GLOBAL NEWS:
The U.S. coronavirus death toll climbed above 58,000 on Tuesday, surpassing the loss of American life from the Vietnam War, as Florida’s governor met with President Donald Trump to discuss an easing of economic restraints. Florida Governor Ron DeSantis, among the latest to lock down his state against the pandemic, has been weighing whether to join other states in a relaxation of workplace restrictions and stay-at-home orders that have been credited with slowing the contagion but which have battered the economy. DeSantis’ meeting at the White House came as Florida reported its highest single-day death toll from the coronavirus, and two days before Florida’s stay-at-home order was due to expire. Despite a high proportion of elderly residents, who are especially vulnerable to the virus, and having waited until early April to lock down its economy, Florida has averted the worst of the health crisis seen in other states such as New York and New Jersey. Still, Florida would become the most populous of about a dozen states forging ahead with economic reopenings despite a lack of wide-scale virus testing and the means to trace close contacts of newly infected individuals, as recommended in White House guidelines on April 16. While DeSantis’ state has so far been spared the worst of the pandemic, Florida reported a record 83 new deaths and more than 700 new infections from the previous 24 hours on Tuesday. The state has so far tallied 32,846 cases of COVID-19, the disease caused by the virus, including 1,171 deaths. The number of Americans seeking jobless benefits over the past five weeks has soared to 26.5 million - nearly one in six U.S. workers - and the Trump administration has forecast an April unemployment rate exceeding 16%. Confronting a different challenge posed by the pandemic, Trump on Tuesday invoked national defense powers to order meat-processing plants to stay open to ensure a steady food supply, drawing a backlash from union leaders who said at-risk workers need greater protection. Outbreaks among employees of several leading U.S. meatpacking companies - deemed essential businesses during the crisis - have halted operations at about 20 slaughterhouses and processing plants where tight working conditions make it difficult to practice social distancing.
Yum China Holdings Inc on Tuesday beat estimates for quarterly revenue and said the decline in same-store sales was slowing even as the vast majority of consumers still avoid going out in public to contain the spread of the coronavirus. Yum China said its month-to-date same-stores sales were down by more than 10%, still an improvement from the 15% decline it experienced in the first quarter ended March 31. Shares of Yum China, the exclusive licensee of the KFC, Pizza Hut and Taco Bell brands in China, rose 3.3% in extended trading. Digital orders - including delivery, mobile orders and kiosk orders - accounted for 84% of sales at KFC and 65% of sales at Pizza Hut in the first quarter, an increase of 29 and 36 percentage points, respectively, from a year earlier. Total revenue fell to $1.75 billion from $2.30 billion but well ahead of market expectations of $1.56 billion. Net income fell to $62 million, or 16 cents per share, from $222 million, or 57 cents per share, a year earlier. Chief Executive Officer Joey Wat told analysts on a conference call that Pizza Hut was more seriously affected versus KFC due to the former’s larger focus on dine-in. The firm’s third quarter could also be impacted by a planned shortening of the country’s summer school vacation. The rapid spread of the coronavirus prompted restaurants, including McDonald’s Corp and hotpot chain Haidilao International Holding Ltd, to close temporarily or cut working hours to contain the spread of the virus. Yum China said about 99% of its stores in China are either partially or fully open.
Asian shares rose for a third session on the trot on Wednesday as investors took heart from easing coronavirus lockdowns in some parts of the world while oil prices jumped on hopes demand will pick up. Risk assets including equities have rallied for most of this month thanks to heavy doses of fiscal and monetary policy stimulus around the globe aimed at softening the economic blow from the COVID-19 pandemic. Moreover, investors have regained some confidence as parts of the United States, Europe and Australia are gradually easing restrictions while New Zealand this week allowed some businesses to open. These factors helped lift MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS by 0.9% on Wednesday, having rallied 3.3% already this week. Japan’s markets were closed for a public holiday. Australian shares rose 1.2% led by energy and resources firms while South Korea added 1.2%. Darby said the number of stocks above their 260-day moving average was still very low across emerging market and developed market indexes while the number of stocks making new highs versus new lows is about equal. Moody’s expects economies of the group of 20 advanced nations to shrink 5.8% this year with momentum unlikely to recover to pre-coronavirus levels even in 2021. The Dow Jones Industrial Average fell 0.3%, the S&P 500 lost 0.5% and the tech-heavy Nasdaq Composite dropped 1.4%.
The Serum Institute of India said on Tuesday it plans this year to produce up to 60 million doses of a potential vaccine against the new coronavirus that is under clinical trial in Britain. Serum, the world’s largest maker of vaccines by volume, is mass-producing the vaccine candidate developed by the University of Oxford, which started testing it on humans last week, and is a leader in the global race to develop an antidote to the novel coronavirus. Some 3.05 million people have been reported to be infected globally and 211,376 have died from COVID-19, the respiratory disease caused by the coronavirus, according to a Reuters tally. Being a private limited company, not accountable to public investors or bankers, I can take a little risk and sideline some of the other commercial products and projects that I had planned in my existing facility. Poonawalla said he hoped trials of the Oxford vaccine, due to finish in about September, would be successful. Oxford scientists said last week the main focus of initial tests was to ascertain not only whether the vaccine worked but that it induced good immune responses and no unacceptable side effects. Prime Minister Narendra Modi’s office was “very closely” involved in the vaccine production and the company is hoping the government will help foot the cost of making it. Serum has also partnered with the U.S. biotech firm Codagenix and Austria’s Themis on two other COVID-19 vaccine candidates and plans to announce a fourth alliance in a couple of weeks. Serum’s board last week also agreed to invest roughly 6 billion rupees on making a new manufacturing unit to solely produce coronavirus vaccines, Poonawalla said.
Gold prices inched higher on Wednesday as the dollar weakened amid plans to ease major economies out of coronavirus lockdowns, while investors awaited any forward guidance from the U.S. Federal Reserve’s policy statement due later in the day. Spot gold rose 0.1% to $1,708.53 per ounce by 0126 GMT. U.S. gold futures climbed 0.2% to $1,725.50 per ounce. The dollar slipped, having touched a two-week low in the previous session, as the slowing spread of the coronavirus and moves to re-open economies supported the investor mood, ahead of major central bank meetings. The Fed, which has responded to the current crisis by slashing interest rates, resuming bond-buying and backstopping credit markets, is scheduled to issue a policy statement at 1800 GMT and could begin to clarify how long it intends to leave rates near zero. Gold tends to benefit from widespread stimulus measures as it is often seen as a hedge against inflation and currency debasement. Bank of Nova Scotia told staff on Tuesday it would close its metals business, drawing the curtain on one of the most venerable names in precious metals trading, two sources familiar with the matter told Reuters. Palladium rose 0.3% to $1,921.81 an ounce and platinum climbed 0.2% to $773.67 per ounce, while silver fell 0.3% to $15.15 per ounce.
Oil prices climbed on Wednesday, trimming some of this week’s steep losses after U.S. stockpiles rose less than expected and hopes grew for demand to pick up as some European countries and U.S. cities moved to ease coronavirus lockdowns. U.S. West Texas Intermediate crude futures jumped to a high of $13.85 and were up 8.8%, or $1.09, at $13.43 at 0038 GMT, paring a 27% plunge over the first two days of this week. U.S. crude inventories rose by 10 million barrels to 510 million barrels in the week to April 24, compared with analysts’ expectations for a build of 10.6 million barrels, data from industry group the American Petroleum Institute showed on Tuesday. The market will get another read on U.S. inventories when the U.S. Energy Information Administration releases weekly data later on Wednesday. While storage is rapidly filling up, production cuts by U.S. shale producers, estimated by consultants Rystad Energy at 300,000 barrels per day for May and June, should help slow flows into tanks. That would add to production cuts of almost 10 million bpd agreed by the Organization of the Petroleum Exporting Countries and other large producers including Russia, or about 10% of global production, due to take effect from May 1. At the same time, hopes for at least a slow recovery in demand helped to put a floor under oil prices, following two days of heavy selling in June contracts by exchange-traded funds looking to avoid the extreme volatility which hit WTI last week.