Coronavirus: US death rate below 500 for first time since March — as it happened

Coronavirus: US death rate below 500 for first time since March — as it happened

US fatalities decline for third straight day

Matthew Rocco in New York

The number of US deaths attributed to coronavirus fell for a third straight day.

Officials reported 656 new fatalities on Sunday, the lowest one-day total in five days, according to data compiled by the Covid Tracking Project. That brought the overall number of deaths to 98,536 since the pandemic began. The Covid Tracking Project does not include non-hospital deaths estimated by New York City, which Johns Hopkins University uses in its count.

Figures for coronavirus cases and fatalities are sometimes lower during the weekend because of delays in data reporting.

There were 23,877 additional confirmed US cases of Covid-19 in the past 24 hours, bringing the total to 1.78m.

Infections were higher compared with the previous day, but the data included a greater number of tests. Out of more than 441,000 tests conducted during the 24-hour period, 5.4 per cent came back positive, down from 5.8 per cent. The average positivity rate over the previous 14 days was 5.6 per cent.

UN delivers humanitarian aid to Venezuela as crisis deepens

Gideon Long in Bogotá

The UN has delivered 12 tonnes of humanitarian aid to Venezuela to help it combat coronavirus.
The shipment included 127,000 water purification tablets, 18 water tanks and 40,000 nutritional support packages.
“These vital supplies will help provide nutrition assistance and access to safe water to thousands of families and will be distributed to health centres and the most vulnerable communities,” said Peter Grohmann, a UN co-ordinator in Venezuela.
This is the second UN aid flight to land in Caracas since the pandemic started. Venezuela is reeling under an acute humanitarian, economic and political crisis, exacerbated by US sanctions.

Leftist President Nicolás Maduro has said the sanctions are preventing him from dealing with the outbreak, although the US points out the measures do not apply to medical and food aid.

The government has reported 1,459 cases of coronavirus and 14 deaths in a country of nearly 30m people. That is the lowest reported per capita death rate in the Western hemisphere with the exception of a few Caribbean islands.

The opposition says the government is covering up the true extent of the outbreak and New York-based NGO Human Rights Watch has dismissed the numbers as “absurd”.

When the virus struck, many observers feared the worst for Venezuela, which has been in crisis for years. One report, published late last year, found it was the least prepared country in the Americas to deal with a pandemic. Many hospitals do not even have soap or water, let alone basic protective clothing.

Many Venezuelans have been queuing for water and petrol, often ignoring calls for social distancing. Others say they cannot afford to stay at home during the lockdown as they have to work to earn money.

Mr Maduro has extended the country’s lockdown until June 12.

Asia-Pacific stocks mixed ahead of manufacturing data

Asia-Pacific equities started a new month mixed after US-China tensions ratcheted higher and ahead of manufacturing data expected to show the effects of the pandemic on the region’s factories.

Japan’s Topix was down 0.1 per cent, Australia’s S&P/ASX 200 dipped 0.3 per cent and the Kospi in Seoul was up 0.4 per cent.

Official figures released over the weekend showed the pace of recovery in China’s manufacturing sector slowed slightly in May. Surveys of manufacturers in Japan, South Korea and south-east Asia released on Monday morning will give a picture of the impact of coronavirus on the region’s factories.

On Friday, the S&P 500 closed 0.5 per cent higher, recovering from a drop of more than 1 per cent after Donald Trump said the US would remove Hong Kong’s special trade privileges following China’s move to impose national security laws on the territory.

S&P 500 futures were down 0.6 per cent as US cities imposed curfews after protests spread across the country in response to the death of George Floyd, an unarmed black man who died after a police officer held him down with a knee to the neck.

News you might have missed

The pace of China’s manufacturing sector recovery slowed in May, illustrating the difficulties the world’s second-largest economy is having in returning to normal as the coronavirus pandemic rolls on.

More than 300 Hong Kong residents who have been stranded in Nepal since the Himalayan country closed its borders in mid-March will return home on Monday, the Hong Kong government said.

Greece will reopen kindergartens and primary schools on Monday, along with all-year hotels, open-air cinemas and public swimming pools in the country’s latest round of lifting lockdown measures imposed on March 11.

Dubai’s Emirates said it would begin making staff redundant as the toll of coronavirus on the aviation industry deepens.

The UK hit its 200,000 a day capacity target for testing, a goal that Boris Johnson had said would be reached by the end of the month, the health department said on Sunday. The tests included 40,000 antibody tests.

Pedro Sánchez, Spain’s prime minister, will go back to parliament this week to try and prolong his government’s crisis powers again in his attempt to avoid a disorderly phase-out of lockdown.

Domestic flights within Saudi Arabia restarted on Sunday, after being suspended since March 21 because of the coronavirus pandemic, authorities said.

South Korean manufacturing decline worsens as exports slump

Edward White in Wellington

South Korea’s manufacturing sector saw its sharpest decline since the global financial crisis last month as the coronavirus pandemic hits demand from the country’s critical exporters, according to an industry gauge.

The IHS Markit purchasing managers index fell to 41.3 in May, a further deterioration from the 50 point marker that separates contraction from expansion and its lowest since early 2009.

“Output and new orders continued to sink at rates not seen since the global financial crisis, which firms suggested were consequences of global and domestic economic weakness. The export component of the survey also showed another unprecedented monthly decline in overseas demand,” said Joe Hayes, an economist at IHS Markit.

The value of South Korea’s exports dropped by almost a quarter in May, at $34.8bn, compared to $45.7bn a year earlier, according to separate data released by the South Korean government on Monday.

