Economies continue to reopen as WHO urges caution; vacation hopes, travel stocks rise

CORONAVIRUS ALERT 05/26/2020

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In top stories today:

  • Economies from Hong Kong to the Middle East took steps to reopen following coronavirus restrictions, while Brazil continues to struggle with the outbreak. Hopes rose of a European vacation season, lifting travel stocks, but the World Health Organization urged caution due to the risk of a second spike of infections.  
  • Japan, the world’s fourth-largest economy, lifted a nationwide state of emergency following seven weeks of restrictions, with Prime Minister Shinzo Abe declaring victory for the “Japan model” of fighting coronavirus, the Financial Times reported.  
  • Hong Kong will ease restrictions this week, while Thailand extended a state of emergency until the end of June, Bloomberg reported. Middle East nations including Syria, Saudi Arabia, United Arab Emirates, and Kuwait plan to loosen coronavirus restrictions this week, The Washington Post reported.
  • READ MORE: “Hong Kong is just one of President Xi’s many high-stakes bets,” writes the Atlantic Council’s Frederick Kempe. “China’s move to impose new national security laws on Hong Kong [is] the most serious threat yet to the city’s democratic self-governance and territorial autonomy.”
  • “Italian nightlife comes raging back, and some politicians are alarmed” reads a Washington Post headline. As images played of nightlife and gatherings on beaches and in piazzas, politicians said the country had become reckless and risked losing ground in its fight against coronavirus, the Post said. 
  • QUOTE: “This weekend has not been serene,” Giuseppe Sala, the mayor of Milan, said in a message posted on Facebook, The Washington Post reported. “We cannot imagine another one like it.” 
  • “Dominic Cummings Offers a Sorry-Not-Sorry for U.K. Lockdown Breach.” That’s how The New York Times sums up the controversy around the lockdown travels of UK Prime Minister Boris Johnson’s top adviser. Cummings refuses to quit but UK legislators want Johnson to fire him, Bloomberg reported. The story gets widespread coverage.  

VACATION HOPES

  • Leisure and travel stocks soared amid reports that Germany and Spain will ease travel restrictions and as no notable increase in infections was reported as businesses reopened following a two-month lockdown, Reuters reported.  
  • QUOTE: “There is a lot more hope that travel restrictions across Europe will be eased in time for the summer holidays,” said Neil Wilson, chief market analyst at Markets.com, Reuters reported. “If the summer holiday season can be saved, it would be a big plus after most of us wrote it off.” 
  • An “immediate second peak”—that’s what countries where coronavirus cases are declining could face if they ease up on restrictions too quickly, World Health Organization emergencies head Dr. Mike Ryan said on May 25, CNBC reported.  

NEW YORK EXODUS?

  • The New York Stock Exchange is scheduled to resume trading on May 26, The Wall Street Journal reported. Traders must wear masks, avoid public transport, and remain separated by plexiglass barriers, with numbers limited to a quarter of the usual total, the Journal reported.  
  • “Can New York avoid a coronavirus exodus?” That’s the question posed by a long-form article in the Financial Times. The city will need to reinvent itself to keep hold of talented people, the Financial Times argues.  
  • “Virus Is Cracking Germany’s Defense Against Jobless Surge” reads a Bloomberg headline. Separately, German investors’ confidence improved in May after lockdown restrictions were lifted in Germany and beyond, the newswire reported.  
  • The statistics say… unemployment in Germany rose by 373,000 in April despite a furlough plan, while as many as 29,000 companies face bankruptcy this year, Bloomberg said.  
  • Singapore announced another 33 billion Singapore dollars ($23.2 billion) to support the island nation’s economy following the impact of the coronavirus crisis, CNBC reported. Singapore also slashed its economic forecast and now expects the country’s gross domestic product to contract by between 4 percent and 7 percent this year, CNBC added.  

