The global case tally for the coronavirus that causes COVID-19 passed 5 million on Thursday after the biggest one-day increase since the start of the outbreak, as a top U.S. scientist cautioned that people should not rely on a vaccine and the labor market continued to show massive job losses.
William Haseltine, a scientist, biotech entrepreneur, and infectious disease expert, is chair and president of the global health think tank ACCESS Health International, and said the best way to manage the pandemic is through measures such as isolation, testing and contact tracing and observing social-distancing, face masks and frequent hand washing. Haseltine made the comments in a video interview with Reuters.
“Do not listen to the politicians who say we’re going to have one by the time my re election comes around,” he said. “Maybe we will (but) I’m just saying it’s not a slam-dunk case by any means … because every time people have tried to make a vaccine – for SARS or MERS – it hasn’t actually protected.”
His comments came as the director of the Centers for Disease Control and Prevention warned that the virus is likely to return in the fall and winter and may force a fresh round of lockdown measures. Robert Redfield told the Financial Times that the U.S. needs to speed up its disease-tracking capabilities in the next few months to avoid another public health crisis.
“We’ve seen evidence that the concerns it would go south in the Southern Hemisphere like flu [are coming true], and you’re seeing what’s happening in Brazil now,” Dr. Redfield told the FT. “And then when the Southern Hemisphere is over I suspect it will reground itself in the north.”
Brazil saw another spike in cases overnight amid continued criticism of its President Jair Bolsanaro for mismanaging the outbreak which he has consistently played down and resisted imposing the public-safety measures adopted by countries that have managed to contain the spread.
Bolsanaro has become a supporter of the anti-malarial treatment hydroxychloroquine, which has not been proven to be an effective treatment for COVID-19 although it is currently in trials.
President Donald Trump stunned some on Monday when he said he has been taking hydroxychloroquine to avoid catching the virus, even though there is no scientific evidence it can work as a prophylactic. Hydroxychloroquine is known to have potentially severe side effects, including heart-rhythm problems. On Wednesday, Trump said he will stop taking the drug “in a day or two.”
The FDA in March granted an emergency-use authorization to hydroxychloroquine and chloroquine as COVID-19 treatments. Since then, a number of trials have been launched, including by the National Institute of Allergy and Infectious Diseases (NIAID), which is testing it on 2,000 patients with mild and moderate cases of the virus.
There are now 5.03 million cases of COVID-19 worldwide and 328,730 people have died, according to data aggregated by Johns Hopkins University. At least 1.9 people have recovered.
The U.S. has the highest case toll at 1.55 million and the highest death toll at 93,471.
Russia has 317,554 cases and 3,099 deaths. Brazil has 291,579 cases and 18,859 deaths.
The U.K. has 249,619 cases and 36.124 deaths, the highest death toll in Europe and second highest in the world after the U.S.
Spain, an early hot spot, has 232,555 cases and 27,888 deaths, while Italy has 227,364 cases and 32,330 deaths.
France has 181,700 cases and 28,135 deaths, while Germany has 178,748 cases and 8,195 deaths.
Turkey has 152,587 cases and 4,222 deaths and Iran has 129,341 cases and 7,249 deaths. India is next with 113,461 cases and 3,457 fatalities, followed by Peru with 104,020 cases and 3,024 deaths.
China, where the disease was first reported late last year, has 84,063 cases and 4,638 deaths.
New York remains the U.S. epicenter with 359,234 cases and 28,540 deaths, according to a New York Times tracker.
All 50 states are now starting to reopen. A Columbia University report estimates that about 36,000 fewer people would have died if the U.S. had imposed social-distancing measures one week earlier in March.
What’s the economy saying?
More than 4.4 million Americans applied for jobless benefits in the latest week through states or through a temporary federal-relief program, reflecting persistent pressure on struggling companies to slash payrolls even as the U.S. economy slowly reopens for business, as MarketWatch’s Jeffry Bartash reported.
MarketWatch for the first time reported jobless claims in raw or actual figures, foregoing the time-honored media practice of using seasonally adjusted numbers. The seasonal adjustments have overstated jobless claims by several million and are less relevant given the nature of a once-in-a-century pandemic. See this congressional report for a fuller explanation.
Since the coronavirus pandemic and lockdowns started in mid-March, some 35.5 million people have applied for jobless benefits through their states. Roughly 9.2 million new claims have been filed via a new federal program that has made self-employed workers and independent contractors such as writers or drivers for Uber Technologies Inc. UBER, -0.63% eligible for the first time ever.
Total new claims since mid-March: almost 45 million.
“The key point here is that the trend is rising strongly, signaling that most of the people who have been laid off due to Covid remain unemployed,” said chief economist Ian Shepherdson of Pantheon Macroeconomics.
A separate data release showed U.S. private sector companies reported a slightly slower rate of contraction in activity in May. The latest PMI data from IHS Markit rose to 39.8 in May from 36.1 in April, as MarketWatch’s Greg Robb reported. Meanwhile the flash services purchasing managers index rose in May fell to 36.9 from 26.7.
Any reading below 50 indicates worsening conditions. The flash estimate is typically based on approximately 85%-90% of total survey responses each month.