The pressure on South Korea’s exporters — which usually account for nearly half of the country’s GDP — comes despite the government in Seoul winning international praise for its handling of the public health crisis.

Still, health officials reported 35 new Covid-19 infections on Monday as new virus clusters in Seoul, the capital, continue to frustrate the government’s plans to fully unwind social distancing measures.

Over recent days officials have decided to slow the staged return to school for some students and restrict access to some public spaces.

The US will deliver 2m doses of hydroxychloroquine to Brazil

The US will deliver 2m doses of the controversial anti-malarial hydroxychloroquine to Brazil for use against coronavirus, the two countries have announced in a joint statement.

The decision follows a warning from the World Health Organization against the potential side effects of using the drug, which has been associated with increased death rates among Covid-19 patients.

However, US President Donald Trump has revealed he is taking it to ward off infection with the virus.

The statement, issued late on Sunday, said the supply of hydroxychloroquine would be used to help defend Brazil’s nurses, doctors and healthcare professionals against the virus. “It will also be used as a therapeutic to treat Brazilians who become infected,” the statement said.

Health authorities have issued statements over the past few weeks saying the drug’s effectiveness is unproven.

A study published in The Lancet on May 22 of more than 96,000 people hospitalised worldwide with Covid-19 showed that patients treated with hydroxychloroquine or related chloroquine drugs had a higher risk of death than those who were not given the medications.

The joint statement on Sunday said the US and Brazil would be conducting their own studies to assess the effectiveness of hydroxychloroquine.

“These trials will help further evaluate the safety and efficacy of HCQ (hydroxychloroquine) for both prophylaxis (or preventive treatment) and the early treatment of the coronavirus,” the statement said.

Hong Kong stocks rise sharply on hopes for US-China relations

Thomas Hale in Hong Kong

Hong Kong’s Hang Seng jumped 3.4 per cent on first day of trading after Donald Trump said he would revoke the city’s special trading status.

On Friday, Wall Street closed higher despite weakness earlier in the day, after President Trump’s comments on China were seen to be less aggressive than expected.

Last week Mike Pompeo, secretary of state, said that the US said it no longer saw Hong Kong as autonomous from China, raising questions over the impact on its role in international trade and financial services.

Relations between the US and China have declined since the start of the coronavirus pandemic after Mr Trump blamed Beijing for failing to take early action to contain the outbreak.

Australian house prices fall, but transaction activity rebounds

Jamie Smyth in Sydney

Australian house prices fell for the first time in a year in May as the coronavirus crisis dented the economy and pushed an estimated 3m people onto government wage-support schemes.

Property values across state and territory capitals fell by 0.5 per cent in May, the first monthly decline since June 2019, according to CoreLogic, a research company. House prices in the two biggest cities, Melbourne and Sydney, recorded falls of 0.9 and 0.4 per cent respectively, while the national index fell by 0.4 per cent.

However, the price declines were lower than some analysts had anticipated and transaction activity rebounded towards the end of May, as social-distancing restrictions were eased in some states due to Australia’s success in suppressing the spread of Covid-19.

CoreLogic said sales activity bounced back strongly last month with weekly auction clearance rates rising from 30.2 per cent in late April to 62.7 per cent in the week ending May 24.

“Considering the weak economic conditions associated with the pandemic, a fall of less than half a per cent in housing values over the month shows the market has remained resilient to a material correction,” said Tim Lawless, Corelogic head of research. “With restrictive policies being progressively lifted or relaxed, the downwards trajectory of housing values could be milder than first expected.”

Australia’s capital city house prices have surged 10 per cent over the past year due to record-low interest rates and looser lending criteria applied by banks. But analysts have predicted house prices could fall by 10 per cent over the next 12 months with unemployment tipped to hit 10 per cent by the end of June.

Australian banks have already deferred payments on 429,000 mortgages under a scheme that provides people with up to six months’ leeway on home loans.

The government is mulling stimulus measures aimed at supporting the construction industry and housing market, according to the Australian Financial Review. The newspaper said buyers of newly constructed homes could be offered cash grants of at least A$20,000 ($13,450) by the government.

China’s manufacturing sector expands for first time since January

China’s manufacturing expanded in May for the first time since the coronavirus spread across the country, as output jumped, while the global effects of the pandemic weighed on exports, according to a private survey.

The Caixin-Markit purchasing managers’ index nudged higher to 50.7 in May from 49.4 in April. A reading above 50 signifies expansion.

Output rose at the fastest pace since 2011 as measures introduced to limit the spread of the virus were eased and supply chains stabilised. Demand from outside China weakened as countries imposed their own lockdowns to halt the spread of Covid-19.

An official survey of manufacturers for May showed recovery slowed in the world’s second-largest economy. The reading dipped to 50.6 from 50.8 a month earlier.

The Caixin survey covers smaller, private companies, while the official survey examines larger, state-owned businesses.

Japan manufacturing PMI falls to lowest level since 2009

Robin Harding in Tokyo

The true impact of Covid-19 on Japanese industry is becoming apparent after the purchasing managers’ index for manufacturing fell to its lowest level since March 2009 at 38.4.

Declining in line with analyst forecasts, it was the fourth consecutive monthly fall, suggesting that the slump in global demand is now feeding through to an industrial recession in Asia’s largest advanced economy.

The figure is based on a monthly survey of purchasing managers at 400 companies. It records the percentage of managers who say new orders, output and employment are “higher” than the previous month. Figures below 50 indicate weakening activity.

