Economic News From Last Week

July 8 – Reuters (Gayle Issa): 

“Global coronavirus cases exceeded 12 million on Wednesday…, 

as evidence mounts of the airborne spread of the disease that has killed more than half a million people in seven months. 

The number of cases is triple that of severe influenza illnesses recorded annually, according to the World Health Organization.”

July 8 – AFP (Patrick Galey): 

“Potentially fatal COVID-19 complications in the brain including delirium, nerve damage and stroke may be more common than initially thought, a team of British-based doctors warned… 

Severe COVID-19 infections are known to put patients at risk of neurological complications, but research led by University College London suggests serious problems can occur even in individuals with mild cases of the virus. The team looked at the neurological symptoms of 43 patients hospitalised with either confirmed or suspected COVID-19. They found 10 cases of temporary brain dysfunction, 12 cases of brain inflammation, eight strokes and eight cases of nerve damage. Most of those patients with inflammation were diagnosed with acute disseminated encephalomyelitis (ADEM) -- a rare condition typically seen in children after viral infections.”

July 6 – CNBC (Noah Higgins-Dunn): 

“Texas had more than 8,000 hospitalized Covid-19 patients on Sunday, a record number of hospitalizations and one of the highest in the country… 

The number of people hospitalized with Covid-19 grew by 5% or more Sunday in 23 states, based on a seven-day moving average…”

July 6 – CNBC (Chloe Taylor): 

“It is not a ‘safe bet’ to rely on immunity to Covid-19 as a strategy for coping with the pandemic, one expert has warned, adding that herd immunity strategies were ‘probably never going to work.’

 Speaking… on CNBC…, Danny Altmann, professor of immunology at Imperial College London, said that in towns and cities where there had been coronavirus infections, only 10% to 15% of the population was likely to be immune. ‘And immunity to this thing looks rather fragile — it looks like some people might have antibodies for a few months and then it might wane, so it’s not looking like a safe bet… It’s a very deceitful virus and immunity to it is very confusing and rather short-lived.’”

July 7 – Financial Times (Colby Smith and Eric Platt): 

“Investors are betting on big swings in US stock prices, even as benchmark equity indices push steadily higher and darlings like Tesla and Amazon surge to new records. 

The Cboe’s Vix index of equity market volatility, often referred to as Wall Street’s fear gauge, remains 41% above its historic average at nearly 28. Another longer-term measure of US stock volatility is 50% above its long-term average, according to the Cboe.”

July 9 – Bloomberg (Theophilos Argitis, Esteban Duarte and Kait Bolongaro):

“Justin Trudeau’s government made every effort… to convince Canadians the country can afford a deficit that will soar to 16% of economic output this year. 

Its actions suggest there’s some worry. In the same budget update that forecast a C$343 billion ($254bn) deficit, Finance Minister Bill Morneau announced a significant shift in strategy toward issuing longer-dated bonds… The idea is to lock in as debt at current borrowing costs for as long as possible, to ensure public debt charges don’t surge in the future. With federal debt surpassing C$1 trillion for the first time ever, the risk is real.”

July 6 – Reuters (Michelle Price, David Lawder and Lawrence Delevingne): 

“A high-profile pandemic aid program protected about 51.1 million American jobs, the Trump administration said…, as it revealed how $521.4 billion in taxpayer cash was injected into small businesses but also into the pockets of the rich and famous… 

Those include several firms that lobby on public policy, such as Wiley Rein LLP and APCO Worldwide, as well as prominent law firms like Kasowitz Benson Torres LLP, which has represented President Donald Trump, and Boies Schiller Flexner LLP.”

July 6 – Associated Press: 

“The financial services industry received roughly $27 billion from the Paycheck Protection Program, the coronavirus-relief fund aimed at helping small businesses… 

The list of borrowers includes a handful of banks, but the money mostly when to securities brokerages, financial advisers and hedge funds. Real estate investment companies, which are grouped in with other financial services as part of the data, were also a big recipient of funds.”

July 6 – Financial Times (James Politi): 

“A senior Federal Reserve official has warned that the rebound in the world’s largest economy is in danger of stalling as a result of the recent spike in coronavirus infections... 

Raphael Bostic, the president of the Federal Reserve Bank of Atlanta… said high-frequency data had shown a ‘leveling off’ of economic activity both in terms of business openings and mobility.”

July 9 – Reuters (Lucia Mutikani): 

“New applications for U.S. jobless benefits fell last week, but a record 32.9 million Americans were collecting unemployment checks in the third week of June, 

suggesting the labor market was struggling to claw out of the COVID-19 pandemic slump… Initial claims for state unemployment benefits dropped 99,000 to a seasonally adjusted 1.314 million for the week ended July 4. That was the 14th straight weekly decline. Economists polled by Reuters had forecast 1.375 million applications in the latest week.”