“Encouragement comes from the survey indicating that the rate of economic collapse seems to have peaked in April. In the absence of a second wave of COVID-19 infections, the decline should moderate further in coming months,” said Chris Williamson, chief business economist at IHS Markit.
The Philadelphia Fed manufacturing index in May rose to -43.1 from – 56.6 in April, which was the lowest level in 40 years. Any reading below zero indicates worsening conditions. Economists polled by MarketWatch expected a -40 reading.
The National Association of Realtors reported an almost 18% slide in existing-home sales in April as the pandemic upended the real-estate market. Existing-home sales occurred at a seasonally-adjusted annual pace of 4.33 million, the National Association of Realtors reported Tuesday. Economists polled by MarketWatch had forecast existing-home sales to take place at an annual pace of 4.2 million. The inventory of unsold homes, meanwhile, increased to a 4.1-month supply.
What are companies saying?
Earnings season moved on with the latest reports from retailers, including Macy’s Inc. M, +3.35% , TJX Cos. TJX, +5.86% and electronics retailer Best Buy Co. Inc. BBY, -4.45% , and the numbers reflected the mixed performance for those companies that do not sell the essential items the public is clamoring for under lockdown.
Macy’s issued a sales warning for the first quarter, as closed stores lost out on business. The company expects an operating loss of $905 million to $1.11 billion, after operating income of $203 million a year ago. But the department-store chain is expecting to reopen most stores by late June.
Best Buy fared better with profit, revenue and same-store sales that fell less than expected.
“”In the middle of Q1, we shifted all our stores to a curbside-only operating model and were able to retain approximately 81% of last year’s sales during the last six weeks of the quarter, even though not a single customer set foot in our stores,” said Chief Executive Corie Barry.
TJX swung to a large loss as its revenue halved. The discounter wrote down $500 million in inventory, largely items that had already been reduced and were expected to be reduced further.
Medical devices maker Medtronic PLC MDT, -2.35% had a weak quarter as many elective procedures were canceled, but to please shareholders, the company increased its quarterly dividend.
Elsewhere, companies continued to issue debt, bonds and convertibles as they work to bolster liquidity during the pandemic.
Here are the latest things companies have said about COVID-19:
• Best Buy reported fiscal first-quarter profit, revenue and same-store sales that fell less than expected. Domestic same-store sales fell 5.7% to beat expectations of an 11.1% drop, while international same-store sales grew 0.2% to beat expectations of an 11.9% decline. “In the middle of Q1, we shifted all our stores to a curbside-only operating model and were able to retain approximately 81% of last year’s sales during the last six weeks of the quarter, even though not a single customer set foot in our stores,” said Chief Executive Corie Barry. On May 4, the company started opening stores, following strict social distancing measures and with the use of protective equipment. The company said about 700 stores, or 70%, are now open.
• BJ’s Wholesale Club Holdings Inc. BJ, +13.18% reported fiscal first-quarter results that were well above expectations, as the pandemic “increased demand for our services.” Same-store sales jumped 19.9%, or increased 27.0% excluding gasoline sales, as digitally enabled sales rose 350%. The FactSet same-store sales consensus was for 5.8% growth.
• Expedia Group Inc.’s EXPE, -1.21% quarterly loss came in wider than expected, hurt by cancellations during the pandemic. “Like all travel companies, Expedia Group suffered a major reduction in business since the onset of COVID-19,” said Peter Kern, vice chairman and chief executive. “Fortunately, we were ahead of the game having implemented cost savings measures earlier this year, and with the added pressure from COVID-19 we accelerated and expanded our ambition on improving our long-term cost structure.”
• Hormel Foods Corp. HRL, -4.60%, which brands include SPAM, Skippy and Hormel, reported a fiscal second-quarter profit that fell shy of expectations but sales that rose above forecasts, boosted by strength in grocery product sales amid the pandemic. U.S. retail net sales grew 16% and deli net sales increased 5%, while food service sales fell 21%. “In the second quarter, the company absorbed approximately $20 million in incremental supply chain costs primarily related to lower production volumes, employee bonuses and enhanced safety measures in its production facilities,” the company stated, in response to the pandemic. “The company expects to absorb another $60-$80 million in the second half of the year, weighted primarily to the third quarter.”
Keurig Dr Pepper Inc. KDP, -2.61% priced a $40 million secondary stock offering, joining the many companies that are issuing debt or equity to bolster liquidity during the pandemic. The Burlington, Mass.-based company priced the deal at $27.25 a share, compared with its Wed. closing price of $27.69. The shares were sold by Maple Holdings B.V., a holding company majority owned by JAB Holdings B.V., a Luxembourg-based German conglomerate, which has directly purchased about 7.4 million shares. Goldman Sachs is sole underwriter on the deal.
