Closed Coronavirus: US reports more than 65,000 new cases — as it happened

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Today’s top stories: Florida passes 300,000 coronavirus cases amid questions over lab data with missing negative test results. Walmart to require masks in all US stores. Local areas in England step up measures to avoid another lockdown. Goldman Sachs profits bolstered by bond trading boom.


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

Peter Wells in New York and Emma Boyde in Hong Kong

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.

“The recent rise in deaths is not equally distributed across the US. Where cases have risen most rapidly, deaths have followed suit,” Covid Tracking Project researchers said on Twitter.

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).


Asia-Pacific stocks track Wall Street gains

Asia-Pacific stocks rose on Wednesday, following on from Wall Street gains as expectations for more stimulus for the coronavirus-hit economy offset rising infections in southern states.

Japan’s Topix added 1 per cent ahead of the Bank of Japan’s monetary policy decision later this morning. The central bank is expected to hold interest rates. The Kospi in South Korea was up 1.3 per cent and Australia’s S&P/ASX 200 rose 0.5 per cent.

Rising US-China tensions remained in the background after Donald Trump signed legislation allowing his administration to place sanctions on Chinese officials over a draconian national security law imposed on Hong Kong. Futures tip the Hang Seng index to gain 0.5 per cent.

On Wall Street overnight, the S&P 500 ended up 1.3 per cent and the Nasdaq Composite added 0.9 per cent.

Those gains came as Lael Brainard, Federal Reserve governor, said she supported doing more to boost the US economy. She said that a “thick fog of uncertainty” meant monetary and fiscal support were needed to help the country’s economic recovery.


News you might have missed

US biotech company 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.

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.

Lael Brainard, 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.

The International Baccalaureate 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.

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.

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.

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.

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.

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

The UK 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.


Beijing records ninth consecutive day of no coronavirus cases

Health authorities in Beijing recorded a ninth consecutive day of no reported Covid-19 cases after re-imposing restrictions on parts of the city following an outbreak.

A total of 335 people were found to have Covid-19 in Beijing since the outbreak was first discovered at a wholesale food market on June 11. The city last reported the discovery of a single Covid-19 case on July 5.

There were also no new cases of people without symptoms testing positive for the virus. China does not record such infections in its official tally.

Beijing put restrictions on travel out of the capital to limit the spread of the virus.

China reported six new imported coronavirus cases to the end of Tuesday, taking the country’s official tally since the outbreak began to 83,6111.


Australia’s Victoria reports 238 new coronavirus cases

The Australian state of Victoria reported 238 new coronavirus cases on Wednesday as officials warned residents to follow lockdown restrictions or potentially face longer, more severe measures.

Daniel Andrews, Victoria premier, said one more person had died from Covid-19 over the past 24 hours and that the state had now conducted 1.2m coronavirus tests. He warned that residents must adapt to a “Covid normal” and said tougher restrictions may be needed if current rules are not followed.

The city of Melbourne entered a six-week lockdown last week after outbreaks were discovered in multiple postcodes.

“To the minority of people still making very selfish choices, not only is it the wrong thing to do, it’s just not very smart because Victoria police are out there in force and they are not mucking about,” Mr Andrews said.

Rick Nugent, Victoria’s deputy police commissioner, said the force had issued 350 infringement notices to people breaking lockdown restrictions since Thursday. Those caught included people who claimed to be playing Pokemon and a man who refused to leave a KFC restaurant.

Police have also issued infringement notices to 34 people at a party in a short-term rental property and 40 notices have been issued to people visiting massage parlours, he said.


Tourist arrivals to Hong Kong drop by 90% in first half of 2020

Visitors to Hong Kong fell by almost 90 per cent in the first six months of the year as the coronavirus pandemic hit the city’s tourism industry.

A total of 3.5m people visited the Chinese territory in the six months to the end of June, according to figures from the Hong Kong tourism board.

The city’s government has limited entry to residents since March in a bid to limit the spread of coronavirus after the virus took off outside Asia. Arrivals must undergo a 14-day quarantine.

This week, Carrie Lam, chief executive, said those travelling to Hong Kong from high-risk countries must now test negative for coronavirus before boarding flights.

Hong Kong’s tourism industry was already in the doldrums after mainland Chinese visitor numbers dropped in the second half of 2019 following often violent street protests.

In the first half of 2020, the number of mainland Chinese visitors, who make up the bulk of the city’s tourists, fell 90.3 per cent compared to the same period last year. The fall for June was even steeper with a 99.8 per cent fall, compared to June 2019, to just 6,633.


Venezuela imposes ‘radical quarantine’ on capital Caracas

Gideon Long in Bogotá

The Venezuelan government has ordered the capital Caracas and the neighbouring state of Miranda into “Level 1 of radical quarantine” from Wednesday as the number of coronavirus cases continues to rise.

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Venezuela has recorded some of the lowest coronavirus figures in Latin America, despite being in the midst of an acute economic and humanitarian crisis. It has registered just over 10,000 cases and 96 deaths in a country of 28m.

The opposition says Nicolás Maduro’s government is covering up the true extent of the outbreak. New York-based NGO Human Rights Watch has described the official numbers as “absurd”.

The government says there have been 1,079 cases in Caracas and 889 in Miranda.

The country has been in steep economic decline, which has been exacerbated by US sanctions, for years. Some 5m people have fled the country since 2015 creating one of the biggest migrant crises on the planet.


India advises schools to limit online instruction to 2-3 hours a day

Amy Kazmin in New Delhi

The Indian government has advised schools to limit online instruction for children below the age 13 to just two hours a day, and for older students to just three hours a day, as the country starts a new school year with the coronavirus pandemic still raging.

The restrictions, which are advisory in nature but likely to be adopted by many schools, highlight the heavy price that children are paying for authorities’ failure to control the virus.

Yet the inability to safely reopen schools barely figures in public debate as Prime Minister Narendra Modi’s government attempts to persuade citizens that the country has fared far better than many advanced nations in its battle against the virus.

India, with the third-highest confirmed coronavirus burden in the world, now has more than 935,000 known infections, and the recorded daily caseload is steadily rising, hitting new daily records, with nearly 30,000 new cases now being added every day.

India’s new academic year has started in July, but schools remain shuttered as they have been since March, with little indication as to when they reopen. Expensive private schools have returned to online education, however, as they try to limit the disruption to children’s learning.

In the new guidance, New Delhi has warned of the importance of limiting screen time and called on schools to find new methods to teach children. The government is also advocating that parents play a larger role in helping teach children or that local volunteers, neighbours or peers should help parents who are unable to do the job.

