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US daily death toll back above 1,000
The US saw the number of new coronavirus deaths jump back above 1,000 on Tuesday as Texas and Florida reported large increases in fatalities.
A further 1,176 people died from coronavirus, according to Covid Tracking Project, up from 519 on Monday. Over the past week, the US has reported an average of 1,049 fatalities a day.
Florida reported a further 247 deaths, 10 shy of its record from last week, while Texas had a further 245 deaths that was among its biggest since the pandemic began.
Over the past 24 hours, 51,568 people tested positive for coronavirus, up from 49,561 on Monday. The US has averaged almost 59,200 new cases a day over the past week, down from a record rate of nearly 66,900 two weeks ago.
Texas (9,167), Florida (5,446) and California (4,526) had the biggest single-day increases in new cases.
Texas reports 245 new Covid-19 deaths
Texas reported on Tuesday one of its biggest daily increases in deaths since the pandemic began, while new cases also hovered at above-average levels.
A further 245 people died from the virus, the state's health department revealed this afternoon. On Monday, Texas reported 179 fatalities, but this essentially spanned two days because the state's Covid-19 dashboard underwent a scheduled upgrade on Sunday.
Over the past week, state health officials have made several changes to how they categorise new cases and new fatalities, leading to some large day-to-day swings between figures. The state has averaged about 198 deaths a day over the past seven days, however.
A further 9,167 people tested positive over the past 24 hours, officials said, compared with a combined 11,529 for the previous two days.
Beyond Meat's revenue jumps despite fall in restaurant sales
Second-quarter revenues jumped 69 per cent at Beyond Meat, the US plant-based meat group, as sales increases at retailers more than offset the fall in fast-food chains and restaurants. The revenues beat consensus forecasts, although net losses rose because of a rise in costs.
Beyond Meat said revenues for the three months to June totalled $113.3m after its retail sales almost tripled to $90m. Food service revenues fell 61 per cent to $6.5m. The company introduced a lower-priced pack at retailers, which cut the price of its burgers from nearly two times that of conventional beef patties to an approximate 20 per cent premium on a per-pound basis. The product reached stores only in the last two weeks of the second quarter, but accounted for 16 points of the year-over-year volume growth in its US retail business.
Net losses were $10.2m compared to $9.4m a year ago. The rise in costs was caused by the need to repackage products bound for food service and redirect them to retailers, an increase in headcount and charitable product donations.
The company said it was unable to give guidance on the rest of the year because of the uncertainty surrounding the pandemic's impact.
But Beyond Meat said that its cheaper packs were continuing to perform well and its international sales were also strong. It added that it achieved 5 per cent household penetration in the US and had strong repeat purchases of nearly 50 per cent.
Ethan Brown, chief executive, noted record net revenues and growth during "a very challenging period" and added: "Similar to our strong pivot from foodservice to retail, we asked ourselves how to best utilise our international plans and presence to continue growth in the midst of the pandemic. Our continued focus on investment and expansion throughout the quarter clearly demonstrates our unwavering commitment to long-term growth."
The shares, which closed at $142.25 on Tuesday, have almost doubles since the start of the year, although they fell back in after-hours trading to $132.
Disney profits knocked by theme park shutdowns
Anna Nicolaou in New York
Disney took a $3.5bn hit to operating income at its theme parks, as the pandemic ground some of the entertainment giant’s most lucrative businesses to a halt.
The company’s quarterly numbers were expected to be ugly, during the three months in which Covid-19 bruised nearly all of Disney’s businesses apart from streaming. Disney has been hit particularly hard, because it has depended on its theme parks and blockbuster movies to deliver profits even as traditional media has declined.
Disney’s total revenues in the June quarter dropped 42 per cent year-over-year to $11.8bn, while adjusted earnings plunged 94 per cent to 8 cents a share. Analysts were looking for sales of $12.4bn and an adjusted loss of 63 cents per share.
The results were weighed down by Disney’s theme parks, where gates around the world were mostly shut. Revenues at the parks unit dropped 85 per cent year-over-year to only $983m in the quarter.
Chief executive Bob Chapek pointed to the one bright spot, Disney's streaming service, which has benefited in the stay-at-home era. As of the end of June, Disney+, the main streaming service, had reached 57.5m subscribers, while Hulu had attracted 35.5m.
Wall Street advances with earnings and stimulus in focus
US stocks rose for a third day running, as investors continued to measure better than expected corporate earnings against dire forecasts because of the pandemic.
The S&P 500 added 0.4 per cent, led higher by the energy sector. The tech-heavy Nasdaq also rose about 0.4 per cent to a fresh record high. The Dow Jones Industrial Average was up 0.6 per cent.
US corporate earnings have largely outpaced lowered expectations for the second quarter, as companies grappled with the pandemic’s economic toll. Beyond earnings season, Wall Street has also been locked into developments in Washington with lawmakers in talks over another round of economic stimulus.
Gold jumped above $2,000 for the first time. Prices were up 2 per cent to $2,017 per troy ounce.
The yield on the 10-year Treasury note fell 0.05 percentage points to 0.509 per cent, as investors moved into the debt. The dollar index was down 0.1 per cent.
