The number of deaths from COVID-19, the illness caused by the novel coronavirus, rose above 250,000 on Tuesday, amid news reports that internal projections used by White House officials were forecasting a jump in U.S. cases to come, even as President Donald Trump urges U.S. states to reopen.
The New York Times said an internal document it obtained on Monday showed projections by agencies, including the Centers for Disease Control and Prevention and the Federal Emergency Management Agency, forecast about 200,00 new cases a day by the end of May, up from about 30,000 a day currently. The projections suggest the death toll could be about 3,000 daily on June 1, nearly double the current level.
Another model from the Institute for Health Metrics and Evaluation that is also tracked by White House officials predicts the death toll will rise to more than 134,000 by early August, more than doubling its earlier forecasts for about 60,000 total deaths. To date, more than 69,000 Americans have died of COVID-19, according to data aggregated by Johns Hopkins University.
In another grim development, a new study led by scientists at Los Alamos National Laboratory identified a new strain of the coronavirus that appears to be more contagious than the versions that spread at the start of the outbreak and that may make patients vulnerable to a second infection, as the Los Angeles Times reported.
For now the study is posted on BioRxiv, a site used by researchers as a preliminary landing place before their work can be peer reviewed and is not considered factual. The new strain first appeared in Europe in February, then moved to the East Coast and became the dominant strain across the world in mid-March, the scientists wrote.
Separately, researchers in Arizona have identified a mutation in samples obtained from patients who have tested positive for COVID-19 that may indicate the virus is weakening and potentially mirroring a similar genetic mutation that occurred during the severe acute respiratory syndrome (SARS) outbreak in 2003 and 2004, according to an accepted manuscript from a study published in the Journal of Virology on May 1.
The news comes as states continue with reopening measures, including some parts of the U.S. that are still seeing increases in cases. Trump has consistently pushed for states to reopen against the advice of health-care officials who are recommending continued social distancing and other public-safety measures.
Indiana, Iowa, Kansas, Minnesota, Nebraska, Tennessee and Texas have all allowed some businesses to reopen despite seeing increasing cases, according to a New York Times database.
California Gov. Gavin Newsom said the Golden State will start to lift restrictions on Friday that will allow certain businesses to reopen, including clothing stores, bookstores, florists and sporting-goods stores. Consumers will be asked to continue to take precautions such as social-distancing measures.
New York Gov. Andrew Cuomo has laid out seven criteria each region must meet in order to phase in reopening on May 15, when the stay-at-home mandate will expire. These include 14 consecutive days of declining hospitalizations and deaths on a three-day rolling average; fewer than two new hospitalizations per 100,000 residents; 30% of hospital beds and specifically intensive-care beds available; 30 per 1,000 residents tested on a seven-day average; and at least 30 contact traces per 100,000 residents.
A survey conducted by the Washington Post and University of Maryland found the great majority of Americans are opposed to reopening businesses that require close contact among people, such as nail salons and dine-in restaurants. The poll found 82% of those surveyed were against reopening cinemas, and 63% said they were worried about becoming infected.
There are now 3.6 million cases of COVID-19 globally and 252,151 people have died, the Johns Hopkins data show. At least 1.2 million people have recovered.
The U.S. has the highest case tally at 1.18 million and the highest death toll at 69,079.
Spain has the highest number of cases in Europe at 218,011, with 25,428 deaths. Italy has had 211,938 cases and 29,079 deaths. The U.K. has 191,832 cases and 28,809 deaths.
France has 169,583 cases and 25,204 deaths. Germany has 166,199 cases and 6,993 deaths. Russia has 155,370 cases and 1,451 deaths after reporting 10,000 new cases overnight.
Turkey has 127,659 cases and 3,461 deaths, followed by Brazil with 108,620 cases and 7,367 deaths. Iran has 99,970 cases and 6,340 deaths. China, where the disease was first reported late last year, has 83,966 cases and 4,637 deaths.
There was grim news from the U.K.’s Office for National Statistics, which said Tuesday the death toll from COVID-19 has climbed above 32,000, placing it above Italy and making the U.K. the worst-hit in Europe by the deadly illness, the Guardian reported.