India’s education system was already failing to deliver even before the pandemic. Studies have repeatedly shown a large percentage of children, particularly in remote rural areas and crowded urban slums, were failing to master basic foundational skills such as reading and basic maths.

The inability to reopen schools — and the shortage of online devices in many working-class families — is expected to further widen India’s educational divide.

Since March, the Indian government has also advised that children under the age 10 of should not step outside at all.


Central Asian countries fear economic hit as virus cases surge

Max Seddon in Moscow

Central Asian countries that had boasted of their early success fighting the pandemic have reintroduced lockdowns in response to a new surge in coronavirus cases that threatens their economies.

Kazakhstan, the region’s wealthiest nation where gross domestic product per capita has risen sixfold since 2002, according to the World Bank, was one of the first countries worldwide to relax quarantine restrictions in mid-May, when it had 5,100 confirmed cases.

Since then, that number has soared to more than 61,755, forcing President Kassym-Jomart Tokayev to extend a new lockdown until early August on Tuesday.

Neighbouring Uzbekistan, central Asia’s most populous country, also imposed a new lockdown last week after cases topped 10,000, more than double the number a month earlier.

Kyrgyzstan’s capital Bishkek and several other cities have restricted opening times for shops and restaurants while closing most spaces to outdoor gatherings.

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Bank of Japan revises down GDP forecast, holds rates

Robin Harding in Tokyo

The Bank of Japan has kept monetary policy on hold even as it revised down its growth forecasts and warned that risks to economic activity and prices are skewed to the downside.

Growth in the year to March 2021 is now expected to come in at minus 4.7 per cent while prices will fall 0.5 per cent, according to estimates by the BoJ’s nine-member policy board, before a rapid rebound in 2021 and 2022.

The BoJ’s decision to stand fast despite the weak economic outlook suggests it believes it has done all it can for now and is taking comfort from the stability of the yen against the US dollar.

“Japan’s economy has been in an extremely severe situation with the impact of Covid-19 remaining at home and abroad, although economic activity has resumed gradually,” said the central bank


South Korea’s unemployment rate edges lower

Song Jung-a in Seoul

South Korea’s unemployment rate fell slightly in June on the back of the government’s job creation efforts but remained near a decade high as the coronavirus pandemic pummels the country’s job market.

The seasonally-adjusted unemployment rate fell to 4.3 per cent in June from a decade-high of 4.5 per cent in May, according to data from Statistics Korea. The economy, Asia’s fourth-largest, shed 352,000 jobs last month with the retail, lodging and restaurant sector hit hardest.

The government has announced a series of stimulus packages totalling Won277tn ($230.6bn) to battle economic headwinds. On top of that, it announced a $130bn spending plan on Tuesday to create 1.9m jobs by 2025, mostly in the digital technology and green energy sectors.

The country is struggling to contain sporadic outbreaks of the coronavirus amid a rising number of imported cases. The country reported 39 new cases on Wednesday, including 11 local infections, bringing the total caseload to 13,551, according to the Korea Centers for Disease Control and Prevention.


Tokyo raises coronavirus alert level as new cases climb

Robin Harding in Tokyo

The city of Tokyo has raised its coronavirus alert level to the top of a four-point scale as an expert group warned that the virus was spreading in the metropolis.

New cases in the Japanese capital have been above 100 for six days in a row and the positive rate in tests has crept up to 6.2 per cent.

The city’s experts had previously drawn attention to intensive testing on clusters of the disease in nightlife areas, making the rise in case numbers hard to interpret, but they said there were now more cases in different locations and age ranges.

Tokyo governor Yuriko Koike has urged customers to avoid clubs and bars without proper social distancing measures, but so far the government has stuck to its programme for reopening the economy, promoting a new “Go to” campaign to encourage domestic travel with subsidies.


Infected US hairdresser case suggests mask wearing works

Two hairstylists who continued working for days after they caught coronavirus did not appear to pass it on to any of their clients, suggesting that the masks they and their customers wore were effective in stopping the spread of the disease, according to a new study published on Tuesday.

The report from the US Centers for Disease Control and Prevention, said that the first hairdresser developed respiratory symptoms on May 12 and continued to see clients for eight days until testing positive for the virus.

The second stylist developed symptoms on May 15 and stopped working the day the first stylist tested positive. A test later confirmed the second stylist, who had had unmasked time with the second one during breaks between clients, was also infected.

By the time they stopped working, they had seen 139 clients between them and had worked with other hairdressers in the salon.

However, after two weeks of self-quarantine, none of the clients reported either symptoms or positive tests, suggesting that the salon’s requirement that all hairdressers and their clients wear facemasks was effective.

While working, the first stylist wore a double-layered cloth face mask and the second alternated between wearing either a similar cloth face mask or a surgical face mask.

Health authorities were able to interview 104 clients of whom 98 per cent said they had worn a face covering for the entire appointment, while two people said they wore face coverings only part of the time.

Six close contacts of the hairdressers from outside work were also identified. The four who were close contacts of the first hairdresser all developed symptoms and tested positive, while none of the two close contacts of the second developed any symptoms.

The CDC notes that asymptomatic cases might have been missed because only half of the clients agreed to be tested and the tests were offered five days after exposure, which might have meant that some clients could have been presymptomatic. However, none reported suffering any symptoms in the follow up interviews.


UK inflation rate inches up in June from four-year low

Bethan Staton

Rising prices for games and clothing meant UK consumer price inflation rose slightly in June after falling to its lowest level in four years, as the economy begins to reopen after months of coronavirus lockdown.

Consumer price inflation rose to 0.6 per cent year-on-year in June, data from the Office for National Statistics released on Wednesday showed, a slight increase from 0.5 per cent in May. Economists polled by Bloomberg had forecast a dip to 0.4 per cent.

Rising prices for clothes and footwear and in recreational and culture activities such as computer games drove up the rate of inflation, but it was offset by falling costs of food, hotels and restaurants.

The nationwide shutdown imposed to prevent the spread of coronavirus has sent inflation plummeting, from 1.5 per cent in March to 0.8 per cent in April. The Bank of England’s target is 2 per cent.

With wage growth forecast to remain low in a slowly reopening economy, and many businesses dropping prices to attract customers, economists have forecast that inflation is likely to fall further and some have predicted a near-zero rate in the coming months.

Gross domestic product rose 1.8 per cent in May month-on-month, but the UK economy was still 24.5 per cent smaller than in February, figures released on Tuesday show. Economists had forecast a significantly sharper rebound in GDP in May.