NEW TAXES

  • The European Commission plans to call for corporate levies and new environmental taxes, including a European Union-wide tax on plastic waste, as it tries to find novel ways to finance 500 billion euros in debt. That’s part of its plan to help the region recover after coronavirus, the Financial Times reported. The proposals will be published on May 27, the newspaper added.   
  • The board of HSBC, Europe’s largest lender, is urging executives to restart and deepen a restructuring put on hold because of coronavirus, after deciding that the crisis calls for more drastic measures, the Financial Times reported. HSBC said in February that it would cut 35,000 jobs and $4.5 billion in costs by shrinking its US and European units as well as its investment bank, the newspaper said.  
  • A global drive to fund the development of coronavirus vaccines and treatment has raised 9.5 billion euros since its launch on May 4, Reuters reported. The United States has shunned the campaign, the newswire added.  
  • US drugmaker Merck set out development plans for a promising antiviral pill to treat the coronavirus infection and two vaccines to prevent it based on the technology behind Ebola and measles shots, bolstering the global fight against the pandemic, Bloomberg reported.  
  • The World Health Organization temporarily suspended trials of hydroxychloroquine, the drug favored by US President Donald J. Trump to prevent coronavirus, on May 25 because of safety concerns, CNBC said.  
  • QUOTE: “If we want to prevent human beings from suffering from the next infectious disease outbreak, we must go in advance to learn of these unknown viruses carried by wild animals in nature and give early warnings,” Shi Zhengli, a virologist renowned for her work on coronavirus in bats, told Chinese state television network CGTN, Bloomberg said. “If we don’t study them there will possibly be another outbreak.” 
  • One of three clinical trial volunteers who had an adverse reaction to the vaccine being developed by Moderna Therapeutics still believes in the vaccine candidate, news service Stat said. Ian Haydon,  twenty-nine, had the reaction twelve hours after receiving his second dose and recovered within a day, Stat reported.  
  • QUOTE: “As we rush to get a vaccine developed as quickly as possible, the reality of vaccine development is that it can only be rushed so much and the trial still needs to take place,” Haydon said, Stat reported. “They have to move at the speed they move at. And stories like what happened to me, they matter because they shape the approval process.” 
  • Airline Lufthansa reached a preliminary deal with the German government on a $9.8 billion rescue package to cope with what’s expected to be a long-lasting slump in travel, CNBC reported. Under the deal, pending approval by investors and the European Commission, Germany will take a 20 percent stake in the carrier and sell the holding by the end of 2023, CNBC added.  
  • European low-cost carrier Ryanair plans to contest the aid package to Lufthansa, Reuters reported. Eurowings, the low-cost unit of Lufthansa, plans to cut about a third of its head-office workforce, or three hundred people, the newswire reported separately.  

INDONESIA, INDIA

  • Hundreds of thousands of police officers and soldiers will be deployed in Indonesia to ensure people are wearing masks and adhering to social distancing measures, The Washington Post reported, citing Reuters. Health officials in the south-east Asian nation, a vast archipelago of far-flung islands that has reported almost 23,000 cases of coronavirus and 1,391 deaths so far, have blamed the outbreak on people’s unwillingness to comply with public health measures, the newspaper added.
  • Uber is cutting 25 percent of its workforce in India, its biggest market in Asia, as the US ride-hailing company contends with the impact of the strict coronavirus lockdown there, the Financial Times said.
  • “In Bolsonaro’s Brazil, everyone else is to blame for virus” runs an Associated Press headline. President of Brazil Jair Bolsonaro bats away all responsibility, blaming the outbreak instead on governors, mayors, a former health minister, and the media, the Associated Press reported. “Brazil is losing the battle,” Reuters said in a special report.
  • READ MORE: What’s next for emerging economies? An online conversation with the President of the European Bank for Reconstruction and Development (EBRD), Sir Suma Chakrabarti, takes place on Wednesday May 27 at 10:00 am ET. Details are here.

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