California reports fewer than 5,000 new cases for second day running
California reported fewer than 5,000 new cases for the second day running, continuing signs that the spread of the coronavirus may be starting to slow in the most populous US state.
A further 4,526 people tested positive over the past 24 hours, the state government revealed on Tuesday, down from 4,752 a day earlier. These are the smallest daily increases since late June.
Deaths rose by 113 to 9,501 overall, from an increase of 32 reported on Monday. Over the past week, an average of 140 people a day have died, a record rate for the state.
About 36 per cent of new cases in California over the past day were in Los Angeles county, which is the hardest-hit region in the US, while nine people died. About 37 per cent of new fatalities were from Riverside county to the east, home to communities such as Palm Springs, Coachella and Indian Wells.
The most populous states in the US have recently displayed encouraging trends in new cases. Daily infections have risen by less than their peak levels in July, although fatalities have hit record levels. The emerging turnround in California has lagged that of Texas and Florida, though, according to FT analysis of Covid Tracking Project data.
Over the weekend, the seven-day average of cases for the US as a whole fell below its 28-day average for the first time since mid-June. Shorter-term averages below medium- (14-day) and longer-term (28-day) trends suggest the current rate of spread may be slowing.
On July 30, California's seven-day average of cases — which today stood at 7,776 — crossed below its 28-day average for the first time since the pandemic began. That transition lagged Florida and Texas by several days and trailed Arizona — another hotspot among sunbelt states — by about two weeks.
Earlier today, Arizona's health department reported 1,008 new cases, its smallest increase in over a month, and 66 people died.
Ireland blocks the reopening of pubs for a second time
Arthur Beesley in Dublin
Ireland has blocked the reopening of some 3,500 pubs for a second time because of mounting anxiety that rising coronavirus infections could threaten plans to reopen schools later this month.
The government’s priority is to reopen schools that shut in mid-March, days before the pub sector closed with the loss of 50,000 jobs. Although bars that serve food returned in late June when restaurants also returned, non-food establishments have been urging the government to allow the trade to resume since the deferral last month of the first planned reopening on health grounds.
But prime minister Micheál Martin has deferred the reopening next Monday of non-food pubs by another three weeks because of “worrying evidence” about rising transmission.
“I know this will come as a bitter disappointment to many people,” he said on Tuesday evening. “International evidence shows very clearly that pubs and nightclubs reopening too early leads directly and inextricably to increased community transmission.
“That’s the very worst thing that could happen here ... It would be very damaging for our plan to reopen schools safely.”
Dublin reported 45 new cases on Tuesday, bringing the seven-day total to 326 after several weeks in which infections were much lower.
The current five-day moving average for confirmed cases is 45.4, up from 6.4 on June 24. At present the 14-day incidence per 100,000 people is 7.54, up from 2.46 at the end of June. Covid-19 has claimed 1,763 lives in Ireland and the total number of cases stands at 26,253.
Face-covering in shops and shopping centres will be mandatory from August 10, Mr Martin said. Cyprus, Malta, Gibraltar, Monaco and San Marino have also been removed from the travel “green” list of countries where self-isolation is not required for travellers arriving in Ireland.
The limit on the number of people allowed to gather indoors remains unchanged at 50, as does the limit on outdoor gatherings at 200.
Greek chief epidemiologist calls for 'vigilance' as cases rise
Kerin Hope in Athens
Greece’s chief epidemiologist has called for “increased vigilance” after health authorities reported the highest single-day number of coronavirus cases since April 22, when the country was under a strict lockdown.
The public health organisation EODY said 121 confirmed cases were recorded on Tuesday, including clusters linked to a meat processing plant and several wedding receptions across northern Greece.
Prof Sotiris Tsiodras, giving his first TV briefing for two months, said the “R” rate - the average number of new cases generated by one infected person - has risen to 1, from 0.4 last week.
"The situation requires increased vigilance by all. It could quickly get out of hand," he said.
The government last week made it mandatory to wear face masks in shops, banks and offices as well as on public transport and ferries to the islands. Authorities also imposed a ban on customers drinking while standing at beach bars and in night clubs.
The upsurge mainly reflects domestic infections. Tourists entering the country have accounted for less than 30 per cent of confirmed cases over the past month, an EODY official said.
Greece has recorded 4,858 cases and 209 virus deaths since February 27.
New York City health commissioner resigns
Joshua Chaffin in New York
New York City's health commissioner has tendered her resignation, expressing deep disappointment following a tumultuous tenure that included sparring with the police and mayor amid the coronavirus pandemic.
Dr Oxiris Barbot commanded one of the country’s pre-eminent public health departments. But she clashed with Mayor Bill de Blasio over New York City’s response to coronavirus as it became the main hotspot for the pandemic in the US earlier this year.
In a sign of their breach, Mr De Blasio recently handed responsibility for the city’s contract tracing effort to its public hospitals, not the health department that has handled such tasks in the past. In the weeks leading up to that announcement, Dr Barbot was rarely seen at the mayor’s side as he delivered his regular Covid-19 briefings.
In March, as the pandemic was intensifying in the city, details of an ugly feud between Dr Barbot and the police became public. After the chief of police requested 500,000 masks for his officers, she reportedly told him: “I don’t give two rats’ asses about your cops.”
