Coronavirus update: Global case tally nears 26 million, and experts are alarmed that U.S. isn’t joining WHO vaccine effort

The number of confirmed cases of the coronavirus that causes COVID-19 worldwide edged closer to 26 million on Wednesday, as experts sounded the alarm on the Trump administration’s decision not to participate in an international effort to develop and distribute a COVID-19 vaccine that is backed by the World Health Organization.

“The United States will continue to engage our international partners to ensure we defeat this virus, but we will not be constrained by multilateral organizations influenced by the corrupt World Health Organization and China,” said White House spokesman Judd Deere, as the Associated Press reported

Rep. Ami Bera, D-Calif., said the decision was shortsighted and will hamper the battle to end the pandemic.

“Joining COVAX is a simple measure to guarantee U.S. access to a vaccine — no matter who develops it first,” tweeted Bera, a medical doctor. “This go-it-alone approach leaves America at risk of not getting a vaccine.”

The news came at a time when public health experts are concerned that even the top U.S. health agencies are becoming increasingly politicized under the current administration as Trump consistently rejects the advice of the doctors and scientists that head them and applying pressure on them to act as he, and his political fortunes, would prefer. Trump has played down the pandemic from the outset, has been inconsistent in promoting the safety measures they insist are key to containing the spread and even accused the Food and Drug Administration of being part of the “deep state.”

The latest fear is that the U.S. is already pursuing an unstated herd-immunity policy, one that is backed by a new member of the White House pandemic team. The Washington Post reported this week that Dr. Scott Atlas, a neuroradiologist from Stanford’s Hoover Institution, is pushing for the U.S. to follow Sweden’s example, which has been widely criticized for a death toll that is far higher than that of neighboring countries. Atlas is not an infectious-disease expert or an epidemiologist.

Herd immunity is the notion that once a high proportion of a population has contracted or been vaccinated against an infectious disease, the likelihood of others in the population being infected is drastically reduced. Sweden did not lock down or even enforce restrictions on movement, relying instead on its citizens to responsibly follow safety guidelines. The country has recorded 57.08 deaths from COVID-19 per 100,000 people, just ahead of the U.S.’s 56.44 per 100,000 people, according to data aggregated by Johns Hopkins University. By comparison, neighboring Finland has had just 6.09 deaths per 100,000 people, the data show.

Gregg Gonsalves, assistant professor of epidemiology of microbial diseases at the Yale School of Public Health and co-director of the Global Health Justice Partnership, told Democracy Now on Monday that the U.S. is now ‘implicitly’ taking a herd-immunity tack.

“Many people in the public health community have watched this with horror, the sort of implicit herd-immunity strategy,” he said. The Trump administration realizes it is politically toxic, he said, “so they don’t want to use the phrase, but if it walks like a duck and quacks like a duck, it is a duck. And this is essentially a herd-immunity strategy.”

Gonsalves joined those criticizing the head of the FDA, Dr. Stephen Hahn, for kowtowing to the White House in granting an emergency-use authorization for the antimalarial drug hydroxychloroquine, which has been found ineffective and potentially dangerous in clinical trials, and more recently granting an EUA for convalescent plasma, which has not been fully tested, and announcing it in a televised briefing promoted by Trump as a major event.

A National Institutes of Health advisory group focused on COVID-19 said Tuesday that the efficacy and safety of convalescent plasma as a treatment for hospitalized coronavirus patients is still unknown, based on its assessment of published and unpublished clinical data.

Hahn said at the weekend that he would consider an EUA for a potential vaccine, even before the end of Phase 3 trials.

“The danger about the vaccine EUA before Phase 3 trial results are out is much more dire, because we give treatments to the sick and, in this case, to many people who are hospitalized,” said Gonsalves. “Vaccines go to millions of people. We depend on them to be effective, so people don’t get the wrong impression about what they should be doing in terms of social distancing and other behavior because they’re vaccinated.”

The newly influential Atlas is also skeptical of face masks and does not believe that children can pass on the virus, according to a New York Times report. It cited one expert, Dr. Carlos del Rio, an infectious-disease expert at Emory University, as saying Trump did not like the advice he was getting from long-standing public health experts including Dr. Anthony Fauci, head of the National Institute for Allergies and Infectious Diseases, and Dr. Deborah Birx, coordinator of the White House task force, while Atlas is saying what the president wants to hear.

In other news:

• Australia has entered its first recession almost 30 years because of the pandemic, the BBC reported on Wednesday. Australian GDP fell 7% in the April-through-June quarter, after a fall of 0.3% in the first quarter. An economy is deemed to be in recession once it suffers two consecutive quarters of negative growth. Australia was the only major economy to avoid recession during the 2008 financial crisis, when it was buoyed by demand from China for its commodities and natural resources.

• Also from Australia, former Prime Minister Tony Abbott is facing a backlash after he suggested that some elderly patients with the virus should be allowed to die, letting nature take its course. Abbott said politicians were not “thinking like health economists trained to pose uncomfortable questions about the level of deaths we might have to live with.” He made the comments in a speech at the Policy Exchange in London.

• A surge in news cases in South Korea is mostly being led by older people, the Guardian reported. More than 40% of the new cases in the country involve people who are older than 60, the paper said. The Korea Centers for Disease Control and Prevention reported 267 new cases on Tuesday, boosting the total to 20,449, with 326 total deaths. The latest rise in cases is pushing hospitals in Seoul to capacity with just 3% of beds now available for non-COVID critical cases, compared with 22% some 10 days ago.