Burberry warns of lingering Covid-19 impact as sales tumble

British luxury fashion group Burberry has said it sees no immediate end to disruption to its business from coronavirus, as the pandemic crimps activity in its stores and tourism remains muted.

In a trading update, Burberry said:

In retail, tourist flows are likely to remain negligible, and store operations are continuing to face significant headwinds, with some remaining closed and operating with reduced trading hours.

The group forecast that retail sales in the quarter to September would be as much as 20 per cent lower than the same time last year. In its wholesale business, revenues in the first half of the year were running around 50 per cent lower than a year ago.

In the 13 weeks to June 27, Burberry’s same-store retail revenues fell 45 per cent on the equivalent period in 2019.

Burberry, whose business model relies on wealthy tourists visiting its European stores, said that lockdown measures in Europe meant sales fell 75 per cent on a year ago in the quarter.

Revenues in the US fell by 70 per cent, although Burberry said trading was now improving after some lockdown measures eased.

Chief executive Marco Gobetti said that, despite such declines, consumer response to Burberry’s latest collections had been “excellent”, particularly with new, younger customers.


European markets set to open higher after vaccine trial result

European stock futures pointed to a buoyant start to trading, with the continent’s markets set to follow most Asian bourses higher.

Futures for the continent-wide Stoxx 600 composite were up 1.2 per cent, while the UK benchmark FTSE 100 futures rose 1 per cent. London trading was largely unmoved by a slightly better than expected reading of a 0.6 per cent rise in UK consumer prices.

The positive mood took hold across Asia following encouraging results from an early Covid-19 vaccine trial by US biotech company Moderna. China’s markets were an exception to the upbeat day after President Donald Trump signed legislation rescinding Hong Kong’s special trade privileges with the US and clearing the way for sanctions on Chinese officials.

S&P 500 futures also edged 0.8 per cent higher. The Wall Street benchmark ended Tuesday trading up 1.3 per cent on hopes of further stimulus from the Federal Reserve, despite another record day for Covid-19 cases and grim start to the second quarter earnings season.


UK corporate news round-up: Asos, Burberry, Dixons Carphone

Online fashion retailer Asos predicts pre-tax profit will hit the top end of market expectations for the year, even with extra costs due to the pandemic, as shoppers scooped up comfortable at-home leisurewear. Group sales increased 10 per cent to £1bn in the four months to the end of June compared with the same period last year. Customers bought more activewear, casualwear and beauty products as they stayed at home instead of formalwear and outdoor clothing.

Luxury fashion group Burberry sees no immediate end to disruption to its business from coronavirus, as the pandemic crimps activity in its stores and tourism remains muted.

Dixons Carphone reported a fall in adjusted pre-tax profit to £166m, from £339m a year earlier, as the electrical and telecoms company’s mobile business experienced a 20 per cent drop in sales with retail stores closing due to the pandemic.

Storage company Big Yellow Group has benefited from increased interest among individuals and businesses since mid-May when the lockdown was eased, although overall activity remained 15 per cent lower in June compared with the year before.

Dunelm Group, the furniture retailer, said that it is taking a “cautious” view on the short to medium-term outlook, as it reported sales declined by more than a quarter in the three months to June relative to the same period a year earlier.


Merck warns over unrealistic expectations for a vaccine

Investors have welcomed any sign of a possible Covid-19 vaccine, with even incremental developments tending to boost equity markets.

The latest news surrounds US biotech Moderna’s potential vaccine, which produced immune responses in patients in its early stage trial, according to results in a peer-reviewed journal.

But traders and fund managers have paid less attention to a stark warning over unrealistic expectations from within the pharma industry itself this week.
Merck chief executive Ken Frazier said:

I think when people tell the public that there’s going to be a vaccine by the end of 2020, they do a grave disservice to the public.

The US company describes itself as the leading vaccine producer in the world, and Mr Frazier added: “My view is unless all of us are safe, none of us are safe.”

What worries me the most is that the public is so hungry, so desperate to go back to normalcy, that they are pushing us to move things faster and faster. But ultimately, if you’re going to use a vaccine in billions of people, you better know what that vaccine does.

It is not the first time he has spoken out. In May Mr Frazier told the FT that a 12 to 18-month timeframe to develop an effective coronavirus vaccine was “very aggressive”.


Vaccine hopes lift global markets

Global stocks rallied as encouraging results for an experimental Covid-19 vaccine and hopes of further stimulus for pandemic-hit economies outweighed escalating US-China tensions over Hong Kong.

The announcement from US biotech group Moderna that its vaccine had produced an immune response in a small, early stage trial lifted markets.

European equities continued the rally on Wall Street and much of Asia with the continent-wide Stoxx 600 and the UK benchmark FTSE 100 both rising about 0.8 per cent.

Jim Reid, analyst at Deutsche Bank, said the Moderna announcement had raised “hopes that the vaccine may be within sight”, despite noting the significant side effects experienced by some patients in the study.

Chinese stocks proved an exception to the upbeat trading picture. Mainland and Hong Kong markets slipped after President Donald Trump signed legislation rescinding the city’s special trade privileges with the US and clearing the way for sanctions on Chinese officials.

S&P 500 stock futures were 0.7 per cent higher on Wednesday ahead of another day of second-quarter earnings announcements. Investors appeared to have largely priced in the grim picture for corporate profits, which are expected to fall by the most since 2008. The Wall Street benchmark ended Tuesday 1.3 per cent higher after several Federal Reserve officials signalled that more economic support may be forthcoming.


UK Covid-19 round-up: no masks in offices, council tightens measures

Matt Hancock ruled out recommending face masks in offices, after the government made a U-turn on requiring masks to be worn in all shops in England.

The health secretary said it would not become mandatory for office workers to cover up their nose and mouth, despite reports suggesting that the UK government was preparing to announce the measure.

Epidemiologists say that evidence suggests masks help prevent the spread of Covid-19 and mitigate the virus load received when close to an infected person.

David Lloyd, a doctor operating in north west London, said on Sky News that “if you’ve got poor air circulation, you should be wearing a mask”.

The rejection of the move came as a borough in northwest England put five measures in place including wearing masks in all public places to stem a rise in coronavirus cases and avoid a strict local lockdown.

Blackburn with Darwen also decided to limit outside visitors to households to two people, ramp up testing, inspect and advise on social distancing in corner shops and replace handshakes and hugs with elbow bumps as greetings.

Dominic Harrison, director of public health for Blackburn with Darwen council, said on BBC Radio 4 that:

We have what we call a rising tide event rather than an outbreak. By that we mean that we have a number of cases rising in specific areas across a significant community but not a single big outbreak.