July 8 – Associated Press (Sarah Skidmore Sell): 

“People who rent have largely been able to survive the initial months of the pandemic helped by unemployment and federal relief checks. But the extra $600 in unemployment benefits ceases at the end of July and local eviction moratoriums are expiring. There is no agreement between the White House and Congress on a second federal relief package. 

More broadly, there are fewer supports in place for renters than for homeowners."

July 8 – Wall Street Journal (Karen Langley): 

“U.S. companies scrambling to withstand the coronavirus pandemic unveiled in the second quarter their steepest dividend cuts since 2009, though the pace of cuts appears to have slowed. 

Shareholders were notified of a net $42.5 billion reduction in dividends on common stock in the second quarter, according to S&P Dow Jones Indices… The analysis excluded companies with market values of less than $25 million. The net reduction is the largest since the first quarter of 2009, when the total was $43.8 billion.”

July 8 – Wall Street Journal (David Harrison): 

“State and local governments from Georgia to California are cutting money for schools, universities and other services as the coronavirus-induced recession wreaks havoc on their finances. 

Widespread job losses and closed businesses have reduced revenue from sales and income taxes, forcing officials to make agonizing choices in budgets for the new fiscal year, which started July 1 in much of the country. Governments have cut 1.5 million jobs since March, mostly in education, and more reductions are likely barring a quick economic recovery.”

July 8 – Reuters (Tracy Rucinski): 

“United Airlines said… it was preparing to send notices of potential furloughs to 36,000 U.S.-based frontline employees, or about 45% of staff, 

as travel demand hit by the coronavirus pandemic struggles to recover… The… airline continues to burn through about $40 million of cash every day, with a number of efforts to cut costs and raise liquidity failing to compensate for the drastic drop-off in travel…”

July 8 – Bloomberg (Oshrat Carmiel): 

“Manhattan’s apartment-vacancy rate in June rose to the highest on record. Available listings surged 85% from a year earlier to 10,789 -- an all-time high for a single month, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said… The median rent slid 6.6% to $3,242, the first decline in 18 months and the biggest in data going back to October 2011…”

July 8 – CNBC (Alicia Adamczyk):

“As the economic fallout from the coronavirus pandemic continues, almost one-third of U.S. households, 32%, have not made their full housing payments for July yet, according to a survey by Apartment List… 

About 19% of Americans made no housing payment at all during the first week of the month, and 13% paid only a portion of their rent or mortgage. 

That’s the fourth month in a row that a ‘historically high’ number of households were unable to pay their housing bill on time and in full, up from 30% in June and 31% in May.”

July 6 – Financial Times (James Kynge): 

“In 2015: China's stock price surges that are not accompanied by climbing industrial profits can end in tears. 

Back then, official cheerleading and easy money bid up the main Shanghai stock index by about 150% between June 2014 and June 2015. But then it collapsed and within less than a month it had slumped by 32%.”

July 7 – Reuters (Philip Blenkinsop and Francesco Guarascio): 

“The euro zone economy will drop deeper into recession this year and rebound less steeply in 2021 than previously thought, the European Commission forecast…, 

with France, Italy and Spain struggling the most due to the COVID-19 pandemic… The EU executive said the 19-nation single currency area would contract by a record 8.7% this year before growing by 6.1% in 2021. In early May, the Commission had forecast a 2020 downturn of 7.7% and a 2021 rebound of 6.3%.”

July 6 – Reuters (Daniel Leussink, Kaori Kaneko and Leika Kihara): 

“Japan’s household spending fell at the fastest pace on record in May, as consumers heeded authorities’ calls to stay home to contain the coronavirus pandemic, 

pushing the world’s third-largest economy deeper into decline. Wages and a gauge of economic activity also tanked in the month, keeping pressure on policymakers to revive business and consumer confidence. Household spending slumped 16.2% in May from a year earlier…”

July 7 – Reuters (Leika Kihara):

 “Japanese bank lending grew at the fastest annual pace on record in June as companies continued to hoard cash to tide over the sweeping impact of the coronavirus pandemic, central bank data showed… 

Deposits parked at financial institutions also surged to an all-time high as big companies parked funds they borrowed as a precaution to meet immediate cash needs… Total bank lending by banks and ‘shinkin’ credit unions rose 6.2% in June from a year earlier to a record 570.1 trillion yen ($5.3 trillion), accelerating from a 4.8% gain in May…”