The U.S. reported fewer than 50,000 new coronavirus cases for the second day in a row, even as the number of cases world-wide surpassed 20 million.
- Australia’s Victoria state reported 331 new cases and 19 deaths, the majority in nursing homes, which have borne the brunt of a second wave of infections in the state. Victoria’s premier appeared before a state government inquiry into the outbreak on Tuesday. State and federal leaders have indicated that border closures between states may remain in place until Christmas or beyond as they try to avoid fresh outbreaks of the scale seen in Victoria. New South Wales, home to Sydney, recorded 22 new cases, its highest daily figure since April.
- Japan’s capital on Tuesday reported 188 new cases, the second day in a row Tokyo’s daily total has fallen below 200. Nationwide, 852 cases were reported, the lowest tally in two weeks.
- From GS:
A review of 201 transmission events finds that clusters predominantly occurred indoors, including in restaurants, bars, senior housing, food plants, religious venues, offices, and dormitories. A detailed analysis from Japan estimates that the infection odds are nearly 19 times greater indoors compared to outdoors. We have also found a strong positive correlation between virus spread and summer restaurant activity across US states and in the Sun Belt, where hot weather drives customers inside.
Relatedly, 238 scientists have emphasized the potential for the virus to spread in tiny droplets called aerosols that can accumulate in poorly ventilated areas. Airborne transmission is increasingly seen as an important source of transmission, in addition to larger droplets generated by coughing, sneezing, and talking. In contrast, a recent comment in the Lancet argued that the chance of transmission through surfaces is very small.
We have also found that attendance of crowded public places sharply and significantly increases infections.
Consumers’ Comfort Level With Most Leisure Activities Stagnates After Dropping in Late June
Putin Says Russia Has Registered World’s First Covid-19 Vaccine
(…) The vaccine, which is being developed by Moscow’s Gamaleya Institute and the Russian Direct Investment Fund, began Phase 3 trials last week. Medics could begin receiving the vaccine by the end of the month, Deputy Prime Minister Tatyana Golikova said at the meeting. (…)
PANDENOMICS
U.S. JOLTS: Job Market Continues to Improve in June
The Bureau of Labor Statistics reported that the total job openings rate rose to 4.1% during June, the highest level since February and up from April’s low of 3.7%. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled.(…)
As of the last business day of June, the job openings level rose a still depressed 5.889 million, down 18.0% y/y. The job openings level in the construction sector fell by one-quarter y/y and in manufacturing by nearly one-third y/y. It fell by 10.8% y/y in leisure & hospitality and by 21.6% y/y in the professional & business service sector. In government, the number of job openings declined 6.5% y/y. (…)
Beware the headline here. These days, “improvement” is all relative:
The Conference Board Employment Trends Index™ (ETI) Increased in July
(…) This stark deceleration represents a preview of what’s to come: Over the next several months, job growth will significantly put on the brakes, likely causing the national unemployment rate to remain in double-digit territory. Less generous government stimulus will dampen consumer spending. In addition, more waves of downsizing and bankruptcies will spur widespread layoffs—and thus further constrain the expansion of the US workforce. (…)
Death spiral for consumers As Congress deadlocks over pandemic relief and President Trump issues executive orders of dubious potency, many Americans are suffering from a quintuple whammy: unemployment, overdue rent, mounting bills, food insecurity and health fears.
Joblessness remains “alarmingly high,” as one NYT article describes it.
Food pantries are overwhelmed. (Feeding America, which runs 200 food banks, says average demand is up nearly 60% and one in six Americans could face hunger as a result of the pandemic.)
A massive wave of homelessness is starting to swell. (“Eviction cairns” are cropping up in New Orleans, where piles of people’s belongings are being thrown out on the street.)
People are even surrendering pets because they can’t afford to take care of them. (…)
Employers Cast Wary Eye on Trump Payroll-Tax Deferral Employers considering President Trump’s plan to allow deferred payment of payroll taxes face a series of costs, uncertainties and headaches.
(…) Employers’ biggest worry: If they stop withholding taxes without any guarantee that Congress will actually forgive any deferred payments, they could find themselves on the hook. That is a particular risk in cases where employees change jobs and employers can’t withhold more taxes from later paychecks to catch up on missed payments. (…)
Lawmakers have criticized the payroll-tax cut for several reasons. They argue that it doesn’t provide much of a hiring incentive, gives too much money to people who already have jobs as opposed to the unemployed and could destabilize Social Security funding. (…)
“It’s just so risky on so many levels,” she said.
- State agencies charged with paying unemployment benefits to jobless residents have their backs against the wall as they rush to parse President Trump’s executive actions on coronavirus aid, Axios’ Courtenay Brown writes. States are being asked to pitch in $100 per unemployed resident, but it’s a heavy lift for cash-strapped states that are still unclear about the details and may not opt-in at all. Plus, any changes to decades-old state unemployment systems would take weeks to implement. “If we have to make any changes to our computer system put in in 2000 … it’s going to keep people from getting those funds,” said Kentucky Gov. Andy Beshear.