The statistics office said it registered 29,648 deaths in England and Wales through May 2 with COVID-19 on the death certificate. Add in the deaths in Scotland and Northern Ireland and the death tally comes to 32,313, according to calculations made by Reuters. (The U.K. numbers have not yet been updated in the Johns Hopkins data.)
In Spain, restrictions that were lifted over the weekend brought hundreds out to the streets and led to 119 arrests and 16,490 fines, as MarketWatch’s Barbara Kollmeyer reported from Madrid.
French doctors have discovered a case of COVID-19 that dates back to December, about a month before an outbreak was confirmed in Europe, Agence France-Presse reported. The discovery came after doctors retested a patient’s samples and suggests the illness was in that country at least a month before China had alerted the World Health Organization about its own outbreak.
What’s the latest medical news?
The U.S.’s Food and Drug Administration changed its emergency-use policy for antibody tests, saying that manufacturers now have to seek regulatory authorization. The tests identify COVID-19 antibodies, which indicate a past infection by the novel coronavirus and are believed to provide some level of immunity to future infections; some experts say that widespread antibody testing is needed to reopen the economy.
The FDA had announced on March 16 that antibody tests could be performed in some labs without an emergency use authorization (EUA), which is a type of regulatory OK granted during the pandemic — it is not a full FDA approval. The makers of more than 200 tests have sought an EUA, and at least 12 have been granted one, including Abbott Laboratories Inc. ABT, +2.91% and Roche Holding AG ROG, +0.84%.
Concerns about the quality and marketing claims for some tests that have not received an EUA created concern at the FDA.
“The careful balancing of risks and benefits has shifted from where it was in mid-March,” the regulator said.
Test developers must now submit an EUA request with validation data within 10 days of an FDA notification, and these developers will follow a different submission template than the labs that are also developing antibody tests for authorization.
“Flexibility never meant we would allow fraud,” the FDA said Monday. “We, unfortunately, see unscrupulous actors marketing fraudulent test kits and using the pandemic as an opportunity to take advantage of Americans’ anxiety.”
The companies said Stage 1 of the trial in the U.S. will enroll up to 360 healthy people in the 18-to-55 and 65-to-85 age cohorts. Pfizer and BioNTech said the development program includes four vaccine candidates.
“We are optimistic that advancing multiple vaccine candidates into human trials will allow us to identify the safest, most effective vaccination options against COVID-19,” said BioNTech Chief Executive Ugur Sahin.
What’s the economy saying?
The latest data showed the continued pain the pandemic is causing for the economy. The U.S.trade deficit widened by almost 12% in March as the coronavirus pandemic grounded international flights, froze the global tourism industry, and caused massive disruptions in the exchange of goods such as new cars and iPhones, as MarketWatch’s Jeffry Bartash reported.
Imports fell 6.2%, but U.S. exports tumbled an even deeper 9.6% to cause the trade gap to rise. It’s the biggest monthly decline in exports ever recorded. The U.S. deficit rose to $44.4 billion in March from $39.8 billion in February. Economists polled by MarketWatch had forecast a $44.2 billion shortfall.
“Exports and imports will continue to be impacted by weaker global growth and failing demand at home and abroad in response to the coronavirus,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
Separately, the Institute for Supply Management’s service index fell to 41.6% in April from 52.5% in March, breaking a string of 112 straight months of positive readings. Any number over 50% is considered a sign of growth; readings below 50% signal contraction or even recession.
What are companies saying?
Companies reporting first-quarter earnings continued to update investors on how the pandemic is affecting operations. Many missed even lowered earnings estimates and offered details of their liquidity position.