• Italy’s former Prime Minister Silvio Berlusconi has tested positive for COVID-19, according to media reports. The 83-year old, who was PM in four different governments, is isolating at a home near Milan, according to a statement distributed by his staff. Berlusconi recently visited Sardinia, which experienced a spike in cases in August as tourists from across Italy arrived for vacation, Reuters reported.

• Germany is not going to have another lockdown in winter, according to its health minister, Jens Spahn, speaking at a press briefing. Spahn said experts are learning more about the virus every day and would not make the same decisions if cases spike again in the colder months. “We are learning where the dangers are greatest, sadly when we socialize and celebrate together,” he said, according to a Reuters report.

Latest tallies

There are now 25.8 million confirmed cases of COVID-19 worldwide, according to the Johns Hopkins data, and at least 858,661 people have died. More than 17 million people are confirmed to have tested positive and recovered.

The U.S. has the highest case tally at 6.09 million and the highest death toll at 185,123. Brazil is second with 3.9 million cases and 122,596 deaths.

India is third with 3.8 million cases and 66,333 deaths. Russia, Peru, South Africa and Colombia are next as measured by cases. Mexico has 606,036 cases and 65,241 deaths, the fourth highest in the world, followed by the U.K. with its 339,420 cases and 41,592 deaths, the most in Europe and fifth highest in the world.

China, where the illness was first reported late last year, says it has 89,942 confirmed cases and 4,726 deaths.

What’s the latest medical news?

A new study by Reykjavik-based deCODE Genetics, a subsidiary of the U.S. biotech company Amgen, with several hospitals, universities and health officials in Iceland, found that antibodies that people make to fight the new coronavirus last for at least four months after diagnosis and do not fade quickly, as some earlier reports suggested, the Associated Press reported.

The study was based on tests on more than 30,000 people in Iceland, a popular center for medical research because of its small and closely related population and a long history of keeping careful medical records.

Some smaller studies previously suggested that antibodies may disappear quickly and that some people with few or no symptoms may not make many at all.

The results don’t necessarily mean that all countries’ populations will be the same, or that every person has this sort of response. Other scientists recently documented cases where people have been reinfected with the coronavirus months after their first bout.

There is growing scientific consensus that steroids like dexamethasone should be the leading treatment option for severely ill COVID-19 patients, according to three new studies published Wednesday in the Journal of the American Medical Association, MarketWatch’s Jaimy Lee reported.

Researchers at the University of Oxford in the U.K. reported in mid-June that low doses of dexamethasone reduced deaths in hospitalized COVID-19 patients on ventilators by one-third or those receiving oxygen support by one-fifth. The new studies reinforce the benefits of steroids when treating some severely ill coronavirus patients.

“These trials and the meta-analysis have strengthened confidence, further defined the benefit, and shifted usual care of COVID-19-related ARDS to include corticosteroids,” researchers wrote in an accompanying editorial. “However, many clinically important questions remain.”

The World Health Organization on Wednesday recommended corticosteroids for patients with severe forms of COVID-19.

What’s the economy saying?

Private-sector companies added or regained 428,000 jobs in August, ADP said Wednesday, but the modest gain won’t dispel worries about a slowdown in hiring over the summer as new outbreaks threatened the economy’s recovery from the worst of the pandemic, MarketWatch’s Jeffry Bartash reported.

Wall Street economists had forecast an increase of 1 million private-sector jobs, according to Econoday.

The increase in hiring last month surpassed a revised job gain of 212,000 in July, the giant payroll processor said. Initially ADP had reported that 167,000 new jobs were created in that month.

The economy has recouped fewer than half of the 20 million–plus jobs lost in the early stages of the coronavirus pandemic.

What’s worse, a number of companies such as American Airlines

and MGM

have recently announced new layoffs with their businesses still struggling months after the pandemic began.

”The U.S. labor-market recovery continued at a fairly sluggish pace in August,” said senior economist Andrew Grantham of CIBC Economics.

A separate report found factory orders rose 6.4% in July in a third straight monthly increase, reflecting a rebound in manufacturing after the economy reopened. Economists polled by MarketWatch had forecast a 6.2% gain.

The Dow Jones Industrial Average

was up 240 points at midday, while the S&P 500

has added 29 points.

See: MarketWatch Coronavirus Recovery Tracker

What are companies saying?

• AMC Entertainment Holdings Inc.

expects to open 140 theaters by Thursday as one of the first big movies to release to theaters since the start of the pandemic drives demand for more theaters to open. The company will then have roughly 70% of its theater locations open, equating to approximately 420 locations. The move comes after the highly anticipated Christopher Nolan–helmed film “Tenet” had a strong international showing in its first weekend of release, grossing more than $50 million. “The first two weekends of operations have exceeded our expectations in terms of guests returning to the movies and in terms of their feedback about our extensive AMC Safe & Clean policies and procedures,” AMC Chief Executive Adam Aron said.

• Jack Daniel’s distiller Brown-Forman Corp.

reported first-fiscal-quarter results that beat expectations, although gross margin contracted. Sales slipped 2% to $753 million but were well above the FactSet consensus of $691.2 million. Reported U.S. sales rose 3% and developed international-market sales grew 13%, while emerging-market sales fell 20%. The Jack Daniel’s family of brands saw sales fall 2%. The company cited COVID-19-related restrictions as having led to a gross margin contracting to 61.7% from 64.9%. The company did not provide financial guidance given ongoing uncertainties related to the pandemic.

