encouraging signs for the state, which has emerged as one of the new hotspots for the virus in the US, new cases were up by 9,194 over the past day, down from 12,624 on Monday. Until today, Florida reported more than 10,000 cases a day for four consecutive days, including 15,300 on July 12, which was the biggest increase for any state during the pandemic.

A common trend for US states during the pandemic is that figures on Monday tend to be lower than other days of the week owing to delayed reporting over the weekend, but tick back up on Tuesday.

Despite the dip in new cases on Tuesday, Florida’s seven-day average sits at about 11,100. Yesterday, it became the first state to notch an average rate of more than 10,000 coronavirus cases a day, something even early hotspots like New York and New Jersey avoided earlier on during the depths of their crisis.

The number of people who tested positive equalled 15 per cent of all tests, when excluding those who had previously tested positive, according to Florida’s health department. The so-called positivity rate was up from 11.5 per cent a day earlier, as the state recorded fewer tests.

Florida’s infection rates have levelled off in recent days. The positivity rate over the past seven days was down more than 1 per cent compared with the previous week, which followed a 17.7 per cent jump, based on Financial Times analysis of figures from the Covid Tracking Project.

Hospitalisations were also higher, with the number of people currently being treated rising to 8,197, according to the state agency overseeing hospitals. Only Texas has more people currently hospitalised.

Miami-Dade county and neighbouring Broward county represented 37 per cent of Florida’s hospitalisations. The state reported on Monday that a total of 8,088 patients with a primary diagnosis of Covid-19 were in hospital.

Johannesburg Covid-19 crisis: ‘The storm is upon us’ | Free to read

Joseph Cotterill in Johannesburg

Security guard Prince checks shoppers for compulsory cloth masks before they enter a supermarket in Soweto, a township in Johannesburg, the South African city that is the continent’s single biggest hotspot for coronavirus.

“I’m very, very, very worried. You don’t know who’s got it, and who has not,” said Prince, 34, who wears a mask himself.

With 12,000 new coronavirus cases confirmed every day, South Africa this weekend reinstated a ban on alcohol and a curfew in an effort to ease demand for hospital beds and control the virus. Infection rates have surged after an initially draconian lockdown was eased to release the pressure on the economy.

“The storm is upon us . . . it is stretching our resources and our resolve to their limits,” Cyril Ramaphosa, South Africa’s president, said on Sunday, as he urged people to wear masks.

Almost a third of South Africa’s total of 276,242 confirmed cases — more than Italy or Germany — were recorded in the past week and almost 100,000 to date have been recorded in Gauteng, South Africa’s most populous province and home to Johannesburg. Cases in South Africa’s industrial heartland exceed Cape Town, site of the country’s first big outbreak.

Read the full article here

International Baccalaureate to reassess thousands of grades

Andrew Jack

The International Baccalaureate, one of the world’s leading cross-border examination boards, is set to reassess thousands of grades it awarded this month after wide-ranging criticism from students and teachers over the marks generated by a system introduced in response to coronavirus.

The organisation, which oversaw more than 174,000 diploma exams for school leavers this summer, said it would introduce a new appeals process to review “extraordinary cases”, with priority given to scrutinising grades for students applying to universities.

It also eased the criteria for appeals and extended the deadline without penalty until the end of August for those wishing to retake exams later this year in an effort to improve their grades.

The usual IB exams were scrapped as schools were closed because of the pandemic, with assessments based on coursework verified by external examiners and adjusted by an algorithm which took into account others’ results and past performance of IB schools.

Officials indicated that a larger share of IB students had this year applied to more competitive universities, and that teachers had given a higher proportion of the top grades in individual subjects than in previous years.

North Carolina and Alabama report record increases in Covid-19 deaths

Peter Wells and Matthew Rocco in New York

States across the US south and west continued to reveal big one-day increases in deaths, with record jumps in North Carolina and Alabama.

North Carolina reported a record increase of 42 deaths over the past 24 hours, taking the total number of fatalities since the pandemic began to 1,552, the state’s health department said.