“While Japan has lifted the state of emergency across most parts of the country, making way for a restart of its economy, latest survey data indicated that the manufacturing sector downturn is playing catch-up,” said Joe Hayes, an economist at IHS Markit, which compiles the figures.

South Korea’s Celltrion says Covid-19 treatment shows signs of promise

Song Jung-a in Seoul

Shares of Celltrion, South Korea’s leading biopharmaceutical company, rose more than 7 per cent on Monday after the company said its pre-clinical animal testing showed very positive results with an antiviral antibody treatment for Covid-19.

The treatment also showed improvement in symptoms such as runny nose and cough after the first day of therapy and clearing of lung inflammation within six days, the company said on Monday. Test subjects in a high dose group showed a 100-fold reduction in viral load of the disease.

The preclinical study was conducted in collaboration with one of the country’s national universities and the company hopes to begin clinical trials on humans in July. Celltrion has previously carried out research into an antibody treatment for Middle East Respiratory Syndrome (Mers) and influenza.

“[Celltrion] has the capability to roll out mass production of the therapeutic antibody treatment once it is ready,” Kwon Ki-sung, head of the company’s research and development unit.

Shares of Celltrion climbed 7.26 per cent to Won229,000 on Monday afternoon, outperforming a 1.25 per gain in the benchmark Kospi Composite index.

Global pharmaceutical companies are in a race to develop vaccines and treatments for the widening pandemic that has caused more than 370,000 deaths worldwide, according to research by Johns Hopkins University.

Moderna, a Boston-based biotech company, said last month that the first US Covid-19 vaccine trial had shown positive results, adding that its potential vaccine boosted the immune system of participants to the same or higher levels of protection as patients who had recovered from the disease.

Women-led hedge funds beat male rivals in coronavirus crisis

Laurence Fletcher in London and Hudson Lockett in Hong Kong

The tiny number of hedge funds managed by women have outperformed their male counterparts through the coronavirus crisis, new data show, highlighting the industry’s long-running lack of progress in fixing its gender imbalance.

Hedge funds run by women lost 3.5 per cent in the first four months of this year, as measured by Chicago-based data group HFR’s Women Access index. That beat a 5.5 per cent fall in its HFRI 500 Fund Weighted index, a broader measure of performance that incorporates both men and women-run funds.

“In the round [female managers] appear to have a better approach to managing risk,” said Russell Barlow, global head of alternative investment strategies at investment firm Aberdeen Standard.

While there were examples of very good and poor performance from both men and women-run hedge funds, “the data suggests that there is just a far higher proportion of ‘average’ male-run hedge funds than female”, he added.

Read more here

A revival stalled: coronavirus in America’s rust belt

Patti Waldmeir in Chicago

Attracted by low costs, light traffic and architectural masterpieces left over from when these were boom towns, millennials priced out of markets on either coast moved to old industrial cities.

They opened cafés and bakeries and pop-up restaurants and art galleries, often with start-up incentives they couldn’t obtain elsewhere, creating Midwest cultural and lifestyle hubs in some of the grittiest cities on Earth.

Now that whole process is in jeopardy. Some of the rust-belt cities are among the hardest hit places by the coronavirus pandemic that has killed more than 100,000 people in the US and which is shattering economic optimism and throwing thousands out of work in cities such as Detroit, the original Motor City.

In recent days cities across the US, including Detroit, have faced some of the worst nationwide rioting in decades after protests after police brutality against African-Americans turned violent.

Read more here

Bollywood given permission to restart film production

Benjamin Parkin in New Delhi

Bollywood is set to reopen after local authorities in Mumbai, home to India’s celebrated Hindi-language film industry, gave the go-ahead to resume filming and production of movies and TV shows.

The state government of Maharashtra, where Mumbai is located, said that crews could resume production with restrictions including limited staff, social distancing on set and frequent temperature checks. Scenes where restrictions are harder to enforce — like weddings or fight sequences — will remain prohibited for the time being, according to local media.

India’s film industry, which includes Bollywood and other regional language cinema, is the world’s most prolific with an estimated 2,000 productions a year. It’s also an economic force and large employer, with thousands of daily labourers hired to help build sets.

The other pillar of India’s entertainment industry — cricket — remains in limbo. The lucrative Indian Premier League was due to begin in April but has been postponed indefinitely, even as other sports leagues around the world move to begin restarting.

UK corporate news round-up

The FCA has launched an investigation into whether the creditworthiness assessment process at Amigo Loans was compliant with regulatory requirements, as the embattled subprime lender is engaged in talks about a takeover.

Capital & Counties Properties has agreed to acquire a 26.3 per cent stake in Shaftesbury owned by Hong Kong property magnate Samuel Tak Lee across two tranches for a total of £436m. The deal could pave the way to a potential merger between the two real estate groups that own property in London’s West End and Covent Garden.

Associated British Foods is set to reopen all of its Primark stores in England on June 15 in line with government advice, while it anticipates reopening stores in Wales, Scotland and Northern Ireland in late June.

Ted Baker intends to raise £95m through an equity issue to help it survive the challenging retail environment due to coronavirus, after the fashion group reported pre-tax losses of about £80m in the year to the end of January.

Warburg Pincus, a private equity group, will invest in a £1.8bn tie up between wealth management companies Tilney and Smith & Williamson. The US buyout firm will invest £250m into the deal, according to Sky News.

What you may have missed

Shares of Celltrion, South Korea’s leading biopharmaceutical company, rose more than 6.5 per cent after the company said its pre-clinical animal testing showed very positive results for an antiviral antibody treatment for Covid-19.