• Macy’s Inc.

reported a second-quarter loss that was much narrower than expected as net sales topped forecasts during the pandemic. The company swung to a net loss for the quarter, ending Aug. 1, of $431 million, or $1.39 a share, from net income of $86 million, or 28 cents a share, in the year-ago period. Excluding nonrecurring items, the adjusted per-share loss was 81 cents, compared with the FactSet loss consensus of $1.77. Sales dropped 35.8% to $3.56 billion, above the FactSet consensus of $3.50 billion, while same-store sales dropped 34.7% compared with expectations of an 18.6% decline. Digital sales increased 53% and penetrated 54% of same-store sales. The financal performance “was stronger than anticipated across all three brands: Macy’s, Bloomingdale’s and Bluemercury, driven largely by the sales recovery of our stores,” said Chief Executive Jeff Gennette. Inventory declined 29%. Macy’s did not provide financial guidance owing to uncertainties related to the pandemic.

• Vera Bradley Inc.

posted a surprise profit for the second quarter as the handbag and accessories retailer saw a boost in e-commerce and demand for face masks during the pandemic. Fort Wayne, Ind.–based Vera Bradley said it had net income of $7.2 million, or 42 cents a share, in the quarter, up from income of $5.9 million, or 17 cents a share, in the year-earlier period. The number includes $3.8 million in after-tax charges, $1.1 million for a change in its income-tax estimate, and a change in the numerator of the earnings-per-share calculation due to an accounting adjustment. It also includes income from Pura Vida, acquired last year. Adjusted per-share earnings came to 32 cents, well ahead of the FactSet consensus for a loss per share of 7 cents. Revenue rose 10% to $131.8 million, including Pura Vida. Without that revenue, Vera Bradley had revenue of $99 million. The FactSet consensus was for revenue of $100 million. “We significantly expanded our consolidated gross margin rate in the quarter through sales of cotton masks, product collaborations, careful inventory management, and tightly controlled promotional activity,” Chief Executive Rob Wallstrom said in a statement. The company is not providing guidance, again due to the uncertainty created by the pandemic.

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The Case for Hotel Stocks By

© Reuters.

By Peter Nurse and Yasin Ebrahim — Of all the sectors of the U.S. economy that were hit hard when Covid-19 arrived, very few fared as badly as hotels. After all, the pandemic forced thousands of holiday makers and business travelers to cancel bookings and stay at home to contain the spread of the deadly virus.

Marriott International (NASDAQ:), the hotel operator that also owns the Ritz-Carlton and St. Regis luxury brands, said that revenue per available room – a metric the industry uses to track performance – plummeted 90% worldwide by April.

Share prices were crushed.

But the worst may be behind the industry, with opportunities for investors to get in at a low point.’s Peter Nurse argues the bull case for hotels, while Yasin Ebrahim explains why the short-term looks painful for the sector. This is .

The Bull Case: Nowhere To Go But Up

There has been a bounce over the last couple of months as travel restrictions and social distancing measures eased. Still, Marriott’s stock is down over 30% year-to-date and Hilton Worldwide Holdings Inc (NYSE:) is 20% lower. This creates an opportunity.

“We expect the industry to enter a new multi-year growth cycle beginning early 2021; the best time to invest in lodging stocks is usually ahead of the start of the cycle and in the early innings of the cycle,” said analysts at Barclays in June, while upgrading both Marriott and Hilton Worldwide to overweight.

The situation has got better since then, but with only small improvements in the stock prices.

Marriott reported in its second-quarter report, released in early August, that its worldwide revenue per available room declined 70% for the month of July, an improvement from the drop of 90% in April. Hilton saw a fall of 81%.

“While we have a long journey in front of us, we are on the road to recovery and look forward to the opportunities ahead,” said Christopher J. Nassetta, president and chief executive officer of Hilton, during the company’s second-quarter earnings release.

Meanwhile, pharmaceutical companies around the world are striving night and day to create a vaccine or therapeutic treatments for the Covid-19 virus, which would enable society to return to something approaching normalcy.

Then there’s the potential for consolidation in the sector.

Over in Europe, a report emerged last week that Accor (PA:) was looking into a tie-up with U.K.-based InterContinental Hotels Group PLC (LON:), a potential deal that would create the world’s largest hotel operator.

Nothing has come from that report yet, but just the thought of it was enough to prompt share price gains for the two companies as investors appreciated the idea of increased market share and potential cost savings through economies of scale.

While cash burn remains an issue, the major operators in the U.S. could well be looking at M&A with valuations beaten down throughout the sector.

“While Covid-19 remains a significant challenge in the near term, the worst for revenue per available room growth looks to be in the past and near-term demand trends in several segments have improved, giving companies a chance to reduce cash burn and emerge in a better-than-feared financial position post-crisis,” added Barclays (LON:).

The Bear Case: The Deadbeat List of Short-Term Investments

Travel. . . Be it for business, or leisure, it’s the heartbeat of the hotel industry. So, it comes as little surprise that the latest findings, in the wake of the pandemic, suggests hotels belong on the deadbeat list of investments over the short-term.  

STR, a division of CoStar Group (NASDAQ:) that provides market data on the hotel industry worldwide, projected that U.S. revenue per available room, RevPAR, a key performance measure for the hotel industry, will decline 52.3% for 2020, while ADR and occupancy will slip 20.9% and 39.7%, respectively.

Like many other pandemic-hit industries, a coronavirus vaccine is the silver bullet to return a sense of normalcy, but putting money to work on hopes an effective vaccine will be found sooner rather later, raises eyebrows in the world of investing.

