(Bloomberg) — The number of new coronavirus cases in Germany stayed close to a three-week low as that country begins gradually lifting pandemic-related lockdown measures.
Corporate earnings reports are showing a wide range of effects. Roche Holding AG got a bump as the drugmaker works on developing tests for Covid-19, and there’s been explosive growth for Netflix Inc. as locked-down families binge-watch its programs. Chipotle Mexican Grill Inc. is optimistic about stimulus cash and mobile-ordering platforms offering hope for restaurants. But banks are preparing for a surge in bad loans.
On the stimulus front, the U.S. Senate passed a $484 billion pandemic relief package that the House could take it up as soon as Thursday. South Korea is preparing a third extra budget. European Central Bank policy makers will hold a call Wednesday, where they may discuss new help for lenders.
Key Developments
Virus Tracker: Cases top 2.5 million; deaths exceed 175,000China’s coronavirus handling aggravates European diplomatsFar-right social media helps galvanize U.S. quarantine protestsIndia’s young population could make herd immunity work thereIsraeli investors proposed a build-it-yourself breathing machine
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China Considers Late May for Key Annual Legislative Gathering (2:31 p.m. HK)
China is considering holding its highest-profile annual political meeting in late May, according to people familiar with the matter, after it was postponed for the first time in decades amid the coronavirus pandemic.
The gathering of the National People’s Congress, usually runs for about two weeks in Beijing and is attended by President Xi Jinping and other top leaders. At least one set of dates being considered is May 23-30, according to the people, who asked not to be identified.
The NPC is the venue for announcing key annual economic targets. This year’s goal’s will be closely watched after the pandemic pushed China’s economy into its first contraction in decades in the first quarter.
The Pandemic May Set Back 5G Rollouts in Europe, Ericsson Says (1:31 p.m. HK)
Europe risks falling further behind on fifth-generation mobile networks as phone carriers postpone upgrades to the latest cellular technology due to coronavirus lockdowns, Ericsson AB said.
The pandemic is already making it harder for the Ericsson, a key communications equipment supplier, to deliver its services, though this had only a limited effect on operating income and cashflow during the first quarter, the company said in a statement.
First U.S. Virus Death Came Weeks Earlier Than Thought, Report Says (1:12 p.m. HK)
The first U.S. coronavirus death appeared to have come weeks before the Feb. 29 date that officials have pinpointed, according to autopsy results of two cases released by Santa Clara County, in California, Axios reported.
Samples from two people who died on Feb. 6 and Feb. 17 were sent to the Centers for Disease Control and Prevention, which confirmed they both tested positive for the virus that causes COVID-19, according to a statement from the county. That’s earlier than the previously-thought first-known death from the virus — a Washington state patient who died Feb. 29. The first confirmed U.S. case arrived in Washington state from Wuhan on Jan. 15, according to the CDC.
Taiwan Navy Ship Outbreak May Threaten Success Against Virus (12:12 p.m. HK)
A coronavirus outbreak on one of Taiwan’s navy ships has raised concerns that a re-infection could threaten one of the world’s success stories in the fight against the pandemic.
Twenty-seven sailors on a navy-supply ship were confirmed to have the virus shortly after it returned from a visit to Palau this month. Taiwan’s defense minister apologized Tuesday night and said he was willing to resign if requested to do so by President Tsai Ing-wen. Tsai said Wednesday an investigation is under way and punishment will follow its completion.
South Korea Plans a Third Extra Budget to Address Coronavirus (10:51 a.m. HK)
South Korean President Moon Jae-in ordered the government to draw up third extra budget to help key industries suffering from coronavirus outbreak and to secure jobs.
A 40 trillion won ($32 billion) fund will be created to provide liquidity and payment guarantees to companies, Moon announced after leading emergency meetings on the economy on Wednesday. An existing program will be expanded by 35 trillion won, to help mom and pop stores, purchase corporate bonds and provide liquidity to companies with lower ratings. In addition, some 10 trillion won will be used to help stabilize employment.
China’s Banks Saw Surge in Bad Loans as Economy Contracted (10:36 a.m. HK)
Bad debt at Chinese banks climbed in the first quarter after the coronavirus outbreak brought the world’s second-largest economy to a standstill.