Dr Barbot has since explained that the masks were then in short supply and desperately needed by medical workers. She was forced by the mayor to apologise publicly.
Dr Barbot is to be replaced by Dr Dave Chokshi, a former executive at NYC Health + Hospitals.
Germany partially lifts travel warning for Turkey
Guy Chazan in Berlin
Germany has partially lifted its travel warning for Turkey, imposed at the height of the coronavirus pandemic.
A statement from the government said the warning would be lifted for Antalya, Izmir, Aydin and Mugla, which it said were seeing a "low rate of infection" — about five new infections per 100,000 people in seven days.
The statement said Turkey had developed a special "tourism and hygiene concept" for these four regions, in order to ensure tourists could travel there safely even during the pandemic.
Turkey requires all those returning from Turkey to Germany to show a negative coronavirus test that is not older than 48 hours, regardless of what part of the country they were staying in, and what route they are taking to leave Turkey.
The statement said Berlin would continue to monitor the situation in Turkey, and said its agreement with the authorities in Ankara to drop the travel warning "might be changed if the pandemic framework data change". It said if the situation deteriorates, Berlin might reintroduce the travel warning for the four regions.
"With these agreements, tourism to Turkey can again be allowed where it can be reconciled with the necessary rules on preventing infections," the statement said.
Florida reports near-record jump in deaths
Florida reported one of its biggest one-day jumps in Covid-19 fatalities on record, but the rise in new infections remained relatively subdued following recent weather-related shutdowns of testing sites.
A further 247 Florida residents and non-residents died from coronavirus, the state's health department revealed on Tuesday morning, up from 73 yesterday.
The latest data push the seven-day average of deaths there to a record of about 184, according to Financial Times analysis of Covid Tracking Project data. That continues a recent trend for Florida — and other hotspots such as California and Texas — that have reported record daily jumps in fatalities alongside new infections retreating from peak levels in July.
Over the past 24 hours, a further 5,446 people in the state tested positive, up from 4,752 on Monday. That took the total number of infections in Florida to 497,330.
Late last week, officials announced that many state-run testing sites would be closed because of the approach of tropical storm Isaias towards the coast. Over the past 24 hours, 56,533 tests were conducted, the fewest in at least a fortnight, and about half of the number conducted on Friday.
Of those tests, 10.88 per cent came back positive, up from a multi-week low on Monday of 9.07 per cent.
US factory orders continue to recover
New orders for manufactured goods in the US grew for a second consecutive month in another sign of improvement for the factory sector.
Factory orders rose 6.2 per cent in June versus the prior month, according to Census Bureau figures released on Tuesday. That was better than economists’ forecast for a 5 per cent gain and followed growth of 7.7 per cent in May.
Orders for transportation equipment, including vehicle and aircraft parts, led the gains with a rise of 20.2 per cent. Machinery and furniture orders increased 3 per cent and 7 per cent, respectively.
Shipments were up 9.8 per cent, compared with a 3 per cent gain in May. Inventories were up 0.6 per cent.
Recent data have offered signs of a continued recovery in the US manufacturing sector after a sharp decline in activity during the depths of the coronavirus crisis. A closely watched survey from the Institute for Supply Management indicated on Monday that the sector grew at a faster pace in June to mark back-to-back months of expansion.
The Census Bureau said orders for durable goods — long-lasting items such as washing machines and cars — advanced 7.6 per cent, revised higher from a previously reported 7.3 per cent.
France highly likely to face second wave in months to come, say advisers
David Keohane in Paris
France’s council of scientific advisors has warned that the country is “very probably” about to face a second wave of the Covid-19 pandemic in the coming months.
Infections have climbed back to levels last seen before a strict lockdown started to be lifted in May, prompting the government’s advisers to say that “the situation is controlled but fragile, with a surge in circulation of the virus this summer”.
“It is highly probable that a second epidemic wave will be observed in the fall or next winter,” the council, which is chaired by Jean-François Delfraissy, said on Tuesday.
“The short-term future of the epidemic is in the hands of citizens, in particular through their ability to take on board and respect all barrier measures,” the council added.
More than 30,000 people have died of the virus in France while nearly 3,000 new infections were recorded over the weekend.
The government has intensified its warnings about the rise of infections, urging more vigilance and saying that many of the new cases are in younger people.
France on Friday gave local authorities the power to make mask wearing mandatory in public places in the fight to halt the spread of Covid-19, a measure that towns such as Lille and Biarritz have already put into practice.
Anne Hidalgo, the mayor of Paris, is examining the option to mandate mask wearing outdoors selectively in the capital, the daily Le Monde said on Tuesday.
Booking.com to cut its global workforce by 25%
Online travel reservation company Booking.com plans to reduce its global workforce by a quarter as the travel industry reels from the coronavirus pandemic.
The Amsterdam-based company employs more than 17,000 people and the cut would affect about 4,250 jobs.
"The Covid-19 crisis has devastated the travel industry, and we continue to feel the impact as travel volumes remain significantly reduced," Booking.com said in a statement. "While we have done much to save as many jobs as possible, we believe we must restructure our organisation to match our expectation of the future of travel."
