The U.S. death toll from the coronavirus that causes COVID-19 rose above 60,000 on Thursday, as President Donald Trump said he would not extend federal social-distancing guidelines that are set to expire tonight.
Trump’s son-in-law and senior adviser Jared Kushner said he expects the country to be “really rocking again” by July in an interview on Fox News, as the Associated Press reported.
Trump is planning to travel to Arizona next week to hold mass campaign rallies with supporters, against the medical advice of health-care professionals who have cautioned against large gatherings until a vaccine has been developed, a process expected to take a year to 18 months.
“We’re going to start to move around and hopefully in the not-too-distant future, we’ll have some massive rallies and people will be sitting next to each other,” he said, adding that having people spaced out in accordance with social distancing guidelines “wouldn’t look too good.”
Trump railed against a favorite bugbear, China, on Wednesday, telling Reuters that he believes China wants his Democratic opponent Joe Biden to win the November presidential election, to ease the pressure and strained relations between the two caused by his administration’s trade policies, which include tariffs on billions of dollars on Chinese goods.
In an interview, the president also said he is still considering action against China for failing to act quickly to contain the virus and for not spreading the news of its deadly rampage earlier.
South Korea, meanwhile, said it has recorded no new domestic cases of COVID-19 for the first time since the start of the outbreak in January. The Korea Centres for Disease Control and Prevention said it counted just four new cases in the last 24 hours, all of which were imported. The death toll rose by just one, bolstering hopes the country has passed the worst of the crisis.
South Korea has used mass testing and tracing to contain the virus. The country has 10,765 confirmed cases but just 247 deaths.
What are the latest tallies?
There are now 3.22 million cases of COVID-19 globally, according to data aggregated by Johns Hopkins University. The death toll has climbed 228,757. At least 992,592 people have recovered. The U.S. has the highest case toll at 1.04 million and the highest death toll at 61,123.
Spain has the highest number of cases in Europe at 239,639 and 24,543 deaths. Italy has 203,591 cases and 27,682 deaths, the highest number of fatalities in Europe.
France has 166,628 cases and 24,121 deaths. The U.K. has passed Germany with 166,441 cases and 26,166 deaths, the second highest in Europe. Germany has 161,845 cases and just 6,470 deaths.
Turkey has 117,589 cases and 3,081 deaths. Russia has 106,498 cases and 1,073 deaths, while Iran has 94,640 cases and 6, 028 deaths. China, where the disease was first reported late last year, has reported 83,944 cases and 4,637 deaths.
What’s the economy doing?
The latest batch of economic data showed the heavy burden the pandemic is having with the number of Americans seeking jobless benefits climbing by another 3.8 million to bring the tally for the past month and a half to a staggering 30 million, as MarketWatch’s Jeffry Bartash reported.
Senior economist Sal Guatieri of BMO Capital Markets points out that about 19% of the precrisis labor force has applied for benefits. The official jobless rate will be released next week with the Labor Department’s employment report for April.
The biggest increases in the latest week came from New York, the U.S. epicenter of the pandemic, along with Florida, Georgia, California and Texas.
The federal government has boosted aid and loosened eligibility standards to help more Americans whose finances have been crushed by widespread business closures and stay-at-home orders. The extra money is expected to stop the economy from collapsing entirely, but the U.S. is headed for a deep recession that’s likely to last through the early summer.
“Claims may continue to fall over coming weeks but will likely remain high as businesses remain closed and have no choice but to continue to reduce or furlough their workforce,” said Rubeela Farooqi, Chief U.S. economist at High Frequency Economics.
Separately, a measure of business conditions in the Chicago region fell sharply to 35.4 in April, its lowest reading since 2009, according to a report on CNBC. Any reading below 50 indicates worsening conditions. The Chicago PMI is the last of the regional manufacturing indices before the national ISM data is released Friday.
U.S. incomes fell in March but not as much as spending, pushing the savings rate to its highest level in 39 years, the government said Thursday. Income fell 2% in March, with an identical decline in disposable income.
At the same time, spending slumped a record 7.5% last month. The spending data was not a surprise as it was contained in the first-quarter GDP report released Wednesday, which showed consumer spending contracted at a 7.6% annual rate in the first quarter.
In Europe, first-quarter gross domestic product numbers for the eurozone showed a slide of 3.8% from the fourth quarter, suggesting about three years of economic activity have been wiped out. Separately, France reported a 5.8% decline, Spain reported a 5.2% drop and Italy reported a 4.7% decline after also contracting in the fourth quarter.
“The gradual, tentative lockdown exit path laid out by Prime Minister Philippe supports our base case of a shallow recovery,” said François Cabau, an economist at Barclays who forecasts French GDP to drop 11.7% in the second quarter.
France’s government is lifting the lockdown on most shops on May 11, but restaurants, bars and beaches will remain closed. Each phase of the planned emergency from lockdown will last for three weeks, according to French Prime Minister Édouard Philippe.