The non-performing loan ratio rose to 2.04% at the end of March, the China Banking and Insurance Regulatory Commission said on Wednesday. The ratio stood at 1.86% in December. Lenders delayed 880 billion yuan ($124 billion) in loan repayments for smaller businesses in the period, the regulator said at a press briefing in Beijing.
European banks are also bracing for a surge in troubled loans, along with a hit to trading revenue.
Tokyo Governor Considers Supermarket Restrictions to Curb Crowds (9:26 a.m. HK)
Tokyo Governor Yuriko Koike said the metropolitan government is considering measures to reduce crowding at supermarkets, which it believes poses a risk of spreading the coronavirus. Koike said Wednesday she wants to implement measures quickly, and will look at asking supermarkets to limit the number of customers that can enter at once or observe social distancing when lining up.
While Japan has thus far avoided the explosive surge in cases seen in other parts of the world, a continued steady rise over the last month forced the government to declare a state of emergency. The number of confirmed cases in Japan stood at 11,135 as of Wednesday morning, according to data collected by Johns Hopkins University and Bloomberg News.
Virus-Hit Companies Plan to Raise Cash from Markets (8:51 a.m. HK)
Macy’s is looking to raise as much as $5 billion in debt by using inventory as collateral for $3 billion, and real estate to bring in $1 billion to $2 billion, CNBC reported, citing unidentified people.
United Airlines Holdings Inc. and Delta Air Lines Inc. are in talks with banks on new debt issuance to further bolster liquidity and supplement cash to be raised from government loans, according to people with knowledge of the matter. For United, a debt sale would add to a planned equity raise for over $1 billion the company announced on Tuesday — the first stock offering by a major U.S. airline during the coronavirus pandemic.
Australia’s Bondi Beach to Reopen as Country Sees Slowdown in Cases (8:27 a.m. HK)
Sydney’s famous Bondi Beach will reopen next week for swimming and surfing. That’s after Australia’s government said Tuesday that lockdown measures have led to a “sustained and consolidated” slowdown in new coronavirus cases.
A month after being closed to the public, the local council announced it will lift the bans on Bondi and nearby Bronte and Tamarama beaches from next Tuesday, while limiting opening hours to weekdays between 7 a.m and 5 p.m, the Australian Broadcasting Corp. reported. Access will be restricted to water activities, with sunbathing and gathering on the sand still prohibited.
The country separately reported Wednesday that retail sales soared by the most on record in March, as households embarked on a buying frenzy led by massive purchases of toilet paper.
U.S. Health Official Sees Improvement in Metropolitan Areas (6:40 a.m. HK)
Almost all major U.S. metropolitan areas are seeing improvements in their outbreaks, said Deborah Birx, a top health official on the Trump administration’s coronavirus task force. She spoke after data showed that the nationwide infection tally had accelerated.
Cases appear to be flattening in areas including Chicago and Boston, while New Orleans is back to its baseline for infections, Birx said at the daily White House briefing. Philadelphia, Houston, Atlanta and Nashville are also among cities improving, she said. The Washington, D.C., region is one where “we don’t see a decline yet,” Birx said.
Hackers Target Top Officials at World Health Organization (6:31 a.m. HK)
Top officials at the World Health Organization are being targeted by hackers as they work on the global response to the coronavirus pandemic. The WHO’s security team has seen an increasing number of attempted cyber-attacks on the officials since mid-March, according to the organization’s chief information officer, Bernardo Mariano. WHO itself hasn’t been hacked, but targets have included WHO Director General Tedros Adhanom Ghebreyesus, as well as Bruce Aylward, a senior WHO envoy who led a Covid-19 response team in China.
Trump to Ask Big Companies to Repay Aid (6:15 a.m. HK)
President Donald Trump said he’ll ask larger companies to return money they accessed from the federal stimulus package because it was intended to help small businesses.
Speaking at the same press conference, Treasury Secretary Steven Mnuchin threatened “severe consequences” for those who take money from the program without meeting the criteria and fail to return it.