The company said in a filing with the Securities and Exchange Commission that it was in the process of consulting with its works councils and employee representatives and would have more "clarity on the timing, the number of affected employees, financial impact and other aspects of the contemplated cost reduction actions" as the discussions progressed.
Booking.com expects to announce the cuts to employees country by country from next month and to complete the process by the end of the year.
Booking Holdings, the parent company, is due to report second-quarter results after the market closes on Thursday.
Ralph Lauren revenue falls more than feared as pandemic bites
US retailer Ralph Lauren reported a steeper than expected drop in quarterly revenue and warned that its results for the remainder of the year would be "significantly" affected by the pandemic.
The New York-based company known for its preppy Americana said its fiscal first-quarter revenue fell 66* per cent from a year ago to $487m in the three months ending June 27. That missed analysts' expectations for $615m, according to a Refinitiv survey. Shares fell more than 3 per cent in pre-market trading, having already been down 40 per cent year to date.
In North America, revenue fell 77 per cent from a year ago to $165m. Same-store sales, a measure of sales in stores open at least a year and digital sales, fell 64 per cent.
Performance improved on a month-by-month basis across all regions throughout the quarter driven by a 13 per cent rise in like-for-like ecommerce sales. In China, the company expects growth to return to pre-pandemic levels in the current quarter.
The New York-based company reported a net loss of $128m or $1.72 a share, compared with a profit of $117m or $1.47 a share in the same quarter a year ago. Adjusting for one-time items the company reported a loss of $1.82 a share, against analysts' projections of $1.75.
US deparment stores and retailers have struggled to recover from coronavirus lockdowns that began in mid-March and have only gradually eased. The turmoil pushed a number of companies, many that were saddled with too much debt, to file for bankruptcy. Those that had invested in their online and direct-to-consumer business were better positioned to benefit during the upheaval.
Nearly all Ralph Lauren stores have reopened across North America, Europe and Asia, but continue to operate at "limited hours and consumer capacity". However, a resurgence of coronavirus in parts of the US has triggered a fresh wave of concerns for US businesses.
Ralph Lauren, which has suspended future guidance, said it expected results for the current quarter and remainder of the year to be "significantly adversely impacted by the pandemic and prolonged demand recovery".
The company ended the quarter with $2.7bn in cash and investments and $1.9bn in total debt.
*Note: The piece was amended to show revenues fell 66 per cent
Dixons Carphone to cut 800 jobs as it seeks to reduce costs
Dixons Carphone is set to make up to 800 staff redundant as it changes the way its larger stores are run and looks to reduce costs in the wake of the Covid-19 pandemic.
The job cuts will affect staff in its 300 or so Currys stores and come on top of the 3,000 roles axed when the company announced the closure of its 532 standalone Carphone Warehouse stores earlier this year.
The company said the proposals “will make store team management structures leaner and create new roles and ways of working”. It added that there would be more accountability and that store leaders “will work as an integrated team across the stores’ electricals and mobile offerings”.
Previously, the Carphone Warehouse outlets within Currys stores had been managed by separate teams using different IT systems.
Dixons Carphone has reopened all its large UK and Ireland stores following the easing of lockdowns and has stressed that stores still form a key part of its business model, even though online sales soared while the shops were shut.
Poland considers tightening restrictions as infections rise
James Shotter in Warsaw
Poland has recorded its highest daily number of coronavirus cases, fuelling concerns of a Covid-19 resurgence in the central European nation.
The latest 24-hour figure showed 680 new cases of the virus, capping a trend of rising case numbers that has been evident for three weeks, the health ministry said on Tuesday.
Almost a third of new cases (222) were detected in the region of Silesia, where multiple outbreaks have taken place in mines.
The government is considering reintroducing some restrictions to combat the surge.
Spot checks will take place in shops to make sure that people were abiding by the rules and wearing masks, the health minister said on Monday. In total, Poland has recorded 48,149 cases of Covid-19 and 1,738 deaths.
DSM shares hit as Dutch nutrition group reiterates outlook
Shares in DSM fell about 3 per cent in Amsterdam after the nutrition and health science group reiterated the 2020 earnings outlook that it gave at the beginning of the year.
The once state-owned coal-mining group reported a 4 per cent fall in its adjusted net profit to €399m for the first six months of the year as the business took a hit from the pandemic crisis. First-half sales dropped 1 per cent to €4.5bn, it said on Tuesday.
“DSM expects nutrition to deliver at least a mid-single digit increase in adjusted ebitda but given current limited visibility in materials the overall earnings outlook remains suspended,” the group said in a statement on Tuesday.
The Dutch group reiterated the full-year outlook it gave in the first quarter earnings report, which reflected “considerable uncertainty” as to how the Covid-19 crisis was going to evolve.
The group plans a wider overhaul of its business for the second half of the year and aims to deliver annualised recurring cost savings of €25-€30m.
As the coronavirus pandemic tightened its grip on businesses and economies worldwide, DSM said it had made and delivered 2.8m nose swabs, test kit equipment and 390,000 litres of disinfectant in the Netherlands to communities and healthcare workers.
PizzaExpress puts UK unit up for sale, putting 1,100 jobs at risk
Alice Hancock in London
PizzaExpress has put its UK business up for sale and warned of 1,100 job cuts as it takes more drastic action to stave off collapse as a result of the coronavirus crisis.
