U.S. Cases Increase 2%; New York Beaches to Reopen: Virus Update

(Bloomberg) -- New York is joining other Atlantic coast states in allowing beaches to reopen in time for the U.S. Memorial day holiday. Italy had the fewest new coronavirus cases in four days as it prepares to let citizens move freely starting in June.

Abbott Laboratories fell after the U.S. Food and Drug Administration said a company test for Covid-19 used by the White House has potential accuracy issues. Cigarette maker British American Tobacco is poised to begin testing an experimental vaccine in humans.

The cost of the pandemic could reach as high as $8.8 trillion, the Asian Development Bank said. The German economy shrank the most in more than a decade, offering an early flavor of the damage, while U.S. retail sales plunged in April.

Key Developments:

• Virus Tracker: Cases top 4.5 million; deaths reach 306,000
• Trump introduces “warp speed” leaders on vaccine
• U.S. warns Abbott’s virus test has potential accuracy issues
• Empty Times Square rooms signal reckoning for hotels
• Farms, ranches seek billions in aid as losses mount
• Virus revives worst-case scenarios for U.S.-China relations
• Eating out in London will never be the same again

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Trump Seeks to Force Hospitals to Open Books (5:55 p.m. NY)

The White House wants Congress to require hospitals and insurers to reveal the prices they negotiate for medical services as part of the next round of coronavirus stimulus, in an effort to short-circuit a legal battle with the health care industry.

The U.S. Health and Human Services department published two regulations last year requiring the prices be made public. The industry challenged the rule in court arguing it’s violates the First Amendment, and delayed its implementation. The White House believes making it a law would end the matter, according to people familiar with the matter.

N.Y. Tax Revenue Fell 68% in April (5:40 p.m. NY)

New York state’s tax revenue plummeted 68.4% in April, as the lockdowns and the extension of tax return filings to July 15 took a toll. It collected $3.7 billion, or $7.9 billion less than the previous April. Personal income-tax revenue fell more than $7 billion from last April, a drop that was primarily due to the delayed tax filing deadline.

“New York is facing economic devastation not seen since the Great Depression,” New York Comptroller Thomas DiNapoli said in a news release. “New York and other hard-hit states need the federal government to step up and provide assistance, or the state will have to take draconian actions to balance its budget.”

Portual Set to Reopen Beaches (4:50 p.m. NY)

Portugal plans to reopen beaches popular with tourists on June 6 as the government eases confinement measures and adopts new rules to keep 1.5 meters (5 feet) between people, Prime Minister Antonio Costa said at a Lisbon news conference. Signs will show the crowd size at any beach, and some may close if too many people congregate. Tourism, including on Portugal’s Atlantic coast, accounts for about 15% of the economy and 9% of employment.

NIH Director, Labor Secretary Join Task Force (4:30 p.m. NY)

U.S. National Institutes of Health Director Francis Collins and Labor Secretary Gene Scalia are among five new appointees to the White House coronavirus task force, which Vice President Mike Pence said is focusing on getting U.S. business reopened. Pence, the chairman, also added Agriculture Secretary Sonny Perdue to the 23-member group along with Peter Marks, director of the Food and Drug Administration’s Center for Biologics Evaluation and Research; and Thomas Engels, administrator of the Health Resources and Services Administration.

Fed Warns of Asset Price Plunge (4:15 p.m. NY)

The Federal Reserve in a stark warning said stock and other asset prices could suffer “significant declines” should the pandemic deepen, with commercial real estate being among the hardest-hit.

The Fed’s twice-yearly financial stability report flagged risks to the banking system and broader economy and highlighted its race to intervene in markets and temporarily dial back rules on financial firms amid the outbreak.

The abrupt shutdown of economies triggered market uncertainty that upended trading from Treasury securities to junk bonds and led to dramatic swings in prices. Markets settled as the Fed flooded the financial system with liquidity.