Japan and South Korea’s purchasing managers’ index for manufacturing fell to their lowest level last month since the global financial crisis, while manufacturing in China expanded in May for the first time since the outbreak of coronavirus.

UK financial regulators are examining how many listed companies are set to issue warnings about their ability to survive the pandemic. Auditors have warned that there is a backlog of annual reports that are likely to question the ability of companies in the retail, hospitality, leisure and travel industries to continue trading as a going concern for the next 12 months.

Coronavirus has plunged Ireland’s finances back into deficit and pushed swaths of people out of work, sparking fierce political debate about what spending to cut and how large any reductions should be.

The US will deliver 2m doses of the controversial anti-malarial hydroxychloroquine to Brazil for use against coronavirus, the two countries have announced in a joint statement.

Heathrow and Gatwick airports are facing multimillion-pound business rates bills, despite the pandemic having grounded aircraft and sent their incomes plummeting.

Saudi Arabia injects $13bn into banks to prop up financial system

Simeon Kerr in Dubai

Saudi Arabia has injected 50bn riyals ($13.3bn) into banks to shore up the financial sector and help lenders to boost private businesses.

The package marks the second round of monetary assistance since March’s 50bn riyal banking stimulus focused on supporting small and medium sized companies as the kingdom seeks to protect the economy from the toll of coronavirus.

In a statement, the Saudi Arabian Monetary Authority said the move aimed to enhance liquidity, allowing lenders to finance enterprises by restructuring loans without additional fees to help support employment.

Sama said the banking sector was in good health, enabling it to handle “challenges and crises”.

The central bank said lenders’ assets had reached 2.7tn riyals in the first quarter of 2020, up 14 per cent on the previous year. Credit facilities extended to the private sector grew 12 per cent in the same period, the statement said.

Eurozone manufacturing shows signs of easing

The downturn in eurozone manufacturing showed signs of bottoming out in April and easing significantly in May, as factories began to reopen.

The IHS Markit manufacturing purchasing managers’ index for the single-currency bloc hit a two-month high at 39.4 last month as governments relaxed strict regulations but still shows a significant contraction in orders and output.

Italy recorded the strongest rebound in its manufacturing PMI at 45.4 in May, the highest level in three months and up from April’s trough of around 31. Spain’s PMI rose from 30.8 to 38.3, indicating that manufacturing is still suffering.

In the face of a downturn manufacturers, especially in France, Spain and Germany, cut more jobs in May.

“The manufacturing downturn looks to have bottomed out in April, with production falling at a markedly slower rate in May,” said Chris Williamson, chief business economist at IHS Markit.

“The improvement in part merely reflects the comparison against a shockingly steep fall in April, but more encouragingly was also linked to companies restarting work as virus lockdowns were eased.”

Mr Williamson added that the survey brings some hope that Europe’s industrial sector may return to growth in the third quarter.

Car sales in India slide after lockdown

Benjamin Parkin in New Delhi

India’s carmakers reported dramatically lower sales in May as they started reopening from the country’s strict coronavirus lockdown.

Maruti Suzuki, India’s largest carmaker with a market share of about half, said that it sold 13,865 vehicles in May, down 89 per cent from a year earlier. Other automakers such as Toyota and Mahindra also reported sales drops of about 80 per cent or more each.

India, thanks to its enormous population and rising incomes, had previously been on track to become the world’s third largest car market. But even before the virus hit, carmakers faced weaker demand due to an economic slowdown.

The deep hit from the virus now threatens to derail automakers’ prospects much further. India entered a strict lockdown in late March and, while it gradually started reopening in May, economists expect growth to remain subdued for many months to come.

Scania to lay off 5,000 staff as it expects slow recovery in truck demand

Truckmaker Scania plans to cut 5,000 jobs, as the coronavirus crisis has darkened the group’s sales outlook.

The company, which is owned by Volkswagen and employs 51,000 globally, estimates that it has about 10 per cent more staff than it needs. The truckmaker plans to cut 1,000 white-collar positions at its head office and excess staff in sales and the service unit of the business, it added.

“Our assessment is that it will take long before market demand reaches pre-crisis levels and we therefore need to adapt the organisation to the new situation,” said Scania’s chief executive Henrik Henriksson.

The company is seeking to cut other costs through to 2021, including reducing the number of consultants, it said in a statement on Monday.

In March, Scania temporarily laid off almost all its workers in Sweden while its plants in Europe and Latin America stopped operations because of difficulties in obtaining parts from suppliers in Italy, France and Spain.

Property portal records busiest day as potential homeseekers return

George Hammond in London

Rightmove recorded its busiest day as record numbers took to its website to search for properties, indicating signs of interest returning to the UK’s housing market.

The UK property website, which lists houses and flats for sale and rent, had more than 6m visits on May 27, up 18 per cent on the same day last year.

The increase in browsing signals that momentum is building in the market, Rightmove said on Monday.

“The combination of pent-up demand being released, new people entering the market and no half-term holidays during lockdown has led to this late spring boost,” said Rightmove’s housing market analyst Miles Shipside.

However, sales remain about 50 per cent down on the same period in 2019. The government’s intervention to limit the marketing and sale of homes in late March cut transactions to a tenth of normal levels, Rightmove says. The market was reopened on May 12.

The most popular searches were for “areas with beautiful scenery and a potentially quieter life”, such as the south west and north of England, said Mr Shipside.