Trump also said Harvard University had received funds intended for small business and he would be asking the university to “pay it back.” A Harvard spokesperson denied the university had applied for or received such funds. Harvard said it got funds as part of the CARES Act Higher Education Emergency Relief Fund, and pledged to use all the money for students facing urgent financial needs due to the pandemic.
Senate Passes Third Relief Package (5:30 p.m. NY)
The U.S. Senate passed $484 billion in new pandemic relief funds Tuesday to bolster a tapped-out small business aid program, pay for coronavirus testing and help hospitals deluged by sick patients.
The legislation, which the House could take up as early as Thursday, includes $320 billion for the Paycheck Protection Program designed to help struggling small businesses keep their workers on the payroll. The program has already committed all of the $350 billion allocated when it was created just weeks ago.
President Donald Trump said he would sign the legislation and then turn to the next round of stimulus for an economy that has ground to a halt.
South Africa Sets Up Aid Package (5 p.m. NY)
South Africa’s government unveiled a 500 billion rand ($26 billion) package to shore up an economy and support those who’ve been worst affected by the pandemic.
The plan will be funded by reprioritizing 130 billion rand of expenditure from existing budgets, and borrowing from domestic and international lenders, President Cyril Ramaphosa said Tuesday in a televised address. There will be 200 billion rand in guarantees for banks to encourage them to lend, 100 billion-rand to protect and create jobs and an additional 50 billion rand for welfare grants for the poor and unemployed, he said.
South Africa has been relatively spared the worst of the ravages of the pandemic — it’s had 3,465 infections and 58 fatalities so far. Still, the central bank expects the economy to contract 6.1% this year.
Netflix, Chipotle Gain on Lockdown (4:50 p.m. NY)
Netflix Inc. added nearly twice as many subscribers as predicted in the first quarter, cementing its role as one of the rare companies to benefit from the global health crisis. Netflix added a record 15.8 million paid subscribers during the first quarter, almost double the 8.47 million forecast by Wall Street analysts. The company also clobbered its own forecast of 7 million, with droves of new customers binge-watching “Tiger King” or “Love Is Blind” to ride out the quarantine.
Chipotle’s loyalty program is helping it connect with customers as digital sales grew 80%. It’s had to temporarily close about 100 restaurants, primarily those inside malls and shopping centers, as well as some locations in Europe. It withdrew its earlier guidance for the fiscal year, citing the uncertainty related to the virus. The company has enough cash on hand for over a year, so it doesn’t plan to tap the government’s Paycheck Protection Program, it said in reporting first quarter results.
U.S. Confirmed Cases Rise 5.7% (4 p.m. NY)
U.S. cases rose 5.7% from the day before to 810,561, the biggest daily increase since April 10, according to data compiled by Johns Hopkins University and Bloomberg News. That topped Monday’s growth rate of 2.7% and the average daily increase of 4.4% over the past week.
In New York, the epicenter of the U.S. outbreak, cases rose 3.5%.New Jersey reported a one-day record of 379 new deaths, bringing total fatalities in the second hardest-hit state to 4,753. New Jersey cases rose 3.9%.California had a 7.4% increase in positive cases from Monday, Governor Gavin Newsom said. The state reported 60 deaths, a 5% increase. Hospitalizations climbed 3.3%, with intensive-care patients up 3.8%.Texas reported its first bump in new cases in five days, with a 38% increase to 738, according to the state’s health department. Total cases are now just under 22,000.Florida reported 27,495 cases, up 3.1%, from a day earlier. Deaths reached 839, an increase of 6.3%.
Panel Warns on Trump-Backed Drug Combo (2:28 p.m. NY)
A panel of medical experts convened by the U.S. National Institutes of Health recommended against the use of a drug combination touted by President Donald Trump for Covid-19 patients.
The NIH panel, made up of 50 doctors, pharmacy experts and government researchers and officials, specifically recommended against the use of the anti-malaria drug hydroxychloroquine in combination with the antibiotic azithromycin. The malaria pill can cause heart issues, and the NIH panel warned of the potential for harm from the combination.
Trump has repeatedly backed the use of the drugs on Twitter and at numerous briefings of the Coronavirus Task Force, though some medical experts in his administration have cautioned about the lack of evidence.
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