The area had 114 cases in the past two weeks, of which 85 per cent were south Asian people, who often live in terraced households with more than 4 people. The rise in its rate of confirmed cases to 47 per 100,000, up from 31.6 in the week to July 4, triggered the local response, Prof Harrison said.

If case numbers do not begin to lower within two weeks, then local authorities will reimpose the lockdown measures one by one but it will try to avoid a return of a strict local lockdown as seen in Leicester.


Iran dealing with ‘intense pressure’ of resurgence in Covid-19

Najmeh Bozorgmehr in Tehran

Iran’s president Hassan Rouhani said that “the second wave” of coronavirus infections since last month has proven “more intense” than the first wave.

“Unfortunately, people thought we had completely left behind coronavirus,” Mr Rouhani said in a cabinet meeting on Wednesday. “It is about one month that we are dealing with intense pressure of coronavirus.” He added that he hopes the country will manage the renewed outbreak over the next month as it did during the first surge in infections.

Over the past 24 hours to noon on Wednesday, 199 more deaths were reported, pushing total fatalities up to 13,410. It comes after Iran’s Covid-19 death toll had gone down to around 40 a day in May.

Iran’s health ministry said that 25 out of 31 provinces are currently in an alarming situation. Tehran is in a worse situation with authorities putting some restrictions back in place until at least next week.

Alireza Zali, the doctor leading the capital city’s Covid-19 response, said on Wednesday that Tehran faced “the most complicated situation” compared with other provinces and “not to lose time” in imposing urgent measures.

He said 890 patients were hospitalised in Tehran over the past day alone which equalled the total number of coronavirus patients hospitalised in some of the worst-hit provinces.


Guardian to cut jobs as pandemic takes heavy toll on news industry

Alex Barker in London

The Guardian Media Group is planning to cut 180 jobs, including 70 from its newsroom, as the free-to-read publisher tries to ride out the slump in its revenues after the pandemic.

With its revenues hit by more than 10 per cent, the Guardian’s editor Katharine Viner and chief executive Annette Thomas described the pandemic as leaving the publisher’s finances in an “unsustainable” position that required “decisive action”.

The proposal will mainly seek to reduce staff numbers across the Guardian’s commercial operations. But it will also include around 70 job cuts across the editorial department, a step news publishers have sought to avoid. The Guardian group employs around 1,500 people in total.

Falling advertising revenues and circulation has already prompted far reaching cost-cuts across news media groups based in the UK, including salary reductions for senior staff. A second wave of cuts is now hitting staff numbers. Reach, the publisher of titles including The Daily Mirror and The Daily Express, last week unveiled plans to cut 550 jobs.


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Goldman Sachs profits bolstered by bond trading boom

Laura Noonan in New York

Goldman Sachs defied the coronavirus crisis to earn as much in the second quarter of 2020 as it did a year earlier after a boom in bond trading offset a surge in loan loss provisions and legal charges.

The Wall Street bank, which has been criticised for its continued commitment to fixed income trading since the financial crisis, reported net income of $2.42bn for the year, unchanged from a year earlier. 

Earnings per share for the most recent period were $6.26, far better than the $3.78 expected by analysts, as the bank benefited from a 150 per cent surge in fixed income trading revenues in the second quarter. The same bonanza allowed JPMorgan Chase to almost double its fixed income revenues in the second quarter and drove a 68 per cent rise at Citigroup. 

“The turbulence we have seen in recent months only reinforces our commitment to the strategy we outlined earlier this year to investors,” said David Solomon, chief executive. In January, Mr Solomon detailed a plan to broaden Goldman’s business into new areas such as cash management while maintaining its big trading operation. 

“While the economic outlook remains uncertain, I am confident that we will continue to be the firm of choice for clients around the world who are looking to reshape their businesses and rebuild a more resilient economy.”

The fixed income performance was that division’s best quarterly haul in nine years, delivering revenues of $4.24bn compared with $1.7bn the year before. Goldman said the performance reflected “continued strong client activity in intermediation and financing”.


UK government commits to future inquiry into handling of pandemic

Jim Pickard, chief political correspondent

Boris Johnson has committed the UK government for the first time to an independent inquiry into the handling of the coronavirus pandemic – in a move that heralds intense scrutiny of the decisions made before and during the crisis by ministers and officials.

That pledge goes much further than previous ministerial comments on an inquiry, which have been more vague. By promising an “independent” inquiry Mr Johnson cannot limit the scope of the investigation into an internal, private review.

Speaking in the House of Commons on Wednesday, the prime minister said it would not be right to hold an inquiry immediately.

I do not believe that now in the middle of combating, as we still are, a pandemic is the right moment to devote huge amounts of official time to an inquiry.

But he continued: “Of course we will seek to learn the lessons of this pandemic in the future, and certainly we will have an independent inquiry into what happened.”

Issues that an inquiry is likely to explore will be the UK government’s readiness for the pandemic, its provision of personal protective equipment and the timing of the lockdown – several days after many other comparable European countries.

Earlier on Wednesday the government categorically ruled out the mandatory use of face masks in offices despite new rules that will make them compulsory in shops from July 24.


UnitedHealth earnings boosted as elective payouts drop

UnitedHealth reported a surge in quarterly profits as delayed elective procedures during the coronavirus crisis lowered costs for America’s largest health insurer.

The Minnesota-based company’s profits more than doubled to $6.64bn or $6.91 a share in the second quarter, up from $3.3bn or $3.60 a share in the year ago quarter. Adjusting for one-time items its earnings of $7.12 a share eclipsed analyst expectations for $5.28.

That came as UnitedHealth’s medical care ratio, the portion of premiums collected by insurers that get paid out to medical providers, fell to 70.2 per cent. That compared with consensus for 78.4 per cent and was down from 83.1 per cent in the year ago quarter.

Hospitals began postponing non-essential surgeries as the pandemic picked up in mid-March as they prepared to cope with thousands of coronavirus cases. UnitedHealth said its earnings “were substantially higher than anticipated due primarily to the unprecedented, temporary deferral of care in the company’s risk-based businesses”. However, it cautioned that this would be offset in the coming quarters as these deferred procedures resume and by future “Covid-19 cost and economic impacts”.

The company reported a 2.5 per cent year on year increase in second quarter net revenues to $62.1bn, shy of analysts’ expectations for $63.5bn, according to a Refinitiv survey.

UnitedHealth shares, which are up 5 per cent so far this year, were little changed in pre-market trade.


Bernanke calls on Congress to help to state and local governments

Ben Bernanke, who steered the US Federal Reserve through the financial crisis, has called on Congress to “act decisively” to avoid repeating the mistakes of past crises.