The commentary from key hotel operators in the industry also suggest a wait-and-see approach may be the way to go as the clouds of doom overshadowing the industry are unlikely to depart anytime soon.

Hilton Worldwide estimated earlier this week it would take at least two years for demand to rebound to pre-coronavirus levels.

There are those, however, who would argue that the worst of the pandemic is behind us, likely ushering a faster pace of reopenings globally, which would improve capacity, boosting growth for hotels.

But while new cases in the U.S. appear to be declining, others parts of the developed world is starting to see a resurgence in infections, raising fears that a second wave of the pandemic beckons.

A second wave could see the U.S. take measures to limit international travel, which could hurt growth and more than offset any potential boost in domestic travel.

“Normally, humans are driven by FOMO — the fear of missing out,” says Constance Hunter, chief economist at KPMG. “But with the virus, they’re driven by FOGO — the fear of going out. If we have a second wave, that could undermine confidence to the point that FOGO will rise, and then you’ll see these knock-on effects. The ability to create this firewall around the COVID-impacted economy will start to erode even further.”

There are just too many unknows over the short term, which is never good basis on which to invest – and the smart money like hedge funds are starting to circle.

Hedge funds are building up bearish positions on funds that have outsized exposure to hotel debt on expectations that bankruptcies loom. 

In the past month, CMBX 9,  a U.S. credit-derivatives index with outsized exposure to hotel debt, has seen “more selling pressure than any of the other CMBS indices,” said Dan McNamara, a principal at MP Securitized Credit Partners, a hedge fund focused on shorting commercial mortgage bonds. “That’s because some hedge funds are actively looking to play the short side on the Series 9 index due to its significant hotel exposure.”

With the odds stacked in a favor of a second wave rather than a vaccine, a short-term bet on hotels is for those who like to ride the wave of “hopium,” which more often has proved a quick way to lose money.



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Coronavirus update: Global case tally edges toward 24.5 million, U.S. nears 6 million and White House testing strategy is ‘disappointing’

The number of confirmed cases of the coronavirus illness COVID-19 worldwide edged closer to 24.5 million on Friday, while the U.S. tally neared 6 million, and the White House unveiled a plan to acquire 150 million rapid tests from Abbott that received emergency use authorization on Thursday.

The $5 test can produce a result in 15 minutes, potentially easing a bottleneck in testing that has left patients waiting up to two weeks for results, a delay that renders them useless. The government will pay $750 million for the tests. The move comes after days of confusing messages from the U.S. Centers for Disease Control and Prevention on testing, after it changed guidelines to exclude tests on asymptomatic patients, who are understood to play a key role in spreading the virus.

CDC head Robert Redfield tried to walk that change back on Thursday, after an outcry from doctors and scientists and a report that the change was pushed by White House officials and not CDC scientists. The wording of guidance offered on the CDC website has not changed though.

Tom Frieden, a former head of the CDC, told MSNBC that the agency has undermined trust in a way that is indefensible.

“The CDC is a technical institution and what we’ve heard from Washington is, ‘Oh these were decisions made at the White House Task Force’ — come again?” he said. “It’s very disappointing.”

The agency needs to change its website and be clear, he said.

Meanwhile, four people who attended the Republican National Convention in Charlotte this week have tested positive for COVID-19, the Washington Post reported, citing local county government officials. Scenes of Trump supporters gathering closely on the White House South Lawn for his acceptance speech late Thursday, most without face masks and failing to socially distance, have raised concerns that more people will test positive in the coming days.

In his speech, Trump promised his administration would produce a vaccine by year-end, even though Phase 3 trials have just begun and little data has been released yet. Trump also praised his government’s efforts to manage the pandemic, which has been widely criticized. He did not mention the latest U.S. death toll which rose above 180,000 on Thursday, according to data aggregated by Johns Hopkins University.

In other news:

• Concerns are growing that Louisiana, which had one of the most confirmed cases of COVID-19 before Hurricane Laura hit this week, will see a surge in new cases as many residents fleeing the massive storm left in crowded buses without face masks. Louisiana has more than 145,000 confirmed cases and 4,874 fatalities, the Johns Hopkins data shows. Its per capita death rate stands at 104 per 100,000 people, compared with the overall U.S. mortality rate of 55.27 per 100,000 people, which is fourth highest in the world after Peru, Chile and Brazil.

• Universities continue to count new infections at alarming rate, but one school says it avoided a major outbreak in one of its dorms, by testing sewage. The University of Arizona says when a sample tested positive, it was able to test all 311 people who lived and worked there and discovered two asymptomatic cases, who were quickly isolated, the Washington Post reported. Richard Carmona, a former U.S. Surgeon General who is working with the university on returning students safely, said the early detection allowed it to move quickly. “We jumped on it right away, tested those youngsters and got them the appropriate isolation where they needed to be,” he said at a news conference, the paper reported.

See now: Why some say shaming college students is ‘unfair and counterproductive’ to preventing COVID outbreaks

• The U.K. government is pushing for office workers to return to work, insisting workplaces are safe enough. Transport Minister Grant Schapps told Sky News that employers should have taken measures to ensure office spaces are safe. “The vast majority of employers just want to get their businesses back up and running, they want to do the right thing, and many will have found that actually home working can work for some of their employees,” he said, before adding that there was a limit to remote working.

• Indonesia reported more than 3,000 new cases on Friday for the first time since the start of the outbreak, the Guardian reported. The country of more than 300 million counted 105 deaths after outbreaks in three factories in West Java that the provincial governor blamed on workers not following safety measures. A plant owned by Japanese car maker Suzuki had 71 workers test positive, while more than 200 tested positive at a plant owned by Korea’s LG Electronics.