The 55-year-old Italian pizza chain will close 67 restaurants — 15 per cent of its UK estate — and offload its Chinese business.
The company announced a fresh £144m injection into the business, half of which will be used to refinance debt and the other half to fund the reopening of its 449 UK restaurants.
PizzaExpress was vulnerable coming into the crisis with a debt-laden balance sheet. The casual dining group was carrying £1.1bn in net borrowing — far exceeding estimates of its equity value — with more than half owned by investors in its bonds, its most recent reported figures showed.
As part of the deal announced on Tuesday, PizzaExpress said there would be a “significant deleveraging” of the group’s external debt from £735m to £319m.
EasyJet signals slight pick-up to air travel over fourth quarter
EasyJet generated £7m revenue over a three-month period when few people were flying as governments imposed strict lockdowns and grounded planes in their efforts to staunch the spread of the coronavirus pandemic.
But the low-cost airline has improved its previously dire expectations as it predicts a smaller loss in the fourth quarter compared with the third. Governments across Europe have recently eased their stringent restrictions from the dark days of late March and April.
EasyJet plans to fly about 40 per cent of its planned capacity for the fourth quarter, up from its initially scheduled 30 per cent.
Revenue during the three months to June signals a drop in quarterly revenue from £1.8bn from the same period a year ago as the low-cost airline operated 709 flights, from its 165,656 in the April-June quarter of 2019.
The Covid-19 pandemic has devastated the aviation industry as governments around the world shut down and dozens of planes remained grounded on the tarmac.
A temporary removal of air passenger duty would help support the industry’s recovery, the FTSE 250 group said in its statement on Tuesday, adding that without this the sector would risk long-term damage.
EasyJet, until recently a FTSE 100 company, made a pre-tax loss of £325m in the quarter.
Diageo takes £1.3bn writedown as coronavirus closes drinking venues
The world’s largest spirits maker Diageo has taken a £1.3bn writedown, becoming the latest drinks group to face impairment charges because of coronavirus.
The London-based group, which produces Johnnie Walker whisky, Smirnoff vodka and Guinness, said the non-cash charges related to its businesses in India, Nigeria, Ethiopia and the Windsor whisky brand in South Korea, “reflecting the impact of Covid-19 and challenging trading conditions”.
The closure of drinking venues around the world hit Diageo harder than expected in the year to June, leading to an 8.4 per cent drop in organic net sales, compared with a 7.3 per cent fall expected by analysts.
Ivan Menezes, chief executive, said: “We have taken decisive action through the second half of fiscal 2020, tightly managing our costs, reducing discretionary expenditure and reallocating resources across the group.”
Pre-tax profit dropped 51.8 per cent to £2bn on £11.8bn of net sales, down from £12.9bn the previous year. The company said it had paused its return of capital programme and put in place an additional £2.5bn credit facility to help deal with lower cash flow, but said it would maintain its final dividend at 42.47p a share.
Sales drops were especially acute in some African countries: Nigerian net sales fell 20 per cent, and in South Africa, which has twice banned alcohol sales during the pandemic, net sales were down 25 per cent.
Other alcoholic drinks makers have also taken impairment charges in the pandemic: the world’s largest brewer, AB InBev, took a $2.5bn writedown on the value of its operations last week, relating to the company’s African units acquired with the purchase of rival SABMiller four years ago.
Rival Heineken, meanwhile, wrote down the value of its assets by €550m.
BP halves dividend as Covid-19 turmoil pushes oil major to loss
BP slashed its dividend for the first time since the Deepwater Horizon disaster in 2010 as the UK oil major bolsters its finances after the coronavirus pandemic severely hit the industry.
The company cut the shareholder payout by 50 per cent for the second quarter to 5.25 cents a share, marking a drastic turnround since the start of the year when BP’s confidence about cash generation led it to raise the dividend to 10.50 cents.
The collapse in energy demand triggered by government measures to curb the spread of coronavirus has badly affected the entire energy sector and crippled earnings. Brent crude, which traded at $70 a barrel in early January dropped to below $20 in April. It is hovering at about $44.
In the three months to June 30, underlying replacement cost losses — the measure tracked most closely by analysts — were at $6.7bn against a profit of $2.8bn in the same period last year.
Analysts had forecast a loss of $6.8bn, with the figure including exploration asset write-offs that are not treated as one-off items.
The reported loss tallied at $16.8bn, which is the biggest since the huge charge related to the Gulf of Mexico accident a decade ago.
JDE Peet’s sales knocked as coronavirus prompts café closures
The closure of cafés and restaurants caused by the pandemic hit the newly listed coffee group JDE Peet’s, leading the company to report declining first-half sales in its initial results since listing in Amsterdam in May.
The company, whose brands include Douwe Egberts, Kenco and Peet’s Coffee, said sales dropped 1.1 per cent on an organic basis in the first half of 2020 from a year earlier, as cafés, offices, schools and colleges, airports and stations around the world closed or reduced activity to curb the spread of coronavirus.
The numbers came in below the slight 0.4 per cent rise that analysts had expected, according to a consensus compiled by Jefferies, after the hit to so-called out-of-home venues that account for about a quarter of JDE Peet’s business.