In an opinion piece for the New York Times, Mr Bernanke said that local and state government need help to continue to provide essential services and millions of jobs.

He said that policymakers committed a key error following the 2008-2009 crisis by forcing through state and local budget cuts, which coupled with federal austerity “meaningfully slowed the recovery”.

“We have been here before,” Mr Bernanke wrote, pointing to the stimulus package of nearly $800bn agreed during the financial crisis.

But that package was partly offset by cuts in spending and employment by state and local governments. Like today, with sharp declines in tax revenue as the economy slowed, states and localities were constrained by balanced-budget requirements to make matching cuts in employment and spending. This fiscal headwind contributed to the high unemployment of the Great Recession, which peaked at 10 per cent in late 2009.


US Bancorp beats expectations despite rise in credit loss charges

Regional lender US Bancorp performed better than analysts had feared through the pandemic, despite a sharp fall in net income in the second quarter due to increased credit loss provisions.

Net income at the Minneapolis-based bank was $695m in the three months to June, more than 60 per cent lower than a year earlier but higher than the $490m expected among analysts polled by Reuters.

The company’s loan loss charges for the second quarter soared to $1.7bn, which was $744m higher than the prior three month period. Dramatic downgrades in the outlook for the US economy and higher unemployment due to Covid-19 raised the lender’s expectations for customers becoming unable to repay loans.

“Our second quarter earnings results were reflective of a more challenging economic environment than we have seen in some time,” said Andy Cecere, chief executive of US Bancorp.

The results at America’s fifth-largest commercial bank followed three major Wall Street lenders setting aside $28bn for loan losses and profits at Goldman Sachs remaining unchanged as rapid growth in bond trading offset extra charges.

Shares in US Bancorp rose 3 per cent in pre-market trading.


New York manufacturing activity grows for first time since February

Conditions in the New York manufacturing sector improved this month at their best pace since November 2018, although businesses had a less optimistic outlook than in June.

The New York Fed’s index tracking business conditions for factories in the region climbed for a third straight month to 17.2 in July, turning positive for the first time since February, the month before the start of coronavirus-related shutdowns. The index fell slightly short of a level reading in June at minus-0.2. A reading above zero indicates increased business activity.

Economists had expected the July index to hit a reading of 10, according to Reuters.

The index for future business conditions, which measures the sector’s outlook for the next six months, remained elevated but was down from its multi-year high in June. It fell about 18 points to 38.4, while increases in the sub-indices for employment and capital spending suggested that businesses expect to increase both in the months ahead.

In July, respondents signalled that new orders improved, while employment levels were largely steady after declining a month earlier.


US industrial output improves in June but virus spikes pose challenges

US industrial output jumped for a second consecutive month as states began to reopen; however, a spike in coronavirus cases could impede the recovery.

Industrial production, a gauge of output from factories, mines and utilities, climbed 5.4 per cent in June from the previous month, the Federal Reserve said on Wednesday.

That marked the biggest increase since 2004 and was better than economists’ expectations for a 4.3 per cent increase. However, it remained 10.9 per cent below its pre-pandemic level.

Manufacturing production rose 7.2 per cent in June driven by motor vehicles and parts while factory output elsewhere rose 3.9 per cent.

Meanwhile, output from mining fell 2.9 per cent, while that at utilities rose 4.2 per cent.

Despite June’s rebound the industrial sector experienced its largest quarterly decrease since after the second world war in the second quarter as coronavirus lockdowns and social distancing measures rattled the economy. However, a resurgence in the virus across the US has sparked fears of another hit to the economy. Fed governor Lael Brainard on Tuesday warned that the new spikes in coronavirus infections could lead to a “second dip” in the US economy.


US stocks storm ahead on upbeat vaccine and stimulus expectations

Global stocks extended their gains as encouraging reports from vaccine trials plus hopes of further stimulus for pandemic-hit economies tipped the balance for investors.

US stocks rose for a second day as the S&P 500 index advanced 1.1 per cent at the opening bell on Wall Street. In Europe, equities accelerated an early advance, with the continent-wide Stoxx 600 adding 1.6 per cent to be on track for a third increase in four days. The UK benchmark FTSE 100 climbed 1.8 per cent.

Reports on progress towards an Oxford Covid-19 vaccine added to the upbeat sentiment that was propelled by news from Moderna. Shares in the US biotech group rose 8 per cent in early trading. The company said on Tuesday its experimental vaccine had produced an immune response in a small, early-stage trial.

Jim Reid, analyst at Deutsche Bank, said the Moderna announcement had raised “hopes that the vaccine may be within sight”, despite noting the significant side-effects experienced by some patients in the study. 

Goldman Sachs defied the coronavirus crisis as on Wednesday the US investment bank reported a boom in bond trading to earn as much in the second quarter of 2020 as it did a year earlier. It was day two of the US quarterly earnings season and follows three major US banks’ detailing the $28bn they set aside to cover future loan losses from the pandemic.

In the US, investors appeared to have largely priced in the grim picture for corporate profits, which are expected to fall by the most since 2008.

“The focus is more on what the companies can say in terms of forward guidance,” said Kasper Elmgreen, head of equities at fund manager Amundi. “They are navigating a ship with very low forward visibility and a very wide range of outcomes.”

Conditions in the New York manufacturing industry improved this month at their best pace since November 2018. Businesses though had a less optimistic outlook than in June.

Chinese stocks proved an exception after President Donald Trump signed legislation rescinding Hong Kong’s special trade privileges with the US and clearing the way for sanctions on Chinese officials.


Sunak says UK firms should not expect relief on rising debt burden

Chris Giles

Rishi Sunak has said UK companies should not expect the government to help relieve their growing debt burden in the months ahead and that it is not sensible for the government to take equity stakes in companies.

The chancellor told MPs on Wednesday that corporate balance sheets were in a “healthy state” going into the crisis and the starting point was “pretty positive”. His remarks contrasted with Andrew Bailey, Bank of England governor, who has repeatedly said the high level of corporate debt might undermine the recovery and the public sector should be ready to ensure a response to “the need for equity capital”.

“One thing I’d say is I’m not sure it is sensible for the government to have individual equity stakes in hundreds of thousands of businesses,” Mr Sunak told the Treasury Committee.

The chancellor said he was now concerned only about the recovery and “looking forward” so he would not seek to address those who missed out on government support during the crisis, such as the self employed who operated as companies and paid themselves using dividends.