The jump in deaths accompanied a further 1,956 people in the state testing positive since Monday, or 8.2 per cent of tests completed over the period. That is up from an increase of 1,827 cases yesterday and about 500 short of the July 11 record.

North Carolina has reported more than 1,000 new cases a day for 21 consecutive days and currently has 1,109 people hospitalised with Covid-19, more than at any other time during the pandemic.

In Alabama, there were 40 new deaths attributed to coronavirus on Tuesday, the largest daily toll for the state. It recorded 1,673 new confirmed and probable cases, or 19.3 per cent of tests completed since the previous day, based on Financial Times analysis of Covid Tracking Project data.

Nevada also set a single-day record for fatalities with 19. The state also reported a new high in additional cases with 1,104, five more than its previous high, although the positivity rate on a seven-day moving average edged down to 13.4 per cent from 13.6 per cent compared to the previous day.

Arizona reported 92 deaths over the past 24 hours, a historically high level. The state’s health department said 23 of those deaths reported today were owing to death certificate matching.

On July 7, Arizona reported 117 new deaths, which could be considered a record but did include 52 fatalities from death certificate matching. Factoring those out, that day’s increase was below a peak of 88 deaths reported on July 1 that did not include any matching.

Confirmed cases in Arizona rose by 4,273 over the past day, jumping from 1,357 on Monday but about 600 short of its record one-day increase from July 1.

Fed’s Brainard warns of ‘second dip’ in economy amid virus resurgence

James Politi in Washington

A senior Federal Reserve official has warned that the new spikes in coronavirus infections across the US could lead to a “second dip” in the world’s largest economy, as she described a “thick fog of uncertainty” and “downside risks” dominating the outlook.

In one of the most downbeat comments from a top US central banker in recent weeks, Lael Brainard, a former Obama administration official who serves as a Fed governor, said the US recovery was “likely to face headwinds even if the downside risks do not materialise, and a second wave would magnify that challenge”, while continuing fiscal stimulus would be “vital” to helping the economy.

“Rolling flare-ups or a broad second wave of the virus may lead to widespread social distancing — whether mandatory or voluntary — which could weigh on the pace of the recovery and could even presage a second dip in activity,” Ms Brainard said, noting that the pain could also be felt on Wall Street.

“A broad second wave could re-ignite financial market volatility and market disruptions at a time of greater vulnerability. Nonbank financial institutions could again come under pressure, as they did in March, and some banks might pull back on lending if they face rising losses or weaker capital positions,” she said.

Ms Brainard was also sceptical that the sharp rebound in the jobs market, which in May and June recovered 7.5m of the 22m jobs lost after the initial pandemic shock, could be sustained. “The pace of improvement may slow if a large portion of the easiest gains from the lifting of mandated closures and easing of capacity constraints has already occurred. Moreover, weekly Covid case counts have been rising and some states are ramping up restrictions,” Ms Brainard said.

Ms Brainard said that in light of the murky US outlook, it was “important” for the Fed “to pivot from stabilisation to accommodation by supporting a full recovery in employment and returning inflation to its 2 per cent objective on a sustained basis” – signalling her support for additional action by the central bank.

The Fed governor pointed to “forward guidance” – or more explicit language on the path of policy – was a “vital way to provide the necessary accommodation” – suggesting a preference for tying any upward move in rates to specific inflation targets.

“Research suggests that refraining from liftoff until inflation reaches 2 per cent could lead to some modest temporary overshooting, which would help offset the previous underperformance,” she said.

Ms Brainard said balance sheet policies could also “help extend accommodation” – indicating that the Fed might want to target asset purchases along the “ short-to-medium end” of the yield curve. But she added that this was not the first option being discussed by the Fed. “Given the lack of familiarity with front-end yield curve targets in the United States, such an approach would likely come into focus only after additional analysis and discussion,” she noted.

Wall Street advances after banks report earnings

US stocks climbed as investors digested earnings from major banks and Delta Air Lines.

The S&P 500 posted its biggest gain in a week, rising 1.3 per cent with the energy and materials sectors leading the rally. The tech-heavy Nasdaq Composite added 0.9 per cent. A 4.8 per cent rise in shares of Caterpillar helped the Dow Jones Industrial Average to a 2.1 per cent advance.