Here are the latest things companies have said about COVID-19
• AMC Networks Inc. AMCX, +2.25% posted weaker-than-expected earnings for the first quarter as the pandemic boosted viewership but hurt ad revenues. “In what has been a unique operating environment, AMC Networks continues to generate significant levels of free cash flow and remains well capitalized with a strong balance sheet and strong liquidity,” Chief Executive Josh Sapan said in a statement. The company had access to $1.2 billion of cash and cash equivalents as of March 31, it has $704 million of cash and cash equivalents and $500 million undrawn on a revolving credit facility. It has no significant debt maturities in 2020 or 2021. The company’s networks — AMC, BBC America, IFC, SundanceTV and WE tv networks (it also owns TV production company AMC Studios) — saw a significant increase in viewership as of mid-March amid stay-at-home orders in many regions. However, it also took a hit to ad sales and had to suspend production, which has led to delays in creating new programming.
• Avis Budget Group Inc. CAR, -0.21% reported a narrower-than-expected adjusted first-quarter loss but said it expects April and May revenue to be 80% lower as the shutdowns due to the pandemic continue to crimp leisure and business car renting. The car rental company had available liquidity of $1.6 billion as of late March and no meaningful debt maturities until 2023. After the revenue plunge for April and May, Avis anticipates a “gradual recovery” in June and “improving thereafter, as shelter in place restrictions are lifted and leisure travel begins to resume. Our current reservations show improvement in June and sequentially increase over the balance of the summer.”
• Hertz Global Holdings Inc. HTZ, -16.01% has hired an additional adviser to help with a forthcoming bankruptcy filing, the Wall Street Journal reported. Amid a drop in demand during the pandemic, Hertz has engaged FTI Consulting Inc. to advise it on efforts to streamline operations ahead of a filing, the report said, citing people described as familiar with the matter. The newspaper reported last month that Hertz had hired lawyers and investment bankers as advisers as it tries to renegotiate its $17 billion of debt.
• Bloomin’ Brands Inc. BLMN, -5.95% announced preliminary first-quarter losses totaling 44 cents per share and adjusted EPS of 14 cents, below the FactSet consensus for 33 cents. U.S. comparable-restaurant sales improved from a 69.1% decline for the week ending March 22 to a 48% decline for the week ending May 3. For the quarter ending March 29, U.S. comparable-restaurant sales were down 10.4%, with Outback Steakhouse down 9.5%, Carrabba’s Italian Grill down 8.7% and Bonefish Grill down 13.9%. Bloomin’ Brands has tripled its off-premise business after dining rooms shuttered due to the pandemic, and the weekly cash burn rate improved to $6 million to $8 million from $8 million to $10 million. As of May 4, the company had $270 million cash on hand. Bloomin’ Brands expects to have 336 restaurants open for business by the end of Tuesday with limited seating capacity across multiple states, Chief Executive David Deno said in a statement. For the week ending May 3, the company had 23 Outbacks open with comparable-restaurant sales falling 17% year-over-year. “We are encouraged by these results,” Deno said. Bloomin’ Brands will report first-quarter results on May 8.
• L Brands Inc.’s LB, -1.49% deal with Sycamore Partners for Victoria’s Secret is off “by mutual agreement” and the company is preparing Victoria’s Secret to operate as a separate, stand-alone company. Private-equity firm Sycamore had intended to buy a 55% stake in Victoria’s Secret for $525 million in a deal announced in February. L Brands and Sycamore agreed to settle all pending litigation. L Brands remains “committed” to establish Bath & Body Works as a public company. L Brands also said previously announced board and leadership changes will become effective May 14. The changes include Leslie Wexner stepping down as chief executive officer and board chairman. Wexner will remain on the board as chairman emeritus. Andrew Meslow, the CEO of Bath & Body Works, will become CEO of L Brands and join the board. The board also has appointed Stuart Burgdoerfer, currently L Brands’ chief financial officer, as interim CEO of Victoria’s Secret, effective immediately.
• Lumentum Holdings Inc. LITE, +5.73% beat third-quarter profit expectations but missed on revenue and provided a downbeat outlook, as the pandemic limited the ability to supply products to customers. “As the outbreak spread outside of China late in the quarter, we experienced supply disruptions in excess of our prior assumptions,” the Apple supplier said in a statement. For the fourth quarter, the company expects adjusted EPS of 70 cents to 90 cents, below the FactSet consensus of $1.05, and revenue of $325 million to $365 million, below expectations of $411 million.