The chancellor refused to be drawn on whether he would announce deferred tax increases in the autumn Budget, but said people should not assume he was keen on a raid on capital gains tax because he had announced a review of the tax by the Office for Tax Simplification. Tax rises of £60bn or a return to austerity will be needed to restore the UK’s public finances to stability after coronavirus, the Office for Budget Responsibility said on Tuesday, forecasting that government borrowing will reach £370bn this year.

Mr Sunak admitted on Wednesday “there were tough choices ahead” when repeatedly questioned about the possibility of tax rises in the months to come. 


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Florida passes 300,000 coronavirus cases

Peter Wells and Matthew Rocco in New York

Florida has become the third US state to top 300,000 coronavirus cases since the pandemic began after reporting another daily increase of more than 10,000 new cases.

A further 10,181 people were confirmed over the past 24 hours to have tested positive for Covid-19, Florida’s health department said on Wednesday morning, up from an almost week-low of 9,194 yesterday.

That takes the total number of cases in the state since the pandemic began to 301,810. Only longtime hotspot New York, which had just over 403,000 as of Tuesday, and emerging hotspot California, with nearly 337,000 cases, have more. The trio represent about 31 per cent of the total 3.4m confirmed cases throughout the US, according to Financial Times calculations with Covid Tracking Project data.

Florida’s latest number is the fifth time in six days the state has reported a daily increase of more than 10,000 cases, and the 15,300 it reported on July 12 is a one-day record for any US state.

The state reported a further 112 deaths, down from a record increase of 133 on Tuesday and to 4,626 fatalities in total.

The rate of Covid-19 tests that came back positive fell to 13.6 per cent from 15 per cent a day earlier when excluding people who had previously tested positive, state data showed. The latest figures came as local media reports raised questions about whether positivity rates had been inflated because of missing negative test results.

Testing data provided by several labs in the state had been incomplete and in some cases only included positive results, according to a discrepancy first reported by the Fox affiliate in Orlando. In one example, data for Orlando Health indicated its positivity rate was 98 per cent, but the hospital said the figure was only 9.4 per cent. The Florida health department told Fox 35 that some labs had not reported negative results and said it had begun working with labs to ensure all results were disclosed. 

The number of people currently being treated in hospital stood at 8,229 as of Wednesday morning, compared with the 8,197 patients reported about 24 hours earlier, according to the state agency overseeing hospitals. The populous counties of Miami-Dade and neighbouring Broward have seen the most hospitalisations.


Bank of Canada sets forward guidance under new governor

Joshua Oliver in London

The Bank of Canada will keep its rates at rock bottom levels until inflation reaches 2 per cent, as the central bank said it would continue its bond-buying programme and released new projections for the world’s tenth-largest economy.

The bank said it will hold its benchmark rate at the “effective lower bound” of 0.25 per cent until “the 2 per cent inflation target is sustainably achieved”, having cut rates by 1.5 per cent since the pandemic struck the economy in March.

In its first policy update under new governor Tiff Macklem, the bank also signalled a willingness to keep supporting an expansion in government debt not seen since the second world war to fund coronavirus support measures. Justin Trudeau’s government has said it expects to borrow C$343bn this year ($253bn), with the debt-to-GDP ratio rising to 49 per cent.

The bank said it will continue buying Canadian government debt at a rate of at least C$5bn per week “until the recovery is well underway”. It has added around C$100bn in federal government debt to its balance sheet since late March.

“Decisive and necessary fiscal and monetary policy actions” laid the foundation for an economic recovery that is now underway, the bank said. The hit to economic activity in the second quarter came in at 15 per cent, it said, the more favourable end of the range the bank estimated in April.

GDP is expected to drop 7.8 per cent in 2020, the bank estimated in a “central scenario” that assumed no widespread second wave. The bank abandoned its usual economic projection in April citing uncertainty over the course of the pandemic. This month’s modelling assumes Covid-19 “will have largely run its course by mid-2022”. The economy is expected to return to growth in 2021 at 5.1 per cent.

“The bank expects economic slack to persist as the recovery in demand lags that of supply, creating significant disinflationary pressures,” it said, adding that CPI inflation has dropped to near zero and is expected to average 0.6 per cent in 2020.

Demand for the bank’s programme to ease short-term liquidity, launched in March, has declined.


Walmart to require customers in US stores to wear masks

Walmart has become the latest retailer to require customers to wear face masks at its US stores, starting on July 20 as the nation sees a spike in coronavirus cases.

The world’s largest retailer said about 65 per cent of its more than 5,000 stores and Sam’s Clubs are located in areas where the state or local government has mandated the use of face coverings, and it is now acting to “bring consistency across stores and clubs”.

Walmart said all its stores will now have a single entrance manned by so-called health ambassadors — a new employee role — to remind customers without a mask of the retailer’s new requirements. The company said the ambassadors “will work with customers who show up at a store without a face covering to try and find a solution”.

The use of masks has become politicised with some Americans arguing they infringe on their freedom of choice. However, the Centers for Disease Control and Prevention has urged people to wear masks to prevent the spread of Covid-19 that has killed nearly 129,000 Americans, according to the Covid Tracking Project.

Robert Kaplan, president of the Dallas Federal Reserve, said this week that masks are more important to the fate of the US economy than fiscal or monetary policy.

“We know some people have differing opinions on this topic,” Walmart said in a statement. “We also recognise the role we can play to help protect the health and wellbeing of the communities we serve by following the evolving guidance of health officials like the CDC.”

Walmart is the latest retailer to require masks at all its stores. Wholesale retailer Costco, electronics retailer Best Buy, Starbucks and American Eagle Outfitters are among the companies that have issued a mask mandate for their customers.


French PM Castex says €40bn of recovery plan is for industry

Victor Mallet in Paris

Some €40bn of France’s new €100bn coronavirus recovery plan will go towards protecting and modernising the country’s industry and reducing dependence on foreign countries, according to Jean Castex, French prime minister.

Mr Castex was giving details in the National Assembly of President Emmanuel Macron’s promise on Tuesday to allocate more money to the national economic recovery from the Covid-19 pandemic.

“We are today too dependent on foreign partners, and insufficiently present in certain strategic sectors,” he said, echoing Mr Macron’s call for more investment at home in high-tech and medical industries.

“We will devote €40bn to changing that. We will reduce the taxes that weigh on production in France, we will develop the technologies of the future at home, we will reduce our carbon footprint, and we will accelerate the digitisation of businesses and the government.”

A further €38bn would be spent this year and next on the country’s generous “partial unemployment” scheme that has been massively deployed to stave off business bankruptcies and job cuts since the coronavirus lockdown, as well as €20bn on environmental measures such as the insulation of buildings and reducing emissions.