Latest tallies

The global tally for confirmed cases of COVID-19 stands at 24.49 million, while the number of deaths stands at 832,608, according to the Johns Hopkins data. Just over 16 million people have recovered.

U.S. cases stand at 5.87 million with 180,901 deaths.

Brazil has 3.76 million cases and 118,649 deaths. India has 3.4 million cases and 61,529 deaths. Russia has 977,730 cases and 16,866 deaths. Mexico has 579,914 cases, but 62,594 deaths, the third-highest in the world.

The U.K. has 332,511 cases and 41,564 fatalities, the highest in Europe and fifth highest in the world.

China, where the illness was first reported, has 89,827 cases and 4,718 deaths.

During her summer news conference, German Chancellor Angela Merkel expressed fears that the pandemic will worsen as temperatures drop. She and state governors have agreed to new measures to curb the spread of the illness, including a fine for not wearing a mask, according to the New York Times. Germany has had 240,598 confirmed cases and 9,291 deaths, according to Johns Hopkins.

What’s the latest medical news?

Moderna Inc.

failed to include government financial support data in patents filed over the last 10 years, in violation of a federal law approved in 1980, the Washington Post reported, citing a report from activist researchers. Moderna, which was founded in 2010, is one of the front runners in the race to develop a COVID-19 vaccine and is currently conducting Phase 3 trials involving thousands of patients, funded by government bodies and international groups. The company has never had a vaccine approved.

The report by Knowledge Ecology International (KEI) says the company has not been complying with the Bayh-Dole Act by failing to mention the funds it has received from agencies including Defense Advanced Research Projects Agency, DARPA, and the Biomedical Advanced Research and Development Authority, or BARDA. The act requires that companies disclose those funds in patent applications and patents, to better help government agencies track their spending and whether they are entitled to royalties when products are approved. Moderna did not respond to a request for comment, the paper said.

Don’t miss:Moderna and Pfizer’s COVID-19 vaccine candidates require ultra-low temperatures, raising questions about storage, distribution

Separately, Moderna said it’s in talks with the Ministry of Health, Labour and Welfare of Japan to potentially sell 40 million or more doses of its COVID-19 vaccine. Under the terms of this arrangement, the vaccine would be supplied by Moderna and distributed in Japan by Takeda Pharmaceutical Co.

beginning in the first half of 2021, if the vaccine receives regulatory approval.

What’s the economy saying?

Americans regained a small amount of confidence in the path of an economic recovery in late August, but they are still quite pessimistic about how long it will take to get back to normal, a new survey showed, MarketWatch’s Jeffry Bartash reported.

The final consumer sentiment survey in August rose to 74.1 from a preliminary reading of 72.8, the University of Michigan said Friday. It was also up from July’s 72.5 score.

The survey is still near a pandemic low, however. The index bottomed out at 71.8 in April, just two months after it had reached a nearly two-year high of 101.

A fresh outbreak of the coronavirus during the summer dampened the spirits of Americans in July just as they were starting to feel a bit more optimistic. Consumers showed little change in their attitude in August about how the economy is doing right now

“Although half anticipates an improved economy, when asked to judge the performance of the economy, 62% judged that the overall conditions in the economy could be best described as unfavorable,” said Richard Curtin, the chief economist of the sentiment survey.

Separately, Americans increased their spending in July for the third month in a row, but at a much slower pace in a sign that an economic rebound from the coronavirus pandemic has lost some steam.

Personal spending rose 1.9% last month, the government said Friday. Economists polled by MarketWatch had forecast a 1.6% increase.

After a record collapse in March and April, consumer spending roared back in May and also grew sharply in June. Yet a fresh outbreak of the coronavirus hurt the economy last month and sapped the recovery of its earlier momentum.

Incomes rose 0.4% largely because of government payments to businesses to keep employees on payrolls. “Quite a bit of the government relief still available in July ended in August, so next month might not look quite as bright,” said chief economist Chris Low of FHN Financial.

See now:The Fed might never hike rates again. Here are growth stocks for the long run, according to one strategist

What are companies saying?

• Beverage giant Coca-Cola Co.

announced a reorganization and will offer voluntary job cuts to 4,000 workers in the U.S., Canada and Puerto Rico. Voluntary layoff packages will be offered to those who have a most-recent hire date on or before Sept. 1, 2017. The company said a similar program will be offered across many international companies. Overall global severance programs are expected to cost the company between $350 million to $550 million.

• Gap Inc.

reported a narrower-than-expected second-quarter loss and sales that beat Wall Street expectation. Same-store sales rose 13%, led by a 95% online sales increase, Gap said. The retailer ended the quarter with $2.2 billion in cash and equivalents, compared with $1.1 billion at the beginning of the quarter. “Gap Inc. believes it is in a solid financial position to navigate through the ongoing pandemic and continue investing in its business,” the company said.

• Hibbett Sports Inc.

swung to a fiscal second-quarter profit and reported sales that were well ahead of expectations as consumers bought up sweatpants and other athleisure wear during the pandemic. Same-store sales increased 79.2%, with e-commerce sales more than tripling, up 212.2%, and brick-and-mortar comparable sales up 65.2%. “Our nearly 80% comparable sales results were driven by multiple factors, including pent-up consumer demand, temporary and permanent competitor store closures and government stimulus money,” said Mike Longo, chief executive of Hibbett. For the second half of fiscal 2021, Hibbett expects comparable sales up in the mid-single digits and EPS in the range of 85 cents to $1.