• Marathon Petroleum Corp. MPC, +0.33% posted a narrower-than-expected loss for the first quarter, but revenue fell short of estimates. “Recent global events, including the COVID-19 pandemic and oil price tensions, have been disruptive to the personal and professional lives of many and significantly impacted demand for the transportation fuels we manufacture,” Chief Executive Michael J. Hennigan said in a statement. The company is cutting its 2020 capital-expenditures budget by $1.4 billion, or about 30%, temporarily suspending its share buyback program and boosting liquidity by tapping credit facilities. The company issued $2.5 billion in senior notes in April and secured an additional $1 billion revolving credit facility. As of May 5, Marathon had about $7.5 billion in total credit capacity and about $6.75 billion in available borrowing capacity.
• Marriott International Inc. MAR, +2.66% has raised $920 million by signing amendments to co-brand credit cards with J.P. Morgan Chase & Co. JPM, +1.40% and American Express Co. AXP, +1.66%. Marriott will raise $570 million from Chase and $350 million from American Express, according to a filing with the Securities and Exchange Commission. Marriott said it would record these amendments as deferred revenue and make the cash available for general corporate purposes. Marriott has terminated the $1.5 billion 364-day revolving credit facility commitment it announced on April 14, the capacity of which was substantially reduced as a result of the Series EE senior notes offering the company completed on April 16.
• Starbucks Corp. SBUX, +2.24% plans to reopen more than 85% of its U.S. stores by the end of this week. Starbucks initially won’t allow dine-in service but will provide pickup and delivery in its stores, as well as drive-through. By early June, the Seattle-based company expects to have more than 90% of its stores open with limited hours. It followed the same return-to-operations plan in China. The company expects mobile pay to play an even more prominent role in transactions.
• Norwegian Cruise Line Holdings Ltd. ‘s NCLH, -20.94% subsidiary NCL Corp. is proposing to sell $650 million in exchangeable senior notes due 2024 in a private offering. The notes will be convertible to Series A preference shares of NCLC, which will be exchangeable into a number of Norwegian Cruise ordinary shares. NCLC is also proposing to sell $600 million in senior secured notes due 2024 in a private offering. Norwegian Cruise disclosed that the fact that plans to obtain additional financing had not been completed raised “substantial doubt about the company’s ability to continue as a going concern,” given the “significant financial and operational impacts” of the pandemic. Norwegian will furlough 20% of its shoreside employees through July 31, while shoreside employees will have shortened work weeks with a commensurate 20% salary cut at least through June 22. The cruise operator has identified about $515 million of capital expenditure reductions. As of March 31, the company said it was in compliance will all of its debt covenants.
• Tenet Healthcare Corp. THC, +9.63% reported better-than-expected first-quarter profit but fell short on revenue. The hospital operator said that as a result of government orders to limit non-essential activities, patient volumes for emergency room visits, admission and other elective procedures declined significantly beginning in mid-March. Tenet took steps to acquire personal protective equipment and other supplies, but encountered significantly higher prices. The company believes it has enough supplies. Tenet has reduced planned capital expenditures by $300 million, reducing discretionary spending and furloughing employees due to the lower patient volumes. Tenet had $2.2 billion in cash as of May 1 and has received $1.5 billion in advanced Medicare payments, which will have to be repaid within the next year, and a $345 million grant from the Coronavirus Aid, Relief and Economic Security Act.
• Wayfair Inc. W, +23.30% reported first-quarter losses that deepened versus last year, but beat estimates on an adjusted basis. Revenue was $2.33 billion, up from $1.94 billion last year and ahead of the $2.31 billion FactSet consensus. “Millions of new shoppers have discovered Wayfair while they shelter in place at home, and we are seeing strong acceleration in new and repeat customer orders across almost all classes of goods and across all regions,” said Niraj Shah, chief executive of Wayfair, in a statement. The number of active customers increased 28.6% year-over-year to 21.1 million as of March 31. At the end of the quarter, Wayfair had cash and cash equivalents of $891 million.
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