Shares in Citigroup and Wells Fargo ended lower after the banks posted quarterly results. Citigroup’s net income fell 73 per cent, while Wells Fargo cut its dividend after its second-quarter loss was steeper than forecast. JPMorgan Chase edged higher on a stronger second-quarter profit than expected. Delta fell 2.7 per cent after the carrier booked a $7bn pre-tax loss, the second largest in its history, amid the fallout from the coronavirus crisis.

The yield on the 10-year Treasury note fell 0.01 percentage points to 0.628 per cent, as investors moved into the debt.

Moderna vaccine produces antibodies in early trial

Hannah Kuchler in New York

Moderna’s potential Covid-19 vaccine produced immune responses in patients in the early stage trial, according to results published in a peer-reviewed journal for the first time. 

The US biotech company’s vaccine candidate produced antibodies in all 45 participants in the first cohort of the phase one trial run by the National Institutes of Health, while the paper said there were no safety problems that could curtail further trials. 

Read more on this story here.

Fauci urges Americans to trust ‘respected medical authorities’ on virus

Lauren Fedor in Washington

Anthony Fauci, a senior member of the White House coronavirus task force, said Americans should trust “respected medical authorities” when making decisions about how to stay safe in the pandemic, just two days after the White House appeared to publicly turn against the public health expert.

Speaking at a livestreamed event run by Georgetown University, Dr Fauci, director of the US National Institute of Allergy and Infectious Diseases, said the “safest bet” was for Americans to listen to the recommendations of “respected medical authorities”.

“I believe I am one of them, so I think you can trust me,” Dr Fauci said. “I would stick with respected medical authorities who have a track record of telling the truth, who have a track record of giving information and policy recommendations based on scientific evidence and good data.”

The public health expert did not mention US president Donald Trump or other politicians by name, but said it was “entirely understandable how the public can get mixed messages and then get a bit confused about what they should do”.

Dr Fauci has attracted attention for his straight talk and pointed criticism of the US government response to the pandemic, which has created tensions with Mr Trump. At the weekend, the president and other White House officials publicly rebuked Dr Fauci, saying he had “made a lot of mistakes”.

Dr Fauci told the FT last week that he had not met Mr Trump since June 2 and had not briefed him in more than two month”.”

Calvin Klein owner PVH to close 160 retail stores and cut 450 jobs

Alistair Gray

The US retail group behind Calvin Klein and Tommy Hilfiger is to close 160 stores and cut 450 office jobs as part of a restructuring of its North America business, saying the pandemic is “dramatically reshaping” the sector.

PVH said on Tuesday it would close its Heritage Brands Retail business, which runs shops in discount outlet centres in the US and Canada. The stores stock a broad range of merchandise under the Van Heusen label, which is known for its shirts, as well as some other brands including IZOD and Warner’s.

The New York-based company also said it would reduce its office headcount by 12 per cent, a move it said would generate $80m in annual cost savings.

Stefan Larsson, president, said in a statement: “The COVID-19 crisis is dramatically reshaping the retail landscape in ways that we believe will be long-term in nature.”

US reports more than 60,000 new cases for fifth day in a week

The US reported its fifth one-day increase of more than 60,000 coronavirus cases in the space of a week on Tuesday, led by Texas, which reported a record 10,754 new infections.

A further 736 people were reported to have died, according to Covid Tracking Project data, more than double the 327 on Monday. Florida (133), North Carolina (42), Alabama (40), Nevada (19), Utah (10) and Hawaii (3) all had record one-day increases in fatalities.

A further 62,879 people tested positive for the disease over the past 24 hours, according to Covid Tracking Project data, from 58,465 on Monday. That is the third-biggest jump on record and the fifth time the daily increase has topped 60,000 since first crossing the mark on Jul 8.

After Texas, the states with the biggest jump in new cases were Florida (9,194) and California (7,346), which were lower than recent records.

Of the 13 states to report increases of more than 1,000 cases, only Texas and Nevada (1,104) had record jumps, according to Financial Times analysis of Covid Tracking Project data. The only other state with a record increase was Oklahoma (993).