• Nio Inc.
a Chinese manufacturer of autonomous vehicles, announced an offering of 75 million American depositary shares, joining the many companies issue equity and debt during the pandemic. Nio will grant the underwriters of this offering a 30-day option to purchase up to 11.25 million additional American depositary shares. Nio intends to use the proceeds from the offering “ mainly to increase the share capital of and the company’s ownership in Nio China,” as well as to repurchase equity interests held by some minority shareholders of the Nio China business and conduct research research into autonomous-driving technology.

• Ulta Beauty Inc.

reported second-quarter adjusted profit that was well above Wall Street expectations and said its online sales had tripled during the pandemic. Ulta said its same-store sales fell nearly 27%, but e-commerce sales increased more than 200%. “While the pandemic continues to affect our business, we are encouraged by improving trends,” Chief Executive Mary Dillon said in a statement. Sales trends “have continued to improve, with comparable sales down in the mid-single digit range for the first three weeks of August.” Despite the recent improvement in sales trends, “it will take time to fully return to pre-COVID levels … we expect sales will continue to be challenged for the rest of the year,” Dillon said. Ulta did not provide guidance but said it expects costs between $35 million and $40 million related to PPE and COVID-19 in the second half of fiscal 2020, and capital expenditures between $180 million and $200 million, compared to a previous expectation of between $200 million and $210 million.

• Workday Inc. shares [

headed toward a record following an earnings beat, forecast increase and announcement of a new co-CEO. The human-resources cloud-software company raised its guidance on the back of the strong second quarter. “As a result of our strong Q2 performance, we are raising our fiscal 2021 subscription revenue guidance to a range of $3.73 billion to $3.74 billion,” Chief Financial Officer Robynne Sisco said. Workday separately announced that Chano Fernandez had been promoted to co-CEO to pair with Aneel Bhusri, who has operated as sole CEO since his former co-CEO, co-founder David Duffield, departed daily operations to become chairman. Fernandez was previously co-president with Sisco, who will be the sole president and chief financial officer moving forward.

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‘A toxic scandal’: Ireland is a test case on how NOT to battle COVID-19 — political figures attend 80-person dinner

DUBLIN — Do as I say, not as I do.

That appears to be the message from some senior government figures in Ireland who have told the public not to congregate in crowds, especially indoors, and to avoid traveling abroad for purposes other than emergencies or essential work reasons.

Minister for Agriculture Dara Calleary and deputy chairperson of the Senate Jerry Buttimer resigned Friday after attending an 80-person golf-society dinner, which directly contravened government guidelines on social distancing.

The Daily Mail called it: “A Toxic Scandal.” The Daily Mirror, another British tabloid that releases an Irish edition in Ireland, led with photos of some of those who attended the dinner and a one-word headline: “Muppets.”

The event took place just one day after the government issued stricter guidance to prevent the spread of COVID-19, capping outdoor private gatherings at 15 people and limiting indoor events to six people, unless an exemption was granted by the Department of Culture, Heritage and the Gaeltacht.

The dinner — predominantly attended by men from the world of politics, business, the law and journalism — was held at a hotel in County Galway, in the west of Ireland, to mark the 50th anniversary of the Oireachtas Golf Society. (“Oireachtas” is Gaelic for Irish Parliament.)

‘Small-town thinking like this has been a major slap for me, and many like me, who have observed all of the restrictions, who didn’t hug their parents or see their parents for months.’

— Breffni Burke, a public-relations consultant

Among the luminaries in attendance: Ireland’s European Union commissioner Phil Hogan and Supreme Court justice and former attorney general Séamus Wolfe also attended the Aug. 19 dinner.

“People all over the country have made very difficult personal sacrifices in their family lives and in their business to comply with COVID regulations,” Calleary, the now-former Minister for Agriculture, said before his resignation. “This event should not have gone ahead in the manner it did.”

After he issued his resignation, Calleary told Irish radio on Friday a more fulsome mea culpa: “Specifically in my letter of resignation I acknowledged front line workers and their families and public-health workers, the damage I’ve done to their work, unintentionally.”

Irish Prime Minister Micheál Martin attempted to contain the political fallout from the controversy, telling state broadcaster RTÉ on Friday: “I think he showed leadership and accountability above all to the people by resigning.”

But many Irish people remain unconvinced. “Small-town thinking like this has been a major slap for me, and many like me, who have observed all of the restrictions, who didn’t hug their parents or see their parents for months,” Breffni Burke, a public-relations consultant, said. “There was too much emphasis on business over health.”

“We had everything in our favor at the beginning of this because we are an island. It would have taken nothing to enforce travel bans,” she said. “We didn’t take it. There are too many lobby groups and too many commercial interests. The government we have is trying to please everybody.”

“You can’t please anybody and keep a pandemic at bay,” Burke added. “There’s a movement in the medical community called “Zero COVID” and they are calling for a lockdown, but that won’t be popular. A good government will make unpopular decisions for the greater good of society.”

Mary Lou McDonald, leader of the opposition left-of-center Sinn Féin party, which began as the political voice of the Irish Republican Army, which for the three decades until 1998 waged a violent campaign to unite Ireland, expressed dismay at the Oireachtas golf-society dinner: “This is not a country club. It is a parliament.”

Writing in the Irish Times last week, Dr. Jack Lambert, a professor of medicine and infectious diseases at the University College Dublin School of Medicine, said, “Elimination of coronavirus in Ireland is a fantasy. It is a dream that will not be achieved in the immediate future.”

