- U.S. Coronavirus Cases Hit Another Daily Record New coronavirus cases in the U.S. rose by more than 63,000, another single-day record, as hospitals in Texas, California and other states strain to accommodate a surge of new patients.
- All states now fail to meet at least one of the four recommended gating criteria. Nationally, prevalence of symptoms, daily new cases, and the positive test rate are still increasing. Hospitalizations are rising nationally as well (…). 7 states representing 25% of the population – Florida, Arizona, Texas, South Carolina, Georgia, Nevada, and Alabama – meet none of the federal criteria for reopening, and another 9 states (9% of the population) meet just one. Conditions in Florida continue to worsen significantly: not only is the estimated effective reproductive number Rt at a very high 1.17 and available hospital capacity already low, but prevalence of COVID symptoms is increasing faster than in any other state in the nation. (GS)
German Biotech Sees Covid Vaccine Ready for Approval by December BioNTech, which has partnered with Pfizer to develop a coronavirus vaccine, is confident it will be ready to seek regulatory approval by the end of the year, its chief executive said. Several hundred million doses could be produced even before approval, and over 1 billion by the end of 2021. (WSJ)
PANDENOMICS
U.S. Initial Unemployment Claims Edged Lower in Latest Week Number of workers receiving continuing unemployment benefits at lowest level since mid-April
Initial unemployment claims fell by a seasonally adjusted 99,000 to 1.3 million for the week ended July 4, the Labor Department reported Thursday. That extends a trend of gradual declines from a peak of 6.9 million in mid-March, when the coronavirus pandemic and mandated business closures shut down swaths of the U.S. economy. Still, last week’s level was well above the highest week on record before this year, which was 695,000 in 1982.
The number of Americans receiving unemployment benefits fell by nearly 700,000 to 18.1 million for the week ended June 27, the lowest reading since the week ended April 18. (…)
In addition to regular state programs in place since the 1960s, unemployment benefits have been expanded to those who were previously ineligible for such aid, including self-employed and gig-economy workers.
Last week, 1 million sought benefits through that program, which is accounted for separately from the regular unemployment insurance program and not adjusted for seasonality. For the week ended June 20, the latest available data, the number receiving payments through the program rose by 1.5 million to 14.4 million. (…)
Several large companies have signaled more layoffs to come. United Airlines Holdings Inc. told 36,000 employees Wednesday they could be furloughed from Oct. 1 because of a drop in passenger demand. On Thursday, Walgreens Boots Alliance Inc. said it plans to eliminate about 4,000 jobs in the U.K., while Harley-Davidson Inc. said it would cut about 700 jobs as part of a global overhaul. Levi Strauss & Co. has said it would shed jobs in the coming weeks.
Clothing retailer Brooks Brothers, which filed for bankruptcy this week, has permanently closed 50 stores due to the pandemic. McDonald’s Corp. and Apple Inc. are among the companies that have halted plans to reopen stores or announced new temporary closures. (…)
Reuters sums up all the data for us:
There were 32.9 million people receiving unemployment checks under all programs in the third week of June, up 1.411 million from the middle of the month. Economists say this number, which is reported with a two-week lag offered a more accurate picture of the labor market. The initial and continuing claims data only cover the regular state unemployment programs.
And Bespoke nicely maps it out for us:
Unadjusted for seasonality, for the week ending June 19th regular continuing claims totaled 17.4 million which was lower for a fourth consecutive week. On top of those, PUA [Pandemic Unemployment Assistance] claims rose to 14.4 million. Adding in PUA claims, this was the third consecutive higher reading for PUA claims. Unadjusted continuing claims including PUA claims now sits at 31.8 million which is the highest level since they were first reported in April. In other words, regularly reported jobless claims have improved recently but the addition of other types of claims like PUA, paints a weaker picture of the labor market in which claims are rising rather than falling.
ING plots the trend differently:
BLS versus DoI measures of unemployment
A YouGov survey between July 5-7 reveals that
Nearly half (46%) of Americans say they are very worried or somewhat worried about losing their job, compared to 52 percent who report they are not very worried at all. The data varies by age, as half (50%) of 30-to 44-year-olds, 65 percent of 45-to 64-year-olds, and two in three (66%) Americans over the age of 65, say they are not very worried about losing their job.