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President, Democrats Open to Restarting Stimulus Talks The White House and Democratic negotiators urged each other to resume discussions over a broad relief package after the president issued executive actions on jobless aid and other measures over the weekend.
Trump’s Executive Order on Evictions Likely Won’t Prevent Any Evictions The president’s order doesn’t actually require any concrete action to prevent a coronavirus housing crisis.
(…) Saturday’s executive order doesn’t renew the federal moratorium on evictions that expired in July. In fact, it doesn’t authorize any new action on evictions or foreclosures at all. Rather it instructs the leaders of several agencies, namely the U.S. Department of Housing and Urban Development, to look again at existing funds or options for protecting renters, without promising any specific relief. (…) Diane Yentel, the president of the National Low Income Housing Coalition, described Trump’s new executive order as an “empty shell of a promise” in an email. (…)
Trump Says He’s ‘Seriously’ Considering Capital Gains Tax Cut
President Donald Trump said he’s “very seriously” considering a capital gains tax cut, a move he decided against last September after saying it wouldn’t do enough to help the middle class.
“We’re looking at also considering a capital gains tax cut, which would create a lot more jobs,” Trump said Monday at a White House news conference.
The president can’t unilaterally cut the 20% long-term capital gains rate without Congress, but some advisers tell him he could issue an executive order that would slash tax bills for investors when they sell assets. The move, known as indexing capital gains to inflation, adjusts the original purchase price of an asset when it is sold so no tax is paid on appreciation tied to inflation.
Revamping capital gains taxes through a rule or executive order likely would face legal challenges, a concern that reportedly prompted former President George H.W. Bush’s administration to drop a similar plan. (…)
The White House seems to be in “whatever-it-takes” mode. Hence:
- Wall Street stocks poised to open near all-time peak Global equities boosted by vaccine hopes and optimism over further US fiscal stimulus
A survey released today by the NYC Hospitality Alliance details the latest data on the state of New York City’s devastated hospitality industry.
The survey of nearly 500 owners and operators of restaurants, bars and nightlife establishments across the city found that a growing number of businesses could not pay rent in July. 83 percent of businesses could not pay full rent in July and 37 percent of businesses reported paying no rent at all.
Adding to the challenges that restaurants, bars and nightlife venues face are inflexible landlords, some of whom have their own set of difficulties. 71 percent of landlords would not waive portions of rent due to COVID-19, 61 percent would not defer rent payments and 90 percent of landlords would not formally renegotiate leases.
UK sheds nearly 750,000 jobs during coronavirus crisis Number claiming out-of-work benefits rises to 2.7m in July, more than double the pre-pandemic level
(…) Total pay, including bonuses, was 1.2 per cent lower in the three months to June than a year earlier, while the total weekly hours worked in the UK fell by a record amount, to almost a fifth below pre-lockdown levels. (…)
China’s Strong July Auto Sales Fuel Hopes for Growth Chinese consumers flocked back to auto dealerships in July, boosting car makers’ hopes of returning to growth in the second half of the year and signaling a broader rebound in the world’s second-largest economy.
Retail passenger-car sales increased 7.7% in July from a year earlier, to 1.6 million units, the China Passenger Car Association said Tuesday, marking the strongest month of sales growth by percentage in more than two years. (…) The Chinese auto market now looks to be picking up, thanks to a combination of government incentives and bargain prices from dealerships eager to move vehicles off the lot. (…)
In July, the growth in wholesale sales continued to outstrip that of retail sales, rising 16.4% from a year earlier, according to the China Association of Automobile Manufacturers. The government-backed body warned Tuesday of excessive inventory levels as dealers restock with vehicles for which there is so far insufficient demand. (…) Second-half sales are now on track to increase roughly 4% from a year earlier, resulting in a full-year sales decline of roughly 10% for 2020. (…)
Robinhood Blows Past Rivals in Record Retail Trading Year
The company, which runs a no-fee trading app in the U.S. that’s drawing millions of new users as well as a few critics, said that daily average revenue trades — known as DARTs — were 4.31 million in June. That’s about four times the number of fee-generating trades at E*Trade Financial Corp. for the same period, and higher than all of its publicly traded rivals. Robinhood is among brokers that still use the DART term even though they don’t charge fees. (…)
“It’s surprising that this organization’s only seven years old and has surpassed Ameritrade, which was founded in the mid ‘70s,” Larry Tabb, Bloomberg Intelligence’s head of Market Structure Research, said in an interview. “It’s really difficult to analyze information on a mobile screen.” (…)
FYI, Robinhood is mostly used by millennials to trade stocks and cryptocurrency and more than half of Robinhood customers are opening their first brokerage account, and the median customer age is 31 years old, according to the company. (CNBC)
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Millennials Slammed by Second Financial Crisis Fall Even Further Behind The economic fallout of the Covid pandemic has been harder on millennials, who are already indebted and a step behind on the career ladder from the last financial crisis. This second pummeling could keep them from accruing the wealth of older generations.
FYI, Nielsen Media Research has defined millennials as adults between the ages of 22 and 38 years old in 2019.