The government would also invest an extra €1.5bn on training as part of its drive to limit the inevitable rise of unemployment, Mr Castex said.

Mr Macron and Mr Castex have ruled out tax rises to finance the surge in emergency coronavirus spending, and said all the “Covid-19 debt” would be ringfenced and treated separately from existing public debt.

If EU member states agree on Europe’s €750bn coronavirus economic recovery plan to be discussed at their summit this weekend, France expects to benefit from about €40bn of the proposed €500bn of grant aid to be financed by common EU debt.


Oklahoma governor tests positive for Covid-19

Oklahoma governor Kevin Stitt has become the first US state leader to test positive for coronavirus.

Mr Stitt, who said he was self-isolating at home, made the announcement during a teleconference with local reporters and the state’s interim health commissioner, Lance Frye.

Oklahoma has not ordered a statewide pause or reversal of its reopening plans or issued a mask-wearing mandate, but Oklahoma City mayor David Holt said today he would vote on Friday in favour of a council proposal to introduce a mask ordinance in the state’s capital.

The governor attended Donald Trump’s campaign rally in Tulsa on June 20, which had been accompanied by concerns the event could quicken the spread of the disease through the region. The director of Tulsa county’s health department, Bruce Dart, was quoted this month saying that the rally, as well as protests that accompanied it, “likely contributed” to a rise in cases in the area over subsequent days.

Oklahoma reported a one-day record increase of 993 new coronavirus cases on Tuesday, according to data from Covid Tracking Project, taking the total number of cases in the state since the pandemic began to more than 21,700. There are 546 people currently hospitalised there with the disease, more than at any other time during the crisis, while a total of 428 people have died.

Other US political figures to confirm testing positive for Covid-19 include Atlanta mayor Keisha Bottoms and more than two dozen state officials in Mississippi. Ms Bottoms revealed last Monday she had tested positive, and by the end of the week said Atlanta would roll back its reopening amid a surge in new cases. Mississippi’s lieutenant governor Delbert Hosemann and state speaker Philip Gunn were among 26 state officials to test positive, after members refrained for weeks from following recommendations to wear face masks in the state capitol.

Mississippi governor Tate Reeves subsequently took a coronavirus test, which came back negative, and said he had “limited contact” with the people who were diagnosed.

South Dakota governor Kristi Noem took a test for coronavirus this month that came back negative. She accompanied Mr Trump to Washington aboard Air Force One on July 3, immediately after an Independence Day celebration at Mount Rushmore, but had had close contact at a campaign fundraiser with the girlfriend of the president’s son, who had tested positive for coronavirus.


Alabama issues statewide mask order

Alabama joined a growing number of southern US states and ordered residents to wear a face covering as it confronts a more than 50 per cent increase in coronavirus cases over the past two weeks.

Governor Kay Ivey issued the statewide mask requirement on Wednesday as part of an extended “safer at home” order for Alabama that runs until July 31.

The mask order goes into effect on July 16, requiring individuals to weak a face covering “when in public or close contact with other people”, the governor said in a statement. 

“We are going to need everyone’s help if we are going to slow the spread and turn these trends into a different direction. We are asking everyone to do a better job practising social distancing, personal hygiene and, now, wearing face masks,” Ms Kay said in a message on Twitter.

Alabama’s decision comes hours after Walmart, the biggest US retailer, said its customers would be required to wear a face covering in all of its stores across the country. Companies including  Starbucks and electronics retailer Best Buy have also made wearing a mask mandatory in their stores, applying even to states or regions without such mandates.

A further 1,784 people in Alabama tested positive for Covid-19 over the past 24 hours, the state health department said on Wednesday, among its biggest daily increases on record. That takes the number of confirmed cases in the state to 58,255 since the pandemic began, an increase of about 53 per cent since the end of June.

A single-day record of 47 people died since Tuesday taking the total number of fatalities to 1,183. As of Tuesday, there were 1,353 people currently hospitalised with coronavirus in Alabama, according to Covid Tracking Project data, more than at any other time during the pandemic.

Louisiana was among the latest states to issue a mask mandate, making the decision last Saturday, while Texas took the step on July 2.

Mississippi, which is next to Alabama, on July 10 ordered a mask mandate in 13 of its counties, but governor Tate Reeves has so far rebuffed calls from the state medical association to push for a statewide mandate.

There are no statewide mask mandates in Alabama’s other neighbours – Tennessee, Georgia and Florida – although individual counties in those places have issued their own local orders.


US businesses remain uncertain about outlook after virus spikes

James Politi in Washington

The US economy remained dogged by uncertainty despite a partial rebound from the initial pandemic shock, businesses told the Federal Reserve in recent weeks, as they raised concerns about the impact of new infection surges across the country.

The so-called Beige Book, a report produced by the Fed eight times a year based on its conversations with contacts across its 12 districts, will reinforce fears at the US central bank that America is at best headed for a lengthy and uneven recovery which will require hefty monetary and fiscal support.

“Economic activity increased in almost all districts, but remained well below where it was prior to the Covid-19 pandemic,” the Beige Book, which was released on Wednesday, said. “Outlooks remained highly uncertain, as contacts grappled with how long the Covid-19 pandemic would continue and the magnitude of its economic implications,” it added.

US central bankers have recently warned that the economic rebound, which was stronger than expected in May and the early part of June, was at risk of faltering owing to disease spikes across sunbelt states.

Those worries were most apparent in the report from the Dallas Fed, which covers Texas, which said that “the resurgence of Covid-19 infections, and a pause in the reopening of the district economy were causing concern among contacts”.
According to its own survey of manufacturing and services employers in the state, which has been hit hard by the new virus spikes, 43 per cent were still seeing reduced employment owing to the pandemic, 26 per cent said it would take more than a year to get back to pre-Covid levels and 19 per cent said they do not ever expect employment to get back to normal.

“Many contacts cited challenges in bringing workers back given rising infection rates, quarantined employees, and confirmed positive Covid-19 cases among staff,” the Beige Book said in the section dedicated to the Dallas Fed.

Lael Brainard, a Fed governor, warned this week that the US economy was vulnerable to a “second dip” owing to the resurgence of coronavirus, and Raphael Bostic, the head of the Atlanta Fed, whose region has been hit hard by the new spikes, expressed concerns about a “levelling off” of economic activity last week in an interview with the Financial Times.


Ireland delays reopening of bars amid rise in infections

Arthur Beesley in Dublin

Ireland has deferred the reopening of bars and nightclubs by three weeks until August 10 as a rise in Covid-19 infections spurs fear of a second coronavirus wave.

