Green shoots emerge on economy while infections rise in Europe, Asia

CORONAVIRUS ALERT 08/06/2020

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From US unemployment benefit applications to German factory orders and Japanese car sales, signs emerged of a gradual economic recovery, even as infections rose in Europe and Asia.

In top stories today:    

       

  • France, Spain, and Greece were among the countries in Europe to record steep increases in infections on August 6, with daily cases in France at more than a two-month high, raising concerns about a second wave of coronavirus cases during the vacation season, the BBC reported. Meanwhile Turkey said no hospitals are operating at capacity, responding to a Reuters report that cited doctors saying some dedicated intensive care units were full. Poland posted a record number of cases for the fifth time since last week, the newswire also said.
  • That increase in cases, prompting local lockdowns from Aberdeen in Scotland to Catalonia in Spain, has dented hopes of a rapid economic recovery in Europe, Bloomberg reported. A slew of companies across the region announced job cuts, the newswire said.
  • Citing misinformation, Facebook, Twitter, and YouTube pulled a video by US President Donald J. Trump in which he claimed that children are “almost immune” to the disease. That’s widely reported on, from Reuters to The Wall Street Journal via the BBC and The Guardian newspaper.
  • Political pressure will not determine when a coronavirus vaccine gets approval even as the White House hopes one will be ready in time for the November presidential election, US regulators have assured scientists, Reuters said in an exclusive report, citing US infectious diseases expert Dr. Anthony Fauci.
  • QUOTE: “We have assurances, and I’ve discussed this with the regulatory authorities, that they promise that they are not going to let political considerations interfere with a regulatory decision,” Fauci told Reuters in an interview. “We’ve spoken explicitly about that, because the subject obviously comes up, and the people in charge of the regulatory process assure us that safety and efficacy is going to be the prime consideration.”
  • North Korea has quarantined thousands of people in locked-down Kaesong city, near the border with rival South Korea, and sent food and other aid there, The Associated Press reported, citing North Korea’s report to the World Health Organization. The country’s response to a suspected case adds to doubts about the country’s longstanding claim to be free of the virus, the news service added.
  • “A Picture Emerges of the Ideal Covid-19 Response” runs a Bloomberg headline. That would involve New Zealand’s testing policy, Denmark’s stance on schools, and the communications strategy of Uganda, Bloomberg reported, citing research by Michael Barber, a former adviser to UK Prime Minister Tony Blair, and Idris Jala, who performed a similar role for Malaysia’s Najib Razak.
  • China threatened countermeasures over a trip starting on August 11 by US Secretary of Health and Human Services Alex Azar, the highest-level visit in four decades to the Chinese-claimed island, Reuters reported. That fuels tensions between Beijing and Washington on issues that range from coronavirus to human rights and trade, the newswire said.

ILLUSIVE AGREEMENT

  • Nowhere close to an agreement. That’s how The New York Times describes the status of talks between Republicans and Democrats on a new round of economic stimulus measures in response to coronavirus. A dispute over funding for the US Postal Service is a new sticking point, in addition to the existing disagreement over renewed unemployment benefits, the Times said. “As US Congress wrangles over aid, millions of renters get desperate” reads a Reuters headline.
  • The statistics say… Americans who rent their homes owed more than $21.5 billion in overdue payments as of the end of July, Reuters said, citing estimates from the global advisory firm Stout, Risius, and Ross.
  • Applications for US unemployment benefits fell more than expected last week, reaching the lowest level since the start of the coronavirus pandemic, Bloomberg reported. The broad decline across all states suggests the labor market is on the mend, the newswire said.
  • The statistics say… Initial jobless claims in regular state programs declined by 249,000 to 1.19 million in the week through August 1, Bloomberg reported, citing Labor Department data on August 6.
  • The Bank of England warned that the economy would not recover from the coronavirus crisis until the end of 2021, slightly later than its previous estimate, Reuters reported. Unemployment is likely almost to double by the end of the year, the central bank also said. But that’s less grim than it might appear: while unemployment is expected to peak at 7.5 percent at the end of 2020, that’s lower than the central bank’s previous estimate of just under 10 percent, the newswire added.
  • QUOTE: “There are some very hard yards, to borrow a rugby phrase, to come,” Bank of England Governor Andrew Bailey said, Reuters reported. “And frankly, we are ready to act, should that be needed.”
  • A surge in factory orders in Germany in June raises hopes that Europe’s largest economy is on the road to recovery following declines it suffered during the coronavirus lockdown earlier in the year, according to The Associated Press. Industrial orders increased by an adjusted 27.9 percent from the previous month, more than double the pace that economists had expected, the news service said.
  • Pandemic, what pandemic? Toyota sees sales recovering faster than it expected and forecast a full-year profit of almost $7 billion, The Wall Street Journal reported. The Japanese carmaker sold 200,000 more vehicles than it envisaged in the three months through June, the Journal said. Meanwhile German sports-gear company Adidas said it expects sales to bounce back in the third quarter, the newspaper reported in a separate article.
  • It was a different story for commodities giant Glencore, which posted a loss for the first six months of the year and scrapped its dividend to investors, as the pandemic dented demand, and also affected prices and production at its mining business, The Wall Street Journal also reported.
  • Japanese gaming giant Nintendo posted a surge of more than 400 percent in fiscal first-quarter profit for the three months through June, reflecting how much the video-game industry has benefited from lockdowns during the pandemic, CNBC reported. Profits of $1.4 billion smashed analysts’ expectations.

VACCINE SHORTAGE?

  • Doctors taking care of the pandemic’s sickest patients across the United States are using Zoom video conferences to share experience in real time, hoping to find ways to reduce the disease’s death toll, news service Stat reported. In one case, a video conference led to doctors cutting the dose of blood thinners for patients on life support, preventing fatal bleeding on the brain as a result, Stat said.
  • Initial supplies of any successful coronavirus vaccine will probably only cover a fraction of the 100 million Americans, including healthcare workers, who should get the shot before the general public because they are at higher risk of exposure or of developing more severe symptoms from the disease, The Wall Street Journal reported. Between 10 million and 20 million doses may be available initially, the Journal cited the US Centers for Disease Control and Prevention and a White House official as saying.
  • And the cost? Shots are priced at between $10 to $37 a dose, the Journal reported separately, citing drug makers including Johnson & Johnson, Moderna, Pfizer and BioNTech. Meanwhile Dr. Anthony Fauci said drug makers will probably have tens of millions of doses of a vaccine available in the early part of 2021, Reuters cited the US infectious diseases expert as saying in an interview.
  • The UK government said it will not be using 50 million face masks—bought for 252 million pounds under a contract with investment firm Ayanda Capital in April—because they have ear loops and not head loops, so may not fit tightly enough to be effective, The Associated Press reported, citing a court case.
  • Bloomberg published a question-and-answer article addressing concerns about children returning to school after the summer vacation. The newswire cites Derek Cummings, an expert in infectious disease transmission at University of Florida’s Emerging Pathogens Institute, and Emily Oster, economics professor at Brown University.

TRAVEL VIGILANCE

  • People arriving in Germany from countries deemed as high risk, including the United States, will be required to take coronavirus tests starting this weekend, Health Minister Jens Spahn told reporters on August 6, The Associated Press said. That comes as Germany reported its highest daily tally of new infections in three months, the news service reported.
  • Italy may suspend flights by Ryanair to the country because of “repeated violations” of coronavirus health regulations including on social distancing, a charge that the airline denies, the BBC reported, citing Italy’s civil aviation authority.
  • Meanwhile Thailand delayed plans for a “travel bubble” with some countries as daily infections rise in part of Asia, Reuters reported. And the Indian Ocean island of Mauritius, which hasn’t recorded a coronavirus case for more than three months, now faces the challenge of how to let tourists back in without increasing the risk of new infections, Bloomberg reported.
  • Vietnam is nearing the conversion of a stadium into a 1,000-bed field hospital in Danang, the coastal city that is its new coronavirus epicenter, as the country contends with an outbreak that’s spread to at least eleven places, Reuters said. The Philippines had another jump in new cases, making it the worst hit country in East Asia, while Hong Kong recorded ninety-five new cases, of which ninety-one were locally transmitted, the newswire also reported.
  • “Spate of suicides among migrant workers in Singapore raises concern” is a separate Reuters headline, as thousands of low-paid workers confined to their dormitories because of the coronavirus pandemic.

YEAR CANCELED

  • Cancel the academic year and make students repeat it: that’s the radical approach Kenya is taking, with classes not expected to begin again until January, the traditional start of the academic year, The New York Times reported. The decision, after a month-long debate, was taken to address issues of inequality that arose in March when school was suspended, as well as to protect students and staff from the risk of exposure to coronavirus, the Times cited education secretary George Magoha as saying.
  • A prominent indigenous chief in Brazil’s Amazon died of respiratory complications related to COVID-19 on August 5, The Washington Post reported, citing Agence France-Presse. Aritana Yawalapiti, 71, who was chief of the Yawalapiti people, tested positive two weeks ago, the Post said.
  • Indonesia has scaled back its plans to transfer state forests to local communities by half this year because social-distancing measures between March and June halted preliminary technical work, the Thomson Reuters Foundation reported, citing the Ministry of Environment and Forestry. The area covered by the delay is twice the size of Los Angeles, the foundation added.
  • READ MORE: Software supply chain security remains an under-appreciated domain of national security policymaking. Working to improve the security of software supporting private sector enterprise as well as sensitive Defense and Intelligence organizations requires more coherent policy response together industry and open source communities, write the Atlantic Council’s Trey Herr, Will Loomis and Stewart Scott.
  • EVENT: Dr. Sahar Khan moderates a conversation with Dr. Moeed Yusuf, Assistant to the Prime Minister of Pakistan on National Security Division and Strategic Policy Planning, to discuss Pakistan’s shifting national security objectives and how the country plans to navigate regional challenges. Details of the event, on Monday, August 10 at 11 a.m. EDT / 8 p.m. PKT, are here.

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