But the company — controlled by JAB Holdings, the private investment group that manages the wealth of Germany’s billionaire Reimann family — said sales of coffee for consumers to drink at home had grown at double-digit rates, helping to compensate.
Casey Keller, chief executive, said: “Our balanced coffee and tea portfolio allowed us to quickly adapt to rapidly changing consumer habits, following the dynamic shift of cups from the away-from-home to the in-home environment.”
He added: “Starting in June, we’ve seen a good recovery in our away-from-home businesses as local markets begin to recover from lockdowns.”
Underlying profit rose 11.9 per cent to €393m on €3.2bn of sales at the group, which is the world’s second-largest coffee roaster by volume after Nestlé and owns the Peet’s chain of coffee stores in the US. It said it had furloughed and temporarily laid off some staff to cut costs.
Global stocks rise after Nasdaq hits a record high
Hudson Lockett in Hong Kong
Global shares followed Wall Street higher after the White House’s U-turn on Microsoft’s proposed takeover of TikTok’s US operations helped push American tech stocks to an all-time peak.
Japan’s benchmark Topix index climbed 1.9 per cent and Australia’s S&P/ASX 200 rose 1.9 per cent in early afternoon Asia-Pacific trading on Tuesday. Hong Kong’s Hang Seng rose 0.8 per cent while China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks was down 0.3 per cent.
Futures markets tipped the S&P 500 to edge up 0.1 per cent when trading on Wall Street begins later in the day. London’s FTSE 100 was expected to fall 0.2 per cent.
The gains for Asia-Pacific equities came after US President Donald Trump dropped his opposition to Microsoft’s proposed acquisition of the American operations of Chinese-owned video app TikTok.
The S&P 500 closed 0.7 per cent higher following Mr Trump’s about-face. Microsoft shares rose 5.6 per cent, helping lift the tech-focused Nasdaq by 1.5 per cent to a record high.
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UN chief says disruption to schooling risks ‘generational catastrophe’
UN chief António Guterres has said the Covid-19 pandemic has created the largest ever disruption to education, risking a generational catastrophe.
Mr Guterres, UN secretary general, said schools in more than 160 countries were closed in July leaving 1bn without formal classes. At least 40m children will have missed out on education in their “critical pre-school year”.
“We already faced a learning crisis before the pandemic,” Mr Guterres said as he launched policy recommendations for governments. “Now we face a generational catastrophe that could waste untold human potential, undermine decades of progress, and exacerbate entrenched inequalities.”
Parents, especially women, faced heavy care burdens at home, he said.
Pupils with learning disabilities or from disadvantaged communities or those in remote regions face the highest risk of being left behind.
More than 250m school-aged children were already out of formal education before the pandemic hit, Mr Guterres said.
He called on governments to get pupils back into schools “once local transmission of Covid-19 is under control” as well as increasing education budgets and for initiatives designed to reach those children at greatest risk of being left behind.
Taiwan’s economy shows signs of growth following sluggish second quarter
Kathrin Hille in Taipei
Taiwan’s manufacturing sector reversed a three-month long contraction in July and growth in the services sector accelerated, pointing to a rebound after the coronavirus pandemic led to the most sluggish quarter in more than four years.
The Taiwan Manufacturing Purchasing Managers’ Index rose by 6.9 percentage points to 54.1 points in July, the first showing above 50, which indicates growth, since March. Meanwhile the Taiwan Non-Manufacturing Index rose to 57.3 in July after returning to positive growth a month earlier.
Business activity, new orders and employment are growing both in manufacturing and services, the cabinet-level National Development Council said.
The new data underpin hopes for a quick turnaround after a contraction in the second quarter slowed Taiwan’s economic growth in the first six months to just 0.4 per cent.
“We maintain our forecast for Taiwan’s real GDP to grow by 0.9 per cent in 2020, as we expect domestic consumption to rebound,” Fitch Solutions said on Tuesday.
Economists surveyed by Bloomberg have a consensus view of 0.7 per cent growth for Taiwan this year.
Taiwan is suffering much less from the pandemic than most other countries because its early successful containment of the virus allowed it to avoid lockdowns.
The government estimated last week that the economy shrank by 0.73 per cent in the second quarter compared to the same period last year, its weakest performance in more than four years. That contraction came after Taiwan effectively cut off of foreign tourism due to virus-induced border closures, which have dealt a blow to private consumption.
Workers slow to return to offices after England relaxes rules
Daniel Thomas in London
Workers were only slowly returning to offices throughout England on Monday after the government relaxed its guidance about working from home during the coronavirus pandemic.
In the centre of London footfall was only 2 per cent higher on Monday compared with last week, according to data collected by the New West End Company, reflecting how the number of office workers and visitors remained subdued. Footfall was 68 per cent lower compared with this time last year.
Boris Johnson last month announced a relaxation of the official guidance put in place at the start of the Covid-19 crisis that many people should work from home if possible, with the change taking effect on Monday.
The prime minister has encouraged employers to bring staff back to their offices, partly because they are seen as crucial to helping struggling hospitality businesses and other service companies in city centres and town high streets.