U.S. Cases Rise 2%, Above Week Average (4 p.m. NY)

Coronavirus cases in the U.S. increased 2% compared with the same time Thursday to 1.43 million, according to data collected by Johns Hopkins University and Bloomberg News. The increase was above the average daily increase of 1.7% over the past week. Deaths rose 2% to 86,744.

• New York had 132 deaths, according to Governor Andrew Cuomo. That marked the state’s fifth straight day of deaths below 200 and the first time deaths fell below 150 in seven weeks.
• In New Jersey, deaths increased by 201 to 10,138, a 2% increase over 24 hours. New cases rose 1% to 143,905, according to Governor Phil Murphy.
• Florida reported 44,138 cases, up 2.1% from a day earlier, according to the state’s health department. Deaths rose 2.4% to 1,197.
• California’s cases rose 2.4% to 74,936 while deaths rose 2.5% to 3,108, according to the state’s website.

Spain Advances Reopening for 70% of Nation (3:25 p.m. NY)

Spain put about 70% of the nation’s population into the second phase of a four-step reopening process, Health Minister Salvador Illa said. Madrid and Barcelona, the nation’s two biggest cities, will remain in the restrictive first phase, he said. Certain rules also are being eased, such as allowing shops to operate without the need for appointments, but Illa said limits will remain on the number of employees per client.

Mall of America to Reopen June 1 (2:20 p.m. NY)

Minnesota’s sprawling Mall of America will reopen June 1, two weeks after the state allowed on-site retail to resume. The mall, which got 40 million annual visitors before the pandemic, said tenants need time to rehire and train staff as well as clean, sanitize and take safety measures. When open, the 2.5-million-square-foot mall near Minneapolis will limit customers to 50% of capacity. Restaurants and play areas will stay closed until state officials approve.

Florida Allows Gyms to Reopen (1:28 p.m NY)

Florida gyms can reopen, and retailers and restaurants will be able to operate at 50% indoor capacity, up from 25%, starting Monday, Governor Ron DeSantis said.

The state started reopening last week, with DeSantis saying the Sunshine State had dodged the worst-case scenarios predicted by some analysts. He said Friday that ventilator use and Covid-19 patients in intensive-care units have both declined significantly since the start of Florida’s stay-at-home order.

“The American people never signed up for a perpetual shelter in place,” DeSantis said.

N.J. Virus Deaths Top 10,000 (1:15 p.m. NY)

New Jersey deaths from the new coronavirus topped 10,000, days before the state takes steps toward reopening. The toll belies improvements in hospitalization and other data that have led Governor Phil Murphy to take some steps toward restarting the state’s economy. Total hospitalizations are about half of the peak, while patients on ventilators and in intensive care also have dropped.

Air France-KLM Reverses, Offers Refunds (12:40 p.m. NY)

Air France-KLM will offer refunds to customers whose flights were canceled by the pandemic, a policy reversal that could add pressure on the struggling carrier’s balance sheet. Travelers will get a cash reimbursement or a voucher for a future flight worth 15% more than the initial ticket value, according to a statement. The incentive is to encourage customers to opt for future flights.

Through March 31, the value of tickets for flights that may be canceled and for which the airline could be liable for vouchers or refunds reached about 2 billion euros ($2.2 billion), according to the carrier.

WHO Pushes Vaccine Access Plan (12:30 p.m. NY)

The World Health Organization is pushing a proposal that aims to ensure broad access to Covid-19 treatments and vaccines while offering an appropriate reward to creators.

Under the plan offered by Costa Rica, drug companies would voluntarily donate Covid-related intellectual property to a global pool. Countries would be free to decide how to mete out the rights.

Countries would retain the right to allow low-cost generics of patented medicines. WHO Director-General Tedros Adhanom Ghebreyesus is urging countries and companies to support the proposal, which will be discussed Monday and Tuesday.

Italy Has Fewest Cases in Four Days (12:05 p.m. NY)

Italy registered the fewest new cases in four days, as the government considers letting citizens move freely starting on June 3 after more than two months of lockdown.

Civil protection authorities reported 789 cