On Monday, coronavirus cases in the U.S. rose by 64,605 from a day earlier to 3.34 million, according to data collected by Johns Hopkins University and Bloomberg News. The 2% increase was in line with the average daily increase of 1.9% over the past week. Deaths rose to 135,400.
In NYC: 51,687 tests were performed yesterday. 557 tests came back positive (1.08% of total). Total hospitalizations fell to 792. For the first time in months New York City saw a 24 hour period with no COVID-19 related deaths.
Meanwhile, Florida’s daily positivity rate for coronavirus on Monday was 19.19%. The latest daily data from the Florida Department of Health shows 12,624 patients out of 65,800 people tested positive for COVID-19.
Yesterday, 8.1% of all 720k tests performed in the U.S were positive.
Pence Tells Governors to Protect Citizens However They Can On Monday, he made clear the situation has become grave.
(…) The person who heard the Monday call said the vice president dropped previous talking points meant to argue that the pandemic’s threat was overstated. (…)
In New York, Cuomo has said a decision on whether schools will reopen for in-person learning will be made by the state early next month. Cuomo, a Democrat, has noted that the federal government has no authority on the matter.
“He was wrong on the economic reopening and he’s wrong on the schools reopening,” Cuomo said Monday of Trump. “We’re not going to use our children as guinea pigs.”
San Diego and Los Angeles, America’s second-largest school district behind New York City, will start the academic year with online classes amid the resurgent coronavirus. The districts together have an enrollment of about 720,000 students. (…)
The WSJ editorial board, in The Case for Reopening Schools, says that “the evidence—scientific, health and economic—argues overwhelmingly for schools to open in the fall.” On Monday, Scott Gottlieb, former FDA commissioner, wrote an op-ed in the WSJ, arguing that
(…) The evidence is varied. Many studies do show children are less susceptible to catching and spreading the virus. Less than 10% of reported infections in Germany, Italy and the U.S. have been in people under 18. It’s possible that because children typically get milder cases of Covid, they are less likely to spread the virus through sneezing and coughing.
Yet some studies have found that children may be as likely as adults to become infected, partly because kids have more close contacts. And virus levels in their respiratory droplets can be just as high as for adults. The evidence is still emerging, and credible studies can be marshaled to support both more and less caution.
Then there is the question of severity. When children are infected, there is wide agreement that they are less likely to get seriously ill compared with adults. But lower risk does not mean no risk.
The number of children hospitalized with serious Covid in the U.S. is small. But the largest study of 2,100 pediatric Covid patients from China found that 5% of children developed severe disease with low blood oxygen; 0.6% became more critically ill with respiratory failure, shock or multiple organ dysfunction. Researchers in the U.S. are also investigating a rare inflammatory syndrome related to infection that can make children seriously ill and damage their hearts. (…)
Axios-Ipsos poll: Parents fear return to school
From Morning Consult:
Fifty-two percent of U.S. adults agree that the United States has been “worse than most other countries” in handling the coronavirus outbreak, marking the highest point since Morning Consult began tracking in April. Just 30 percent say their country’s response has been better than that of “most other countries,” a new low point. Read more
Thirty-eight percent of registered voters approve of how President Donald Trump has handled the coronavirus outbreak, while 57 percent disapprove. The net approval (approval minus disapproval) of minus 19 is the lowest since Morning Consult began tracking. In recent weeks, Trump’s approval rating has fallen particularly with independent voters. In the latest survey, 29 percent of independent voters approve of the president’s coronavirus response while 62 percent disapprove. Read more
GOP Governors Losing Residents’ Support on COVID-19
(…) There have been clear declines in residents’ ratings of their governor in Republican-led states as a whole. This includes an 11-point decrease, from 54% in early June to 43% most recently, in those agreeing their governor is communicating a clear plan of action for addressing the pandemic. There has also been an eight-point decline, from 61% to 53%, in those agreeing their governor cares about the safety and health of the community. Meanwhile, there has been no meaningful change in the governor ratings of residents in Democratic-led states as a whole. (…)
EU to Resist Further Travel Opening With New Virus Wave a Risk
The European Union will recommend keeping its external borders shut to Americans and most other foreigners for at least two more weeks as fears grow of a second coronavirus wave, according to three officials familiar with the matter.
Member-government envoys in Brussels on Tuesday plan to urge no expansion of a list of 15 countries — Canada, Japan, South Korea and China among them — whose residents were given the green light two weeks ago to visit the EU, the officials said on the condition of anonymity.
U.K.: The current reproduction rate in the U.K. is about 0.7-0.9, which means the epidemic is diminishing overall. (Bloomberg)
Did you miss yesterday’s Make America Win Again! ?
PANDENOMICS
U.S. Small-Business Optimism Jumps on Sales Expectations
The group’s index of sentiment increased 6.2 points in June to 100.6, the second straight gain after hitting a seven-year low two months earlier. Even with the advance, the measure remains below the 2020 high of 104.5 reached in February. The NFIB’s gauge of sales expectations surged by a record 37 points to a positive 13. (…)
Eight of 10 subindexes in the small-business optimism index picked up in June, though the measure of sales expectations contributed more than half of overall monthly increase. Job-creation plans improved by eight points, which the NFIB attributed in part to Paycheck Protection Program loans.
Earnings trends, however, continued to weaken, falling to the lowest March 2010.
Full NFIB report here:
Axios warns
The Paycheck Protection Program (PPP) has left much to be desired for needy small businesses around the U.S., and the overwhelming majority of recipients are about to exhaust their funding and may start laying off employees.
A new survey from Goldman Sachs provided first to Axios finds 84% of PPP loan recipients will exhaust their funding by the first week of August and only 16% say they’re very confident they will be able to maintain payroll if no further government relief is provided.
- A recent survey by the right-leaning National Federation of Independent Business found 22% of PPP recipients anticipate having to lay off at least one employee after using their loan.
- 63% of small business owners say less than 75% of their revenue before the pandemic started has returned.
- 60% say that less than 75% of their customers from before the pandemic started have returned.
From Barclays Research (via The Daily Shot)
From DeepMacro and GS (via The Daily Shot)
People are concerned about their jobs and household budgets, but a rebound to get them back spending in shops, airports or restaurants will take time, a YouGov survey across 26 countries suggests. More than 30% feel less secure in their job than a month ago and around half of the respondents are still cutting back on non-essential expenditure. Americans would be about three times more likely to save rather than spend an unexpected cash windfall. (Bloomberg)
China’s Imports and Exports Rebound as Coronavirus Fades in World’s Second-Largest Economy Chinese imports from the U.S. rose for the first time since the new coronavirus emerged earlier this year, showcasing Beijing’s post-pandemic purchasing power even as political tension between the world’s two largest economies continues to rise.
China’s appetite for meat and other agricultural goods helped Chinese imports of U.S. goods to jump by 11.3% in June from a year earlier, after a 13.5% drop in May, data from Beijing’s General Administration of Customs showed Tuesday. The Chinese buying helped to narrow Washington’s trade deficit with Beijing from a year earlier, though Chinese exports to the U.S. also improved, rising 1.4% in June from a year earlier after a 1.3% decline in May. (…)
China’s imports from the rest of the world climbed 2.7% in June from a year earlier, Chinese customs officials said Tuesday, reversing a 16.7% slump in May and coming in much stronger than an expected drop of 10%, according to economists polled earlier by The Wall Street Journal.
Exports, meantime, edged up 0.5% in June from a year earlier, versus a 3.3% decline in May, customs data showed. June’s exports were also higher than economists’ median forecast for a 4.3% year-over-year decline. (…)
Deficit Reaches $3 Trillion as Virus Costs Soar As share of GDP, deficit is on pace to be the largest since World War II
As a share of gross domestic product, the 12-month deficit came to 14% last month, compared with 10.1% in February 2010, when the U.S. was still recovering from the last recession. In June alone, the deficit widened to a monthly record of $864 billion, the Treasury Department said Monday—nearly as much as the gap for the entire previous fiscal year, which totaled $984 billion. (…)
For the first nine months of the fiscal year, the budget gap totaled $2.7 trillion, the Treasury said, more than triple the deficit during the same period a year earlier. Receipts fell 13% from October through June compared with a year earlier, and spending rose 49%. (…)
Political support for taming deficits has faded in Washington in recent years, as persistent global demand for U.S. Treasury assets has kept borrowing costs near historic lows. Despite the surge in government borrowing, net interest costs fell 11% in the first nine months of the fiscal year, the Treasury said Monday.
EARNINGS WATCH
Today is the official kickoff, starting with trailing EPS of $140.12 after the first 20 early reports (Mar-May quarter) aggregated a 32.3% decline in YoY earnings on revenues down 3.5%.