• L Brands Inc. LB, +16.36% reported a wider-than-expected loss in the first quarter and said it remained “committed” to spinning off its Bath & Body Works business. Nearly all of the company’s stores have been closed since March 17 due to the pandemic. The company remains on track to establish Bath & Body Works as a pure-play public company and is “taking the necessary steps to prepare” its Victoria’s Secret lingerie, Victoria’s Secret beauty, and Pink businesses to operate as a stand-alone company. A deal with a private-equity firm fell through earlier this month amid the economic downturn caused by the s pandemic. L Brands did not provide guidance, pining that lack onto the “high level of uncertainty
• Macy’s issued a first-quarter sales warning, saying it expects sales to total $3.00 billion to $3.03 billion, down from $5.50 billion last year and below the $3.60 billion FactSet forecast. The company expects an operating loss of $905 million to $1.11 billion, after operating income of $203 million in the year-ago period. Macy’s, which owns Bloomingdale’s and the Bluemercury beauty chain, closed its stores on March 18 and expect to reopen most by late June. Stores began to reopen on May 4 where allowed, and 190 are operating with 80 expected to reopen on Memorial Day weekend. “With two weeks of results from reopened stores, customer demand is moderately higher than we anticipated,” said Jeff Gennette, Macy’s chief executive, in a statement.
• Employees at Mastercard Inc. MA, -1.04% will be allowed to work from home until the coronavirus pandemic is controlled, Reuters reported. “We have stated upfront to all our employees, that it is their choice … we want them to make the decision on when they feel comfortable returning to the office,” the credit-card company’s Chief People Officer Michael Fraccaro told Reuters. That could be until there’s a vaccine or an effective treatment for COVID-19. Fraccaro also told Reuters that Mastercard will be looking at consolidating office space post-pandemic. Mastercard has about 20,000 employees and is headquartered in Westchester, N.Y .
• Medical device company Medtronic reported profit and sales that were below consensus, but in line with an update provided by the company on April 21, which detailed the impact of the coronavirus pandemic on operations and financials. “Medtronic’s results were also consistent with the impact felt across the MedTech industry from deferred procedures as a result of the pandemic,” the Dublin-based company said. “Medtronic is in a strong financial position, as represented by the increase in its cash dividend announced today, and the company continues to drive its long-term strategies.” The company’s board approved an increase in the quarterly dividend to 58 cents from 54 cents. It is not offering guidance because of the uncertainty created by the pandemic.
• Royal Caribbean Cruises Ltd. RCL, +8.61% said 2020 bookings would be “meaningfully lower” than last year, but said 2021 bookings remained within historical ranges at higher prices. Analyst Patrick Scholes at SunTrust Robinson Humphrey said if 2020 cruise cancellations were filtered out to make apples-to-apples comparisons, he estimates that 2021 bookings are down about 15% to 20%. The reason prices for 2021 may be higher, if canceled cruises are being offered 125% credits on future bookings, customers may be willing to upgrade to more expensive rooms.
•Take-Two Interactive Software Inc. TTWO, -1.92% topped Wall Street estimates for its fiscal fourth quarter, as stay-at-home orders during the coronavirus pandemic boosted demand for its videogames. “With more people staying at home, we have experienced, and are continuing to experience, heightened levels of engagement and Net Bookings growth-to-date,” the company said.
• Mattress company Tempur Sealy Inc. TPX, +4.63% starting to reopen its U.S. Tempur-Pedic and Sleep Outfitters retail stores in a phased approach that complies with local, state and CDC recommendations. The Lexington, Ky.-based company is expecting all 160 U.S. outlets to be open by end May, with some operating reduced hours and delivery services during the coronavirus pandemic. The company is also supporting third-party sellers of its products with their reopening, offering a cleaning protocol. It expects about 65% of those stores to be open by end May.
• TJ Maxx parent TJX reported a wider-than-expected first-quarter loss and revenue that lagged estimate, as stores shuttered during the pandemic. TJX had shareholder distributions of $480 million prior to the closures, including a share repurchase program that has since been suspended. TJX stores, which also includes Marmaxx and HomeGoods, closed on March 19 but have begun reopening, with more than 1,600 stores operating around the world. New sanitizing programs are in place, workers are required to wear face masks, there are new merchandise return procedures and fitting rooms are closed in the U.S. The company has drawn down its $1 billion in revolving credit facilities and issued $4 billion in aggregate principal of 5-, 7-, 10- and 30-year senior notes at an average weighted rate of 3.85%. Capex has been slashed to a range of $400 million to $600 million from $1.4 billion. The company has paid most of its first-quarter rent, with some April rent deferred and a “meaningful” portion of second-quarter rent deferred until primarily fiscal 2022.
• Under Armour Inc. UA, -2.00% is offering $400 million of convertible senior notes that mature in 2024, joining the many companies that are raising money to bolster liquidity during the coronavirus pandemic. The sporting goods company said it would use proceeds of the deal to fund capped call transactions that will reduce dilution when the notes are converted into equity. It will use the remainder to pay down debt under a revolving credit facility.
• Yum Brands Inc.’s YUM, -0.38% Taco Bell will hire 30,000 workers this summer. The roles include existing job openings as well as those that have been created by the pandemic, including positions tied to drive-through service, curbside pickup and to managing delivery. Taco Bell and its franchisees are providing workers with gear like masks and gloves and taking other safety and sanitizing precautions.
Fat Brands Chief on Health and Safety