Germany will allow schools to reopen on May 3 and has made wearing face masks mandatory.
What are the latest medical developments?
After some positive news from Gilead Sciences Inc. on Wednesday and its remdesivir investigational antiviral as a treatment for COVID-19, the New York Times said the drug will be awarded FDA emergency use authorization, although that news has not been confirmed. An emergency use authorization not a full approval, but would allow patients with no other options to receive the drug. Dr. Anthony Fauci, the nation’s leading infectious disease expert, said the data suggest the drug has a “significant positive effect” and that he expects it to become a standard of care.
Gilead GILD, -0.22% will report earnings for its latest quarter after the bell.
Inovio Pharmaceuticals Inc. INO, -8.37%, a biotech with 15 DNA medicine clinical programs in development but no approved products, received another grant from the Coalition for Epidemic Preparedness Innovations, or CEPI, an Oslo-based organization, to help it expend manufacturing of its COVID-19 vaccine candidate.
Plymouth Meeting, Pa.-based Inovio said CEPI has given it $1.3 million to support large-scale manufacturing of INO-4800, the vaccine that is currently in Phase 1 clinical testing in the U.S. That brings the total CEPI has granted it to $17.2 million. The company is working with German contract manufacturer Richter-Helm Biologics GmbH & Co. KG, which already makes its vaccine for HPV. The company is aiming to move to Phase 2/3 efficacy trials this summer.
What are companies saying?
The first-quarter earnings season continued to roll along with numbers from several Dow Jones Industrial Average components, including Microsoft Corp., MSFT, -0.25% which topped $10 billion in net income and beat even pre-virus expectations. Facebook Inc.’s FB, +4.95% numbers showed flat ad trends, but that was enough for investors who sent the stock up about 6% in early trade.
Here’s the latest comments from companies on COVID-19:
• Altria Group Inc. MO, -1.17% beat profit and revenue expectations, as COVID-19-related pantry loading helped boost shipment volumes. Smokable products shipments increased 6.2%, Marlboro shipments grew 6.7% and total cigarette shipments were up 6.1%, while oral tobacco shipments rose 2.8%. Altria is withdrawing its 2020 outlook given uncertainties related to COVID-19, but said its companies have not experienced material disruptions to supply chains or distribution systems.
• American Airlines Group Inc. AAL, -7.83% swung to a net loss of $2.241 billion, or $5.26 a share, in the first quarter, after earnings of $185 million, or 41 cents a share, in the year-earlier period. “Never before has our airline, or our industry, faced such a significant challenge,” Chief Executive Doug Parker said in a statement. Like its rivals, American has been hammered as consumers have stopped flying during the pandemic with many states and regions under strict lockdown regimes to prevent the spread of the illness. “We have moved quickly and aggressively to reduce our costs and bolster our liquidity,” Parker said. The carrier ended the quarter with $6.8 billion in liquidity, and has access to $10.8 billion in financial assistance through the CARES Act. The company said it views its unencumbered assets as having a value of more than $10 billion and expects to pledge some of those as collateral for future financing, including the roughly $4.75 billion secured loan it has applied for under the CARES Act. It expects its second-quarter cash burn to come to about $70 million a day. The airline has taken a series of measures to prepare for the gradual reopening of economies, including new cleaning protocols and ordering team members and passengers to wear face masks. It is extending travel waivers through the end of September.
• Best Buy Co. Inc. BBY, -3.52% will make in-store consultations available by appointment at 200 locations starting in May. “Since each customer’s appointment will have a dedicated sales associate, there will be a limited number of customers in the store at any one time to ensure appropriate social distancing takes place,” Best Buy said in a blog post. Staff will wear gloves and masks, social distancing guidelines must be adhered to, an employee app will be available for daily self-health checks and areas of the store will be sanitized before and after each appointment. Best Buy is also resuming in-home repair and installation service where it’s allowed, Chief Executive Corie Barry said in a letter to customers, with employees following many of these safety measures. Best Buy recently said that it has held on to 70% of its year-over-year sales, with online sales soaring.
• Health insurer Cigna Corp. CI, +1.53% posted better-than-expected first-quarter earnings. In response to the pandemic, the company has waived customer out-of-pocket costs through May 31, including diagnostic testing and office visits or telehealth sessions, it has not requested any money under the CARES Act, it is offering free shipping of supplies, has deployed technicians to telehealth provider MDLIVE, expanded its employee assistance program, launched a furlough package that includes prescription savings and a dental savings card and waived authorizations for hospital transfers, among other measures. Employees are working from home until further notice and have been given emergency time off. U.S. workers with worksite-essential roles have been given a 20% pay bonus.