JPMorgan sets aside $10.5 billion for loan losses as profit top estimates JPMorgan Chase & Co on Tuesday set aside about $10.5 billion in reserves to cover a wave of potential defaults in the aftermath of the COVID-19 pandemic as the largest U.S. bank reported a smaller-than-expected 51% drop in second-quarter profit.
JPMorgan’s Record Trading Helps Ease the Pandemic’s Toll
Citigroup Profit Falls 73%
Wells Fargo swings to $2.4 billion loss as pandemic bites The bank, among the United States’ biggest mortgage lenders, reported a net loss of $2.4 billion, or 66 cents per share, for the quarter ended June 30, compared with a profit of $6.2 billion, or $1.30 per share, in the year-earlier period. Analysts had expected Wells Fargo to report a loss per share of 20 cents, according to Refinitiv.
“We are extremely disappointed in both our second quarter results and our intent to reduce our dividend. Our view of the length and severity of the economic downturn has deteriorated considerably from the assumptions used last quarter,” Chief Executive Charlie Scarf said in a statement.
I was wondering what these insiders are buying: growth or value?
Then I found that 19 of the top 50 companies with net buying in $value over the past 60 days were in Health Care. Only 2 were in Tech and 4 in Consumer cyclicals, according to data from INK Research. Furthermore, only 2 sectors, Energy and Financials, display larger buy-only transactions than sell-only with Technology the least favored. INK Research commented on July 8:
Our key US Indicator which measures sentiment towards the average stock in America has firmly established a bottoming pattern. That means insider buying has bottomed out, typically a short-term bearish signal as such a pattern often happens near market tops. Moreover, we have seen above-average insider profit-taking in dollar terms. This has taken place right before many firms enter insider trading blackout periods. In plain English, that means insiders are taking money off the table while the going is good. (…) we find little comfort from insider signals as our banking indicator is heading down even as bank stocks fall. That is not typically a good sign.
The [BoA] survey also finds cash levels rose to 4.9% from 4.7%. That caution shows up elsewhere — just 14% say the economic recovery will be “V”-shaped versus 44% expecting a “U,” and 30% a “W” shaped recovery.
PANDEMONIUM
U.K. Bans Huawei From 5G Networks in Security Crackdown
New U.S. Visa Rules Threaten to Deport 369,000 Chinese Students
As schools try to figure out how to start the fall semester amid the coronavirus pandemic, some — including Harvard University and the University of Southern California — are opting for online-only instruction. And that means their foreign students will have to leave or transfer, according to new rules issued Monday by the U.S. Immigrations and Customs Enforcement agency. In order to keep their student visas, foreign nationals have to take in-person classes, according to ICE. (…)
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As U.S. Turns Hostile, Foreign Student Permits Climb in Canada The latest data show 30,785 new study permits were issued in May, above the 27,810 permits issued during the same month last year, the first year-over-year increase in 2020. (…)
U.S. Shifts Policy, Rejects Most Chinese Maritime Claims in South China Sea The U.S. declared its formal opposition to a swath of Chinese claims in the South China Sea, in an unusually direct challenge to Beijing’s efforts to assert control in the strategic waters.
(…) While Washington has previously said it sees Beijing’s expansive sovereignty claims over most of the South China Sea as unlawful, the U.S. is now officially rejecting specific Chinese claims for the first time, according to diplomats familiar with the matter. (…) “The world will not allow Beijing to treat the South China Sea as its maritime empire,” Mr. Pompeo said. (…)
Beijing’s claims there overlap with those of six governments, including five Southeast Asian countries. The U.S., which doesn’t have claims in these waters, has generally called on rival claimants to resolve their disputes peacefully and in accordance with international law. (…)
China to Impose Sanctions on Lockheed Martin on Taiwan Sale
China said it would impose sanctions on Lockheed Martin Corp. after the U.S. approved a possible $620 million deal for Taiwan to buy parts to refurbish defensive missiles made by the company.
Chinese Foreign Ministry spokesman Zhao Lijian made the announcement at a briefing in Beijing on Tuesday. He called on the U.S. to cut military ties with Taiwan — which China considers part of its territory — to avoid “further harm to bilateral relations.”
“China firmly opposes U.S. arms sales to Taiwan,” Zhao said. “We will impose sanctions on the main contractor of this arms sale, Lockheed Martin.” (…)
DIFFERENT FOLKS, DIFFERENT STROKES