He said comparisons between New Zealand and Ireland should stop: “There are calls for Ireland to adopt a New Zealand model, but New Zealand is not a part of the European Union, and it does not share a common border with Northern Ireland. This model will not work for Ireland.”

Until last week, New Zealand had reported no new cases for 102 days. Ireland is a country on the northwest periphery of Europe, while New Zealand is located off the southeastern coast of Australia. Like the Republic of Ireland, New Zealand has a population of 4.9 million.

But Ireland shares a land border with the U.K. province of Northern Ireland, and people from there (including travelers from other countries who travel through Northern Ireland) are not required to quarantine for 14 days if they cross into the Republic from the six counties in the U.K. province.

Dispatches from a pandemic: Ireland is a nation of saints, scholars and the status quo.

Restaurants, pubs, cafes and hairdressers were among the businesses that can currently open across Ireland provided they can observe social distancing rules to reduce transmission of the coronavirus. (Photo: Charles McQuillan/Getty.)

Johns Hopkins University ranks Ireland at No. 16 in the world on a list of COVID-related deaths per capita: 36.6 per 100,000 with a case-fatality rate of 6.4%, versus 0.45 per 100,000 and 1.3% in New Zealand, and 53.3 per 100,000 and case-fatality rate of 3.1% in the U.S.

Ireland confirmed 156 new COVID cases on Saturday, bringing the total case count to 27,908, but no further deaths, leaving the total number of deaths at 1,777. In comparison, New Zealand has just 1,674 cases and 22 deaths, according to Johns Hopkins.

“We have already wasted too much time by comparing ourselves to New Zealand,” Lambert wrote. “We are interdependent on the E.U. and the U.K. and we need to work together, not in isolation. We need to allow non-E.U. countries with a good coronavirus record to travel in and out of Ireland.”

“We need to have a robust screening plan at the airports and our borders which include selective coronavirus testing,” he added. “We need to collectively work out an Irish plan that permits us to safely move forward. Our medical and economic health are interdependent.”

‘We need, as a country, for the next couple of weeks to massively cut down the level of congregation that we are engaged in to get this virus suppressed again.’

— Dr. Ronan Glynn, Ireland’s acting chief medical officer

It’s not the first COVID-related political embarrassment here. Michael Cawley, the chairman of the state tourism board who previously served as the deputy chief executive of Irish airline Ryanair
resigned last week from his job after taking a vacation to Italy.

Cawley is also listed as a member of the board of directors of no-frills Ryanair, whose Chief Executive Michael O’Leary last week accused authorities of pursuing an “isolationist” response to the coronavirus pandemic.

His vacation was all the more surprising given that Fáilte Ireland had been spearheading a major campaign to convince Irish people to avoid flying overseas in an effort to prevent the spread of coronavirus, and to instead vacation at home and support local businesses.

Jack McDermot, a Dublin-based marketing and strategy consultant, said clear communication is critical in such an uncertain time. “Done well from the top, it instills confidence and solidarity in the population,” he said. “Executed badly, it leads to confusion, anger and resentment.”

He said Ireland was wrong-footed by the twin concepts of the “green list” — the list of countries where people could return from without quarantining for 14 days — and advice NOT to travel for leisure. “Micheál Martin just couldn’t seem to delineate this for people. And it was his job to do it.”

Ireland also reported one of the highest rates of COVID-related nursing-home deaths in the world. Some 62% of fatalities from the virus occurred in nursing homes, a rate exceeded only by Canada, leading doctors to call on the government for earlier and stricter social-distancing guidelines.

“The number of deaths in nursing homes here is a disaster,” McDermot added. “I do feel sympathy for the government, the Health Service Executive and nursing home management. It shouldn’t have happened. Nursing homes, like other key elements of the health system, are overstretched.”

Ireland has recorded one of the highest rates of COVID-related nursing-home deaths in the world. Some 62% of fatalities from the virus occurred in nursing homes, a rate exceeded only by Canada, leading doctors to call on the government for earlier and stricter social-distancing guidelines.

Another puzzle for health professionals here: The Irish government only introduced a mandatory face-mask policy in stores earlier this month, four months after the World Health Organization and other international health authorities changed their official policy on face masks to recommend people wear them to help stop the spread of the virus.

Dr. Ronan Glynn, Ireland’s acting chief medical officer, on Thursday called for the public to take the virus more seriously. “We need, as a country, for the next couple of weeks to massively cut down the level of congregation that we are engaged in to get this virus suppressed again,” he said.

Burke, the public-relations consultant, agrees, but says political leadership on the pandemic has been less-than-stellar. The fact that the Oireachtas golf dinner was for government figures, she said, reveals a systemic problem that makes one rule for the political establishment and another rule for everyone else.

“The current shenanigans have demonstrated we have a micro-thinking government. This is always going to be this kind of problem in Ireland. Everyone is always looking after their own backyard and, in this latest case, they were looking after the Oireachtas Golf Society.”

“New Zealand should be applauded of how the model can be done effectively and well. We are an island. I can still go to Dublin Airport and get on a flight anywhere,” she said. “Irish people do not like being told that they can’t do something, even something as simple as wearing a mask.”

“Now we are in a state of half-undone, and no one is happy,” Burke added. “We all want to return to our normal lives, but the only way to do this is together, and we need a firm hand at the wheel. There are amazing people in this country, like Ronan Glynn, listen to them, they care.”

This article is part of a MarketWatch series, ‘Dispatches from a pandemic.’

Quentin Fottrell, a native of Ireland, writes that senior government figures have been flouting the official rules designed to keep the coronavirus pandemic at bay.