Some 3,500 pubs that don’t serve food had been preparing to reopen next Monday but they have now been directed to stay closed as the government delays the final phase of the reopening of the economy. The sector closed in March, with the loss of 50,000 jobs, although bars that serve food returned in late-June when restaurants also reopened.

“Today the cabinet agreed that the current public health measures should remain in place,” prime minister Micheál Martin told a news conference on Wednesday evening. “The concern about the rise in the number of cases over recent weeks is very real.”

The move follows advice from health experts. Dublin reported two further coronavirus deaths on Wednesday, taking the total to 1,748. There were 14 new infections, bringing the number over seven days to 145 and the total since Covid-19 struck to 25,683.

Ronan Glynn, acting chief medical officer, said Ireland’s virus reproduction rate has risen again to between 1.2 and 1.8 — above the threshold of 1 which indicates levels at which the Covid-19 increases exponentially.

Citing the rising domestic R number, Mr Martin said the international situation “represents a growing worry” with almost 1.5m cases reported in the last week.

In further efforts to contain the virus, face coverings will be mandatory in retail outlets and no more than 10 people will be allowed on house visits. Dublin continues to advise against non-essential travel and outdoor gatherings are still limited.

Dr Glynn said Ireland is “at a sensitive stage” in the pandemic. “This requires caution and collective effort to hold firm and keep the virus suppressed in the community.”


S&P 500 rises for second day on vaccine optimism

US stocks closed higher after a promising update on the development of a coronavirus vaccine lifted global markets.

The S&P 500 was up 0.9 per cent, its second straight day of gains, led by shares in the industrial sector. The tech-heavy Nasdaq Composite rose 0.6 per cent, and the Dow Jones Industrial Average climbed 0.9 per cent.

Moderna, the US biotech group, announced late on Tuesday that its experimental vaccine had produced an immune response in all 45 individuals participating in an early-stage trial. A rumour of positive developments for the University of Oxford’s vaccine candidate also buoyed stocks.

In Europe, the continent-wide Stoxx 600 ended the day 1.8 per cent higher. London’s FTSE 100 also added 1.8 per cent.

The yield on the 10-year Treasury note was up 0.02 percentage points at 0.633 per cent, as investors moved out of the debt.

Oil traded higher after US data showed a bigger-than-expected decline in crude stockpiles last week. Brent, the international benchmark, gained 2.1 per cent to $43.79 a barrel. West Texas Intermediate settled at $41.20 a barrel, up 2.3 per cent.


US airline stocks take off on vaccine and aid hopes

Claire Bushey in Chicago

US airline stocks rose on Wednesday as investors savoured good news about a potential vaccine and the prospect of additional government funding.

American Airlines jumped 16 per cent to $13.44, followed by a near 15 per cent increase at United Airlines to $36.37. Prices also rose for Delta and Southwest airlines, and for aerospace manufacturer Boeing. The aviation stocks outpaced the S&P 500, which climbed 1 per cent.

The rally came as US biotech company Moderna published results on Tuesday in a peer-reviewed journal saying their vaccine candidate produced antibodies in all the people who participated in a phase one trial. The encouraging results could help restore confidence among potential travellers to return to the skies.

The industry also received a helping hand from Oregon Rep Peter DeFazio and six other lawmakers who urged their Congressional colleagues to offer further financial aid to US airlines, which received a $50bn package in March. They endorsed a plan proposed by aviation unions to extend aid for airline payrolls through to March 31.

When the law passed in March, “there was an expectation that we would see a significant recovery in US aviation by the fall”, Mr DeFazio wrote. “This is no longer the case.”

Thirteen aviation unions argued in a letter on Wednesday that extending the programme through to March 31 would save jobs for workers in a critical sector of the economy, which accounts for 5 per cent of US GDP, and who cannot easily be dismissed and rehired because of industry training requirements.

US politics means they are likely to get their money, said Darryl Genovesi, an analyst at Vertical Research Partners. Lawmakers who voted in March in favour of the aid package said they wanted to support the workers employed at airlines, not bail out the airlines themselves. Yet the October 1 deadline that will trigger mass layoffs is less than five weeks before the presidential election.

“I can’t see these politicians eating crow like that so close to the day they’re standing for election,” he said. “There’s just no way. So I think that they extend the programme.”


California reports near-record one-day jump in cases, deaths

California on Wednesday reported among its biggest one-day increases in both new cases and deaths.

A further 11,126 people tested positive for Covid-19 over the past 24 hours, the state’s health department revealed, up from an almost one-week low of 7,346. Wednesday’s increase ranks as California’s third-biggest single-day increase in cases, according to Financial Times analysis of Covid Tracking Project data.

A further 140 people died from the disease over the past 24 hours, its equal-second-biggest increase and nine short of its July 9 record.


Kroger and Kohl’s follow Walmart with mask requirements for shoppers

Kroger and Kohl’s have become the latest US retailers that will require customers to wear face coverings in their stores.

From July 20, customers shopping in the more than 1,110 Kohl’s department stores in 49 states will be required to wear a mask.

Shoppers at the nearly 2,800 groceries in 35 states operated by Kroger will be required to do the same from July 22.

The decision by the two retailers follows Walmart, which earlier today said it would require masks to be worn at all of its stores and Sam’s Club locations.


US reports more than 65,000 new Covid-19 cases

The US reported its second-biggest one-day jump in coronavirus cases on Wednesday, boosted by near-record increases in infections in California and Florida.

A further 65,106 people tested positive for the disease over the past 24 hours, according to Covid Tracking Project data, up from 62,879 yesterday, and about 1,500 short of the July 10 record.

California (11,126) and Florida (10,181) had the biggest increases. Florida’s increase pushed its cumulative case tally over 300,000 for the first time; only New York and California have had more cases.

The number of confirmed cases in Texas rose 7,307 from a day earlier to a statewide total of 282,365, according to Covid Tracking Project. However, Texas’ health department said officials in the San Antonio area had clarified recent reporting, leading to the removal of 3,484 probable cases from the previous day’s statewide total. That meant Wednesday’s statewide increase was 10,791, according to the Texas health department, which would be a record.

A total of 16 states reported one-day increase of more than 1,000 new cases, the most of any day during the pandemic, according to Financial Times analysis of Covid Tracking Project data.

Only Oklahoma (1,075), where governor Kevin Stitt revealed earlier today he had tested positive for coronavirus, and Montana (144) had record one-day jumps, with the former topping 1,000 for the first time.

A further 855 people died from coronavirus since Tuesday, up from 736, and to the highest level in nearly a week. California (140) and Florida (112) had near-record increases, while Texas (110) reported its biggest one-day jump.