Zynga pays $1.8bn for Peak as gaming booms during lockdowns

Tim Bradshaw in London

Zynga, the creator of Words with Friends and FarmVille, is making its biggest acquisition to date, paying $1.8bn for Peak Games, at a time when video games are booming under lockdown.

The deal is the latest example of Silicon Valley’s accelerating pace of M&A, as tech companies look to take advantage of market turmoil during the coronavirus pandemic.

Istanbul-based Peak Games, maker of popular puzzle titles Toon Blast and Toy Blast, will add millions of players to Zynga’s portfolio and bolster its position in the lucrative puzzle segment.

Toon Blast, which ranks among the top 10 highest-grossing mobile games, competes with the likes of King’s Candy Crush Saga and Playrix’s Gardenscapes in the so-called “match three” puzzle category.

The acquisition, which is split equally between cash and stock, is Zynga’s largest since it paid $560m for Finland’s Small Giant Games, which makes Empires & Puzzles.

At the same time as announcing the deal, Zynga nudged its full-year revenue guidance up by about 2 per cent to $1.69bn.

Shares in Zynga, which had already jumped by 13 per cent on Friday, were up by as much as 10 per cent in pre-market trading in New York. The move would put Zynga’s shares at $10.10, up by almost two thirds from $6.15 at the start of the year.

Stocks advance after Trump holds back on China retaliation

Global stocks gained while the dollar weakened after US president Donald Trump’s latest escalation of his dispute with China stopped short of traders’ worst fears.

In Europe, the composite Stoxx 600 rose 0.8 per cent. London’s benchmark FTSE 100 and the CAC 40 in Paris added just over 1.2 per cent each. The moves take the Stoxx Europe 600, which lists the region’s largest companies, within sight of three-month highs. Germany was closed for a public holiday.

Mr Trump said, after markets closed in Asia and Europe on Friday, that he would revoke special trade privileges for Hong Kong in retaliation for Beijing’s decision to impose a contentious security law on the former British colony.

But he failed to unveil any specific measures against the financial hub. Analysts said the phase-one trade deal with China appeared safe for now.

US stock futures flipped between minor gains and a decline. Trade recently implied that the S&P 500 would rise 0.07 per cent when Wall Street opens. The US benchmark closed up 0.5 per cent after Mr Trump spoke on Friday.

In Europe, a glimmer of hope flickered as the downturn in eurozone manufacturing activity showed signs last month of easing. The IHS Markit manufacturing purchasing managers’ index for the single-currency bloc hit a two-month high in May as governments relaxed strict regulations, with Italy showing the strongest rebound. The index nevertheless still shows a significant contraction in orders and output.

June promises to be a turbulent month for Brexit and sterling is likely to feel the effects, say analysts at ING. The pound was recently up 0.25 per cent at €1.1145 against Europe’s single currency, with €1 buying 89.68p.

Gilead’s remdesivir trials show improvement to some patients

Hannah Kuchler in New York

Gilead Sciences’ remdesivir helped improve the condition of Covid-19 patients after they took a five-day course of the antiviral, adding to the evidence that the drug could be an important treatment for the disease.

Moderately ill patients who took remdesivir for five days were 65 per cent more likely to have improved clinically by day 11, the California-based biotech said, compared with the group on just the “standard of care”. If patients can be treated with a five day, rather than 10 day course, it could free up supplies for more patients.

Merdad Parsey, chief medical officer at Gilead, said it now has three randomised controlled clinical trials demonstrating that remdesivir improved clinical outcomes by different measures, including time to recovery, and at different levels of severity of the disease. Remdesivir has received approval in Japan, emergency approval in the US, and has been approved for limited use in the UK.

“The additional data we have in hand today will further guide our research efforts, including evaluating treatment earlier in the course of disease, combination studies with other therapies for the most critically ill patients, pediatric studies and the development of alternate formulations,” he said.

UK government defends easing lockdown

Laura Hughes in London

Downing Street has insisted it is “unlikely” easing the lockdown in England on Monday will push the reproduction rate for the virus — the so-called R number — above one.

It comes after the Association of Directors of Public Health warned the latest easing of lockdown measures was “not supported by the science”.

Boris Johnson’s official spokesman said:

We have worked to gradually and safely ease the lockdown measures, the consensus from the scientists is if test and trace is up and running and the public follow the social distancing guidance then it’s unlikely the measures will push the R above one.

The spokesperson conceded the virus “alert level” is still level four on the government’s virus alert system, which denotes “high” transmission of Covid-19.

The Association of Directors of Public Health has warned the NHS test and trace programme is “currently far from being the robust operation that is now urgently required as a safeguard to easing restrictions”.

No 10 accepted “it will take a period of time to get it operationally into its final state”.

Opec and Russia in talks about extending cuts in oil production

Anjli Raval in London

Saudi Arabia-led Opec and Russia are in talks to discuss extending cuts in their output as resource-rich nations seek to stabilise the oil market that has been rattled by the pandemic.

Rather than tapering the cuts from July onwards, delegates are in talks about extending production curbs — which took effect in May — by one to three months, two people briefed on the matter said.

Countries are also discussing moving forward next week’s virtual meeting of ministers from the so-called Opec+ group to June 4, they said.

In April, Opec+ countries agreed to cut production by 9.7m b/d, the largest curbs, putting an end to a price war between some of the world’s biggest producers.
Saudi Arabia and other Gulf nations enacted further voluntary cuts as the drop in the oil price hit government revenues. It is unclear if these additional curbs will also continue.