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Kim Jong Un faces worst downturn on record as virus exacerbates sanctions
Edward White in Wellington
North Korea is heading for one of its worst economic downturns on record in 2020, according to a new estimate, as the coronavirus global pandemic further tests the country already reeling from tough international sanctions on trade.
Fitch Solutions has forecast an 8.5 per cent contraction in annual gross domestic product, in a further a blow for the North Korean economy. According to South Korea’s central bank, the country saw growth of 0.4 per cent in 2019 — its first expansion since sanctions were ramped up in 2017 in response to Kim Jong Un’s nuclear weapons programme.
The forecast, if accurate, would be the worst year on record, according to Bank of Korea data which starts from 1990 and includes falls of 6 and 6.5 per cent in the 1990s when the country was hit by a famine that killed millions of people.
Underpinning Fitch’s estimates are expectations that economic growth in China — Pyongyang’s most important trading partner and ally — will slow to a 30 year low of 2.2. per cent this year.
“We believe that the North’s external sector will face the largest hit this year and this will further weigh on the fortunes of the mining and manufacturing sector. The North Korean authorities could push up construction activities to prop up growth, but with severe uncertainty persisting around the coronavirus and the likely disruptions to raw material supply chains, we believe that this sector too will suffer,” the analysts wrote in a research note.
While North Korean authorities have not confirmed a single case of coronavirus in the country after instituting strict controls on its borders and internal movement in January, there is scepticism among international experts over the veracity of these claims.
And Fitch analysts added that “North Korea’s economic conditions could worsen if a large-scale Covid-19 outbreak emerges domestically”.
International experts urge caution when assessing statistics surrounding North Korea because of a lack of trust in figures released by Pyongyang and Beijing and a lack of foreign access into the country.
Coronavirus crisis fuels rise in UK livestock rustling
Oliver Ralph and Judith Evans in London
Rural crime jumped to an eight-year high last year as criminal gangs stole UK farm equipment to sell overseas.
Figures from insurer NFU Mutual show that rural crime cost the UK £54m in 2019, a 9 per cent rise on the previous year. The insurer warned that this year’s figures would be affected by the coronavirus crisis, which has sparked an increase in livestock rustling and the theft of some types of equipment.
Rebecca Davidson, rural affairs specialist at NFU Mutual, said: “The main driver is organised criminal gangs targeting the countryside. Ten years ago they caught on to the fact that farm machinery is worth tens or hundreds of thousands of pounds and there is a very strong market for it overseas.”
Over the past few weeks, NFU Mutual has recovered a mini-excavator in France and a quad bike in Lithuania, both of which were stolen in the UK.
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Australia’s Victoria increases fines for breaking Covid-19 isolation orders
The Australian state of Victoria has increased the maximum fine for anyone found breaking coronavirus isolation orders to almost A$5,000 ($3,558) after hundreds of people infected with Covid-19 were found to have left their homes.
Daniel Andrews, the state’s premier, said on-the-spot penalties would be increased to $4,957 from $1,652 previously for anyone found to have breached isolation orders.
The increased fine comes after new infections continued to climb even after a six-week lockdown was put in place in Melbourne, forcing the state to further tighten restrictions.
Mr Andrews said that out of more than 3,000 residential visits made by Australian Defence Forces and health officials to people who had tested positive for coronavirus, more than 800 could not be found at home.
A large number of those people claimed they were out exercising when officials knocked, prompting Mr Andrews to instruct that those who had tested positive for the virus would no longer be able to leave their homes for this purpose. They should instead use their gardens for exercise or open a window for fresh air, he added.
“It’s very difficult to enforce [restrictions] if people have a lawful excuse and people are going to use that to try and justify other decisions,” Mr Andrews said.
The penalty is the largest on Victoria’s statute books and repeat offenders could be taken to court where they could be fined A$20,000.
The state reported 439 new cases and 11 new deaths taking the total number of fatalities to 147 on Tuesday.
All of the new deaths were linked to aged care facilities, which now have 1,186 active cases.
“That remains a very challenging setting for us and one that we’re working incredibly closely with the commonwealth government, the private sector, public hospitals, private hospitals,” Mr Andrews said.
Dispute over aid for cities and states slows stimulus talks
Lauren Fedor and Demetri Sevastopulo in Washington and Andrew Edgecliffe-Johnson in New York
Donald Trump accused Democrats of wanting to bail out US cities and states run by their party as the White House and lawmakers failed to bridge differences over the contours of another stimulus package to respond to the pandemic.
Mr Trump said his team was having a “very good discussion” with Nancy Pelosi, the Democratic speaker of the House of Representatives, and Chuck Schumer, the top Senate Democrat.
But he said both sides disagreed over the amount of money Congress should provide to local governments to help them deal with the pandemic and the economic pain it has caused.
“They want to do bailouts of their various Democrat-run states and cities,” he said. “They want a trillion dollars for that . . . They want to do much more than Covid-related. They want to bail out cities and states that have been in trouble for years of bad management — in all cases Democrat-run cities.”
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South Korean consumer prices rise for first time in 3 months
Song Jung-a in Seoul
South Korea’s consumer prices rose for the first time in three months in July, led by increases for fresh foods due to heavy rains, adding to signs of an economic recovery.