• Delta Air Lines Inc.’s DAL, -5.72% 2020 Proxy Statement shows Chief Executive Edward Bastian is forgoing all of his base salary for six months, starting April 1, as a result of the “unprecedented challenges” the company is facing amid the pandemic. To put that in context, Bastian’s 2019 base salary of $945,833 represented 5.5% of total compensation of $17.33 million. That’s up from a base of $891,667 and total compensation of $14.98 million in 2018. Bastian’s total compensation in 2019 includes $8.38 million worth of stock awards, $4.13 million worth of option awards and $3.52 million in non-equity incentive plan compensation. Separately, the company said a private placement of 7.00% notes that mature in 2025 attracted double the amount originally expected. The aggregate principal amount of the senior secured notes was $3.5 billion, which was increased from the $1.5 billion that it originally sought. Delta plans to use the proceeds from the offering to support its liquidity positio
• Dunkin’ Brands Group Inc. DNKN, -3.32% profit and revenue that beat expectations, but U.S. same-store sales for the namesake stores fell more than forecast due to the pandemic. The coffee and ice cream U.S. same-store sales fell 2.0%, missing the FactSet consensus for a 1.6% decline, while Baskin-Robbins U.S. same-store sales rose 1.8% to beat expectations of a 3.5% decline. For Dunkin’ stores, same-store sales rose 3.5% for the first 10 weeks of the quarter, then sank 19.4% in the last three weeks. Given the uncertainty of the full COVID-19 impact, the company said it is suspending its dividend program and withdrawing its financial guidance.
• Kraft Heinz Co. KHC, -0.59% beat profit and sales expectations, helped by increased consumer demand related to the COVID-19 pandemic Pricing increased 1.6% and volume/mix rose 4.6 percentage points, as growth in at-home consumption most than offset the negative impact of retail inventory reductions.
• Macy’s Inc. M, -7.24% will open 68 stores on Monday in states where the lockdown rules have been loosened, Chief Executive Jeff Gennette said in an interview with The Wall Street Journal. The stores are in Georgia, South Carolina, Oklahoma, Texas and Tennessee and will operate with reduced hours. Another 50 stores will open by May 11, and all of the retailer’s 775 stores will be back in operation in six weeks. Shoppers can expect a contactless beauty counter, with trials done on a paper diagram, fewer fitting rooms and hand sanitizer at the jewelry counter. Items that have been tried or returned will be held for 24 hours before being placed back on the floor. Workers will also be required to wear masks.
• McDonald’s Corp. MCD, -2.16% missed on profit but beat revenue estimates for the first quarter, even after many of its restaurants were forced to close during the pandemic. Sales were hit by restaurant closures, limited operations and dramatic changes in consumer behavior. About 75% of its restaurants are still open, offering drive-through, delivery and/or takeaway service. In the U.S. 99% of restaurants are open, although with limited menus and hours in some cases. China is 99% open again, although demand has fallen as consumers have not fully returned to their pre-pandemic habits, said the company.
• Molson Coors Beverage Co. TAP, -10.95% earnings were hit by the closures of spaces like sporting stadiums, bars and other “on-premise” venues, swinging to a loss in the first quarter from a profit a year ago. “We currently expect a significant adverse impact, particularly in the second quarter of 2020, to both net sales and profit performance for fiscal year 2020, and, possibly, beyond, due to the resulting closure of the on-premise channel in effectively all of our markets, as well as the anticipated negative impact of the pandemic on the global economy,” the company said. Molson Coors estimates that off-premise sales accounted for 23% of the 2019 tally, 17% in North America and 50% to 55% in Europe. Molson Coors benefited from pantry-loading in March due to COVID-19, but sales were down 14% for the first four weeks in April. Molson Coors took a $50 million charge, including $31.5 million in lost sales, in the first quarter for a voluntary keg relief program that allowed on-premise venue customers to be reimbursed for untapped kegs. Molson Coors is taking money-saving measures like reducing 2020 capital expenditures by $200 million and furloughing certain employees in Europe and across the North American hospitality business.
• Salesforce.com Inc. CRM, +0.68% is canceling its massive Dreamforce conference, as well as other major in-person events through the end of the year due to the pandemic. Events will instead be held virtually, online. The Dreamforce conference in San Francisco annually draws nearly 200,000 people, making it one of the city’s largest business events. The San Francisco-based software company will model its virtual events on how it revamped its World Tour Sydney in March, which turned an 11,000-person event into an online event watched by 80,000 people. Besides Dreamforce, the changes will also apply to Tableau Conference 2020, Tableau Conference Europe, TrailheaDX India and Salesforce3 World Tours.
• Tapestry Inc. TPR, -10.26% swung to a wider-than-expected loss, as 90% of the company’s stores were closed or operating on shortened hours as a result of the pandemic. Coach sales dropped 20% to $772 million but topped expectations of $761 million. Kate Spade sales fell 11% but beat expectations, while Stuart Weitzman sales declined 40% to $51 million to miss expectations. Tapestry is taking further cost-cutting actions, including corporate and retail job cuts, and expects to record charges of $55 million to $70 million in the fourth quarter, primarily for cash severance costs.