The pandemic triggered a collapse in oil demand and prices as governments enacted lockdowns and travel bans to limit the spread of the virus. The cuts helped to bolster crude prices, with Brent crude now about $37 a barrel after hitting 18-year lows in recent weeks.

Armenia’s prime minister tests positive for coronavirus

Max Sedddon in New York

The Armenian prime minister has tested positive for coronavirus and, even though he has no “visible symptoms”, he plans to isolate himself in his residence.

Nikol Pashinyan was diagnosed before visiting Armenian military installations, he said in a video on Facebook. His wife and their four children have also tested positive for Covid-19.

The former Soviet republic of about 3m people in the southern Caucasus has reported 9,492 coronavirus cases and 139 deaths. Cases have spiralled since the government began lifting lockdown restrictions in April. Armenians were allowed to return to work on May 10.

Mr Pashinyan said last week the situation was “quite severe” and estimated that the real caseload could be double the official statistics.

Armenia is running out of intensive care beds and businesses violating health guidelines have been shut down, authorities have warned.

Eli Lilly tests Covid-19 medicine based on survivior antibodies

Hannah Kuchler in New York

Eli Lilly has dosed participants in the world’s first trial of treatment based on antibodies from recovered Covid-19 patients.

The US drugmaker is testing the medicine developed in conjunction with AbCellera, a Vancouver-based company, which used its artificial intelligence platform to scour antibodies from the blood of one of the first US coronavirus patients to find those that appeared the most effective.

Patients are already being treated with convalescent plasma – antibodies extracted from recovered Covid-19 sufferers – but this is the first drug-like treatment to be tested based on screening and mass producing antibodies. Eli Lilly has other antibodies it wants to test and other pharma companies including GSK and Amgen are working on similar products.

“We are privileged to help usher in this new era of drug development with the first potential new medicine specifically designed to attack the virus,” said Daniel Skovronsky, Lilly’s chief scientific officer.

“Antibody therapies such as LY-CoV555 may have potential for both prevention and treatment of Covid-19 and may be particularly important for groups hardest hit by the disease such as the elderly and those with compromised immune systems.”

US manufacturing shows signs of stabilisation

The US manufacturing sector contracted for the third consecutive month in May, but activity improved from an 11-year low as states began to gradually reopen from lockdowns.

The Institute for Supply Management said its index measuring factory activity edged up to 43.1 last month, compared with 41.5 in April, which had been the lowest level since April 2009. Economists polled by Thomson Reuters were looking for a stronger reading of 43.6. A reading below 50 indicates contraction.

The report showed that new orders, new export orders, employment and production all contracted in May, but at a slower rate than the month before.

“May appears to be a transition month, as many panellists and their suppliers returned to work late in the month,” said Timothy Fiore, chair of the ISM’s manufacturing business survey committee. “However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders.”

Another data point highlighting that the worst of the economic fallout from the pandemic may be easing came in the form of construction spending, which fell by a smaller than expected 2.9 per cent in April, compared with economists’ expectations for a steeper 6.5 per cent drop.

Putin names date for Russia to vote on constitutional changes

Max Seddon in New York

Russians will next month vote on constitutional changes that could pave the way for President Vladimir Putin to remain in power until 2036.

July 1 was an “entirely appropriate” date for the vote, which was originally scheduled for April 22, Mr Putin said in a videoconference with officials on Monday.

The vote would be spread out over seven days to accommodate social distancing restrictions, while some regions would allow online voting, said Ella Pamfilova, the head of Russia’s election commission.

Election workers and observers would be given personal protective equipment, while voters would be given masks, gloves, and disposable pens, Ms Pamfilova added. “Voting will be safer than going to the shop.”

Mr Putin shocked Russia’s elite when he announced the changes in January as part of a sweeping government overhaul as his approval ratings fell to record lows.

He did not add the provision allowing him to serve two more six-year presidential terms after his fourth and current term expires in 2024 until a highly choreographed session of parliament in March.

Global cases drop to break three-day run of records

Steve Bernard in London

Global coronavirus cases have shown a decline after three days of records while the deaths are lower than the trend has shown recently, as numbers climbed in the US towards 100,000 fatalities.

Newly confirmed Covid-19 cases worldwide rose by 107,759, a slight drop after three consecutive days of all-time highs, peaking at more than 127,000 on Saturday. This brings the total to 6.12m.

A further 2,911 virus-infected patients died on Sunday, significantly lower than the recent trend, totalling 365,840. Post-weekend tolls are usually lower owing to late reporting.

The US toll rose by 656 to a total of 98,387, the second day in succession with fewer than 1,000 deaths, and well down from the peak of more than 2,700 at the end of April. The country recorded 23,877 infections yesterday, the highest daily increase in more than a week, pushing the national total to 1.78m.

Brazil reported a 50 per cent drop in the number of daily cases yesterday, after Saturday’s record of more than 33,000. A further 16,409 infections were confirmed on Sunday, pushing the national total to in excess of half a million. The number of daily deaths reported a similar fall, halving from Saturday’s total of 956 to 480 yesterday.

Explore data about the pandemic with the FT’s Covid-19 trajectory charts.

Moody’s cuts India’s rating to just above junk on low growth prospects

Benjamin Parkin in New Delhi

Moody’s has downgraded India’s credit rating to the lowest investment level as the country faces a prolonged spell of muted economic growth.

The agency cut India’s rating from Baa2 to Baa3, the last remaining investment grade, and maintained the negative outlook that was introduced last year.

Moody’s said the seeds of the downgrade preceded the pandemic, which has worsened conditions that were already present. Once the world’s fastest-growing large economy, India was expanding at the slowest pace in years before the pandemic and was enduring upheaval in its banking and financial system.