Inflation advanced to 0.3 per cent last month from no growth in June and negative readings in May, according to Statistics Korea. However, the figure is far below levels seen in January and February before the coronavirus pandemic hit Asia’s fourth-largest economy.
The country’s inflation rate stood below 1 per cent last year before rising 1.5 per cent in January and 1.1 per cent in February.
The uptick in July suggests that the South Korean economy is bottoming out, although questions remain about the pace of recovery.
Vice finance minister Kim Yong-beom said signs of an economic recovery became clearer in July, citing the “triple growth” of production, consumption and investment in June and as the decline for exports slowed last month.
“The government will mobilise all policy tools to achieve an economic rebound in the third quarter,” Mr Kim told a meeting with senior ministry officials.
The South Korean economy fell into recession in the second quarter in its worst performance in more than two decades as the pandemic pummelled exports and domestic consumption.
The economy shrank by a seasonally-adjusted 3.3 per cent in the April-June period from the previous three months. But the country's exports fell 7 per cent in July, marking the slowest decline in four months, suggesting that an economic recovery is gathering pace.
China reports 30 new Covid-19 cases as Xinjiang outbreak slows
Health authorities in China reported 30 new locally-transmitted cases of Covid-19 as of Monday as new infections in Xinjiang slowed.
Xinjiang, a region in western China that is home to the Uighur ethnic minority, reported 28 new infections, bringing the official number of Covid-19 cases discovered since mid-July to 606.
Officials imposed restrictions on movement in parts of the capital Urumqi and launched mass testing in a bid to control the outbreak.
A separate outbreak in the port city of Dalian, in Liaoning province in China’s north east, recorded two new cases taking its total number of infections since July 22 to 90.
Six imported cases of Covid-19 took China’s overall tally of confirmed cases to 84,464.
Aid groups borrow money from North Korea in coronavirus fight
Edward White in Wellington
Foreign aid groups struggling to protect North Korea from the coronavirus pandemic have been forced to borrow money from the government of dictator Kim Jong Un.
The fallout from international sanctions has disrupted deliveries of medical supplies into the impoverished country and blocked the flow of funding to non-governmental aid organisations.
Experts said the absence of an effective banking channel into North Korea highlighted how US-led sanctions targeting Pyongyang’s nuclear weapons programme were also hindering the work of aid agencies.
“It is a country that can’t cope in the best of times — it has got 40 per cent of its population needing some form of humanitarian support,” said Richard Blewitt, for the International Federation of Red Cross and Red Crescent Societies, one of the affected groups.
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Asia-Pacific equities gain on boost from manufacturing
Stocks in Asia-Pacific rose on Tuesday following global gains in the previous session on evidence that manufacturing was recovering after coronavirus lockdowns were eased.
The Topix in Japan was up 1.5 per cent and the Kospi in Seoul added 1 per cent. The S&P/ASX 200 climbed 1.8 per cent ahead of the Reserve Bank of Australia’s rates decision and retail sales figures.
Surveys of manufacturers in China, Spain, Italy and the US showed signs of recovery in July after suffering a hit from measures designed to stem the spread of the virus.
Overnight, the S&P 500 closed 0.7 per cent higher as mergers and acquisitions activity boosted valuations. The tech-heavy Nasdaq Composite added 1.5 to close at a record high after strong quarterly results from big tech names including Apple and Amazon.
S&P 500 futures were down 0.1 per cent.
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Marathon Petroleum Corp, the US’s biggest independent refiner, reported an adjusted loss of $868m in the first quarter, down from a $1.2bn profit a year ago, as demand for fuel in the world’s largest market remained depressed due to the coronavirus pandemic.
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The Philippine capital is set to reimpose quarantine restrictions to stop the spread of coronavirus on Tuesday, following warnings that the health system is at the point of being overwhelmed by a rise in cases.
US reports fewer than 50,000 new cases for second straight day
Peter Wells in New York
The coronavirus outbreak that forced parts of the US to reverse economic reopening plans has showed signs of dissipating, with the country reporting fewer than 50,000 cases for the second day running.
The latest figures, as well as more limited daily increases in deaths, arrived as Donald Trump said at his regular coronavirus briefing there was “significant progress” in hotspot states such as California, Florida, Texas and Arizona.
A further 49,561 people tested positive for coronavirus over the past 24 hours, according to Covid Tracking Project data, up from 48,694 on Sunday.
Fatalities rose by 519, from 515 on Sunday, but follow a stretch where the country added more than 1,000 deaths daily 11 times in 12 days.
Figures on Monday tend to be lower than other days of the week owing to delays in reporting over the weekend.
California (5,739) reported fewer than 6,000 new cases for the first time since July 6, while Florida (4,752) reported fewer than 5,000 for the first time since June 23. Arizona (1,030) and Georgia (2,258) had their smallest one-day increases in about a month.
Florida's numbers may also be lower because state-run testing sites were closed from Friday owing to the approach of tropical storm Isaias.
The number of tests the state conducted over the past two days were below recent levels.
The storm, which is moving up the Atlantic coast of the US towards North Carolina and South Carolina could cause delays there in coming days, while Maryland's governor said some community-based sites in that state will also be closed.