Coronavirus update: COVID-19 has now killed at least 800,937 people worldwide. As of Saturday, the U.S. has the world’s highest number of confirmed COVID-19 cases (5,645,697) and deaths (175,817). Worldwide, confirmed cases are now at 23,026,230.

The Dow Jones Industrial Index
the S&P 500

and the Nasdaq Composite

ended higher Friday as investors await progress on a vaccine and Fed minutes released this week urged Congress for more pandemic aid.

More on the pandemic: If every American started wearing a face mask today, this is how many lives could be saved

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The Case for Gilead By

© Reuters.

By Geoffrey Smith and Christiana Sciaudone — It’s been a rough week for Gilead.

The Federal Drug Administration shocked the pharmaceutical maker and its shareholders when it rejected an expected blockbuster arthritis drug until more data about its effects was available. Analysts said it could delay the drug, filgotinib, into next year.

Gilead does have a promising Covid-19 treatment, remdesivir, that is expected to drive as much as $3.5 billion in revenue. And it has its HIV treatments that still make up the bulk of sales. But the short-term case for Gilead shares is hard to argue.’s Geoffrey Smith writes about the upside for Gilead, while Christiana Sciaudone explains the bear case. This is .

Bull Case: Setback means the stock is priced attractively

Gilead (NASDAQ:) is that it is a company with a well-established track record of solid growth and decent shareholder returns that, after the latest setback, is now priced attractively.

Moreover, the knee-jerk decline in response to Wednesday’s news about filgotinib is overdone. The company still has a chance to address the FDA’s concerns, and the U.S. regulator’s decision need not stop it being approved in other jurisdictions such as Europe, where it has already received a positive if non-final opinion from a key committee.

At Thursday’s closing price, the shares yielded over 4%, and regular buybacks over the years have generally juiced shareholder returns by a couple more percentage points.

There is no obvious short-term risk to that record. Revenue from remdesivir, the investigational antiviral drug that some (but not all) studies indicate results in speedier recovery from the Covid-19 virus, has started to flow as of July 1 (it gave away all its stockpiles to the U.S. government in the first half).

At over $2,400 per five-day course for Medicare and $3,120 per course for private healthcare companies, that will soon add up, given that over 40,000 Americans are still being diagnosed every day for the virus, and hospitalizations run above 10% of cases in most districts. Depending on how the virus progresses, revenue of more than $2 billion in the rest of 2020 is quite realistic. RBC analyst Brian Abrahams says as much as $3.5 billion is possible.

Moreover, on the assumption that the medical establishment finally does get Covid-19 under control, its still-potent stable of antiviral drugs for HIV, as well as its hepatitis drug will soon overcome the dip in revenue caused by vulnerable patients staying away from their doctors’ clinics in the first half of the year.

Longer-term, the company also has a powerful and growing degree of optionality on a range of oncology drugs, as illustrated by this month’s agreement with immunotherapy specialist Tizona, which gave it the option to buy Tizona out for a total consideration of $1.55 billion. Such deals aren’t risk-free, as the failure to get filgotinib approved so far shows, but its partner in that project, but are still a rational, risk-adjusted approach to renewing the portfolio.

Bear case: A company forced to rest on its laurels

Gilead is a company forced to rest on its laurels, especially now that the U.S. Food and Drug Administration said, “Not yet!” to what was supposed to be its big new blockbuster drug.

Filgotinib should have been a billion-dollar smash hit and it still might, just not any time soon. 

“There’s really no way to sugarcoat this very surprising development,” Barclays analysts said in a note. They cut their peak sales estimate for the drug to about 527 million euros from 1.3 billion euros, Bloomberg reported. “This is essentially the bear-case scenario playing out.”

The expectations for filgotinib were high. While it takes five to 10 years to bring a drug to market, once there, it could see $5 billion in peak revenue, said Hartaj Singh, managing director at Oppenheimer who specializes in biotechnology. Singh has a buy rating on the company, seeing it as cheap for what it has to offer in the long-term, but he said he sees how short-term investors may not see things the same way.  

“This is a product that, even if it gets approved, will grow very, very slowly for the next three to five years,” Singh said in a telephone interview. 

Also, consider that AbbVie (NYSE:) already has a Janus kinase inhibitor drug out on the market to treat rheumatoid arthritis, Rinvoq, for adults with moderately to severely active rheumatoid arthritis, according to a June 4 article on DocWire News. 

And let’s look at Gilead’s current stale stable of treatments. HIV treatments represent the bulk of Gilead’s sales, with $8.1 billion of $10.7 billion in revenue in the first half coming from that segment. Where’s the future? 

Most analysts agree that the Foster City, California-based company isn’t all that. While 10 say buy, 11 say hold and one says sell. 

A potential bright spot should be Veklury, previously known as remdesivir, which received emergency use authorization from the FDA for treatment of Covid-19. But the data is still uncertain, and it will take a while to figure out its efficacy. 

A way out for Gilead could be some kind of partnership. In June, AstraZeneca (NYSE:) was said to make an approach to merge with Gilead.  

Combining AstraZeneca’s worldwide heft and focus on more primary-care diseases with Gilead’s hyper focus on infectious diseases could yield benefits, Singh said. Their combined focus on oncology has little overlap and could also yield an oncology powerhouse.

But AstraZeneca has a high valuation without an attractive pipeline (kind of like Gilead) and current Gilead shareholders would stand to benefit little, Singh said. 

In short, there are no near-term benefits to buying Gilead. Traders seeking a faster return will want to look elsewhere.



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