“India faces a prolonged period of slower growth relative to the country’s potential, rising debt, further weakening of debt affordability and persistent stress in parts of the financial system, all of which the country’s policymaking institutions will be challenged to mitigate and contain,” Moody’s said.

The move is a blow to the government, which for weeks after implementing a nationwide lockdown in late March held off introducing substantive stimulus measures partly over concern about its credit rating.

Moody’s said it saw longer-term damage to India’s economic prospects.
“Growth rates are likely to be materially lower than in the past,” it said.

Moody’s does not expect that recently announced reform and support measures “will durably restore real gross domestic product growth to rates around 8 per cent, which had seemed within reach just a few years ago”.

Cuomo and de Blasio to discuss possible curfew for New York City

Joshua Chaffin in New York

State governor Andrew Cuomo said he would discuss the possibility of a curfew with New York City mayor Bill de Blasio in order to quell violence and looting that have accompanied protests over the death of George Floyd.

Mr Cuomo also said the National Guard was on standby, if needed. The governor expressed concern that the protests could trigger further outbreaks of coronavirus at a time when New York City was days away from reopening.

“You see these mass gatherings that could probably be infecting hundreds, and hundreds and hundreds of people after everything we’ve done. You have to ask yourself: what are we doing?” Mr Cuomo said.

New York continues to make progress in containing coronavirus. The 50,000 tests it performed over the past 24 hours turned up fewer than a thousand positives cases, indicating that the infection rate was dropping. The daily death toll — once more than 800 — was 54. Yet Mr Cuomo worried that mass protests over Floyd’s death could jeopardise the state’s progress.

Mr Cuomo said he shared the protesters’ outrage and decried the deep-rooted inequality and racism in America. He called for immediate reforms to policing, including “a total ban on choke-holds. Period”. The governor also said officers’ disciplinary records should be made public and allegations of police abuse should not be investigated by local prosecutors because of the potential for conflicts of interest.

Mr Cuomo also took the unusual step of criticising the New York City police. “I think some of the actions of the NYPD have exacerbated the anger,” he said, calling some of the images he had seen “very disturbing”.

Still, Mr Cuomo also worried that violence and looting were undermining the credibility of the protesters and would allow political opponents to portray them as criminals.

“I believe there are people using this moment, using this protest, for their own purposes,” he said. “I believe the protests have been infiltrated by people with their own motives.”

UK’s test and trace system ‘successful’, says health secretary

Laura Hughes in London

The UK’s NHS test and trace system was “up and running” and the government had “more capacity than we need”, the health secretary said.

Matt Hancock did not publish figures on how many people had been tracked and traced since the system was set up on Thursday.

“It’s successful, I’m very glad to report that those who are asked to isolate by the contact tracers are expressing the willingness to do so and we track that very carefully,” Mr Hancock said on Monday at the daily Downing Street briefing.

The level of incidence of disease has come down and so actually we have more capacity than we need. This is a good thing.

I think to err on the side of having too many contact tracers is the right side to err on. I’d rather have too many people trained and ready to go.

Professor John Newton, Public Health England’s director of health improvement, who is in charge of the testing programme, said the system was working “very well”, but admitted that contact tracers “are not fully occupied”.

Mr Hancock said stricter lockdown measures could be reimposed nationally or locally if required.

“We are attempting to move the system from these national, blanket measures to a more targeted approach — this is why test and trace is such an important part of that,” he said.

“But we have always said that we are prepared to reintroduce measures — whether that is nationally or in response to a localised outbreak — if that is necessary.”

All bar three daily coronavirus deaths in UK occur in England

The UK recorded its lowest daily coronavirus death toll in more than two months but almost all were in England.

NHS England reported on Monday that 108 people died in hospital in the latest 24-hour period, bringing the country’s total to 26,722. Scotland and Northern Ireland each reported that one person infected with the virus died overnight.

The daily toll for the UK came to 111 as of 5pm on Sunday, with the total rising to 39,045. That figure, as the country climbs towards 40,000 total deaths, makes the UK the worst-affected in the world after the US.

The peak in the UK was in early April with nearly 1,000 daily deaths registered.

Health secretary Matt Hancock at the Downing Street briefing on Monday said the UK could not ease up on the rules of social distancing or other measures aimed at stifling the spread of the disease, which he said “is not done yet”.

The UK registered 1,570 new cases on Sunday, the lowest figure since the lockdown began on March 23. The total comes to 276,332, making the country the worst in Europe. Worldwide in case count it is behind the US, Brazil and Russia.

Resistance to antibiotics ‘worsened’ by pandemic, says WHO

Anna Gross in London

Antibiotic resistance is one of the “most urgent challenges of our time” and has been worsened by the Covid-19 health crisis, according to the World Health Organisation.

“As we gather more evidence, we see more clearly and more worryingly how fast we are losing critically important antimicrobial medicines all over the world,” said Dr Tedros Adhanom Ghebreyesus, director-general of the WHO, as he released new data collected by 66 countries on resistance to antibiotic treatments.

“These data underscore the importance both of protecting the antimicrobials we have and developing new ones, to effectively treat infections, preserve health gains made in the last century and ensure a secure future.”

Resistance to life-saving drugs was being fuelled by an inappropriate use of antibiotics during the pandemic, WHO scientists said during the daily press briefing on Monday.

Evidence shows that only a small proportion of Covid-19 patients need antibiotics to treat subsequent bacterial infections and the WHO recommends against offering antibiotic therapy or prophylaxis to patients with mild symptoms.