As a result:
- In the first half of 2020, more than 3,600 companies filed for bankruptcy, according to legal services provider Epiq. Just over 600 filed in June, up 43% from June 2019. (Axios)
Mnuchin Expects New Stimulus Deal by End of July Treasury secretary says administration is working with the Senate to pass a new bill for coronavirus-related economic aid
Mr. Mnuchin said the administration supports a second round of economic impact payments to households, an extension of enhanced unemployment benefits for furloughed workers and a “much, much more targeted” version of the Paycheck Protection Program of forgivable loans for small businesses. (…) Mr. Mnuchin indicated that the next round of extra benefits might be aimed at workers in industries hardest hit by the coronavirus pandemic and resulting lockdowns. (…)
Officials are also discussing another round of direct payments to individuals, following the $1,200 most American adults received in April.
“We do support another round of economic-impact payments,” Mr. Mnuchin said. “The level and the criteria we’ll be discussing with the Senate.”
But he repeated the administration’s opposition to aid for state governments that he said were mismanaged before the Covid crisis struck. (…)
NBF illustrates why that matters a lot:
Tyson Turns to Robot Butchers, Spurred by Coronavirus The pandemic is speeding meatpackers’ shift from human meat cutters to automated ones, but machines can’t yet match people’s ability. While meat processing overall has grown safer in recent years, it remains one of the more hazardous jobs in the U.S. economy.
China Auto Sales Bounce Back From Worst-Ever Quarter China’s auto market continued to rebound from damage from the new coronavirus, though dealerships haven’t turned optimistic about consumer sentiment.
Sales in the country increased 11.6% in June from a year earlier to 2.3 million vehicles, the government-backed China Association of Automobile Manufacturers said Friday.
The world’s biggest auto market recorded a 10.4% increase in vehicle sales in the second quarter, based on The Wall Street Journal’s calculation, as factories resumed production and government policies boosted auto purchases. Sales slid 42.4% in the first quarter and have been rising since April, mostly driven by demand for commercial vehicles.
Ford Motor Co. said its second-quarter sales in China rose 3% from a year earlier, while those of General Motors Co. and Nissan Motor Co. dropped 5.3% and 3.9%, respectively. (…)
The official auto-dealer group said the market will likely cool this month following heavy promotions by car makers and dealers in May and June, and government policies introduced in May will likely erode demand in the third quarter.
Car sales from auto makers to dealerships have been outpacing those from retailers to consumers, exposing a gap between real market demand and official sales figures. Retail sales of passenger cars declined by 6.2% in June from a year earlier, according to the China Passenger Car Association.
Sales of new-energy vehicles, which include electric cars, fell 33.1% last month from a year earlier to 104,000 vehicles, the CAAM said.
Tesla sold 14,954 China-built Model 3s in June, surging 35% from May, according to passenger-car association data.
Zombie companies in Europe are back on the rise, thanks to an unprecedentedly easy monetary policy. (BofA Global Research via Isabelnet)
Companies Raised Record Amounts Selling Stock During Crisis Since the pandemic began, companies looking to bolster their balance sheets have rushed to sell stock in record amounts. The result has been a resurgence in fees to Wall Street banks—a bounceback bankers and investors say could last through the fall.
- The bubbling IPO market in 2020 also is starting to look familiar. “You see similar levels of companies with no earnings, so basically speculative investments, coming to the IPO market as we had in 1999–2000,” Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America, said during a recent presentation. (Axios)
Robinhood Has Lured Young Traders, Sometimes With Devastating Results Its users buy and sell the riskiest financial products and do so more frequently than customers at other retail brokerage firms, but their inexperience can lead to staggering losses.
(…) Mr. Dobatse, now 32, said he had been charmed by Robinhood’s one-click trading, easy access to complex investment products, and features like falling confetti and emoji-filled phone notifications that made it feel like a game. After funding his account with $15,000 in credit card advances, he began spending more time on the app.
As he repeatedly lost money, Mr. Dobatse took out two $30,000 home equity loans so he could buy and sell more speculative stocks and options, hoping to pay off his debts. His account value shot above $1 million this year — but almost all of that recently disappeared. This week, his balance was $6,956. (…)
More than at any other retail brokerage firm, Robinhood’s users trade the riskiest products and at the fastest pace, according to an analysis of new filings from nine brokerage firms by the research firm Alphacution for The New York Times. (…)
Robinhood’s average customer is young and lacks investing know-how. The average age is 31, the company said, and half of its customers had never invested before. (…)