Antibiotic resistance was exacerbated by excess patient prescriptions and the unnecessary use of drugs in agricultural contexts, according to Hanan Balkhy, assistant director-general for antimicrobial resistance at the WHO. We must ensure “we do not replace good hygiene with the overuse of microbials”, she added.

Marriott sees rising occupancy rates in China and US

Marriott is seeing improvement in occupancy rates at its properties in China and the US as lockdowns gradually ease, the hotel chain’s chief executive said on Monday.

In China, where Marriott has reopened all its 350 hotels, the occupancy rate has reached 40 per cent, from a low of about 7 to 8 per cent at the end of January and early February, as leisure and business travel picked up, Arne Sorenson said during a conference hosted by Goldman Sachs.

The occupancy rate in the US has topped 20 per cent at hotels that are open as the hotel operator sees a “steady move forward”, with hotels that are most dependent on “drive-to business” experiencing the strongest performance as domestic and local travel recover faster than overseas travel. He added that this “is a meaningful improvement from where we were before, but it is a long way from where we need to get to”.

Last week, the company said the pandemic had a more “severe and sustained financial impact on Marriott’s business than 9/11 and the 2008 financial crisis, combined” as it announced furloughs, which began in April, would be extended to October 2.

Lockdowns in the US began in mid-March as states issued stay at home orders and closed non-essential businesses as part of an effort to curb the spread of the pandemic, which has killed 98,536 since it began, according to the Covid Tracking Project. However, states have gradually started to reopen as they balance saving lives versus saving livelihoods.

Mr Sorenson added that people are “getting tired of remote work and want to be back”, but that it “may take us a few years to get back to levels we were at before”.

Marriott shares, which were down more than 40 per cent in the year-to-date at Friday’s close, climbed 7 per cent to $94.64.

S&P500 within 10% of peak as US stocks continue rally into June

US stocks began June on the front foot, continuing a weeks-long rally for Wall Street that has left the S&P 500 less than 10 per cent from its record high.

The gains on Monday come against the backdrop of renewed tension between the US and China following Beijing’s move to introduce a contentious new security law in Hong Kong.

Additionally, investors are now also left to weigh the potential impact on the US economy’s reopening and political landscape after thousands took to the streets in numerous cities over the weekend to protest against police brutality after the death of George Floyd in Minneapolis last month.

The S&P 500 closed 0.4 per cent higher, led by cyclical sectors such as energy and banks. That left the benchmark index 9.8 per cent below its February 19 peak.

The Nasdaq Composite added 0.7 per cent, while the small-cap focused Russell 2000 rose more than 1 per cent.

President Donald Trump decided late on Friday to revoke special trade privileges for Hong Kong in response to Beijing’s imposition of the new security law, but the actions by the White House so far have been seen by some analysts as relatively muted, which may have helped ease market nerves.

Government bonds were weaker, with yields rising slightly. The benchmark 10-year Treasury’s yield was up 0.02 percentage points at 0.66 per cent.

Pandemic to slice $15.7tn from US GDP this decade, says CBO

The lasting effects of the pandemic are forecast to wipe out a cumulative $15.7tn of output from the US economy this decade, according to the federal agency tasked with providing budget and economic estimates to lawmakers.

That gap, the Congressional Budget Office said on Monday, represents 5.3 per cent of the value for cumulative nominal gross domestic product over the 2020-30 period that the agency projected in January.

The pandemic has already had a deep impact on the US economy, resulting in a 5 per cent year-on-year contraction in output during the first quarter and more than 40m Americans filing for unemployment benefits.

The CBO said its May report now projects nominal GDP in the June quarter will be $790bn, 14.2 per cent lower than its January forecast, despite government legislation to address fallout from the pandemic.

“Subsequently, the difference between those projections of nominal GDP narrows from $533 billion (9.4 percent lower in the May projection) by the end of 2020 to $181 billion (2.2 percent lower) by 2030,” Phillip Swagel, director of the CBO, wrote in a letter to Chuck Schumer, the top Democrat in the Senate.

The CBO also expects inflation to be weaker as a result of the pandemic, particularly this year and next. The CBO projects cumulative output, adjusted for inflation, by 2030 to be $7.9tn, or 3 per cent less, than what it had projected in January.

US one-day death rate below 500 for the first time since March

America’s one-day death rate dropped below 500 for the first time in just over two months, marking the third straight day it has remained under 1,000.

A further 469 people in the US died from coronavirus over the past 24 hours, according to data from the Covid Tracking Project, the smallest one-day increase since March 29.

In another encouraging sign, the number of new coronavirus cases in New York over the past day was 941, the first time in 11 weeks it has been below 1,000.

California and Texas, which on Sunday had new highs for new cases, “were much lower today”, Covid Tracking Project said. Texas was among the first states in the US to begin the reopening process, while California has more recently begun to ease lockdowns.

Still, New York reported more deaths over the past day – 54 – than any other state and remains the hardest hit US state overall with 23,959 fatalities. Ohio, with 51, and California, with 38, had the next largest one-day increases.

Figures on Monday tend to be lower than other days owing to a slowdown in reporting over the weekend, Covid Tracking Project points out, and there is typically a tick-up in deaths and cases on Tuesday.

Since the pandemic began, 99,005 people in the US have died from coronavirus, according to Covid Tracking Project, which chooses not to count so-called probable deaths. John Hopkins University, which does include those fatalities, puts the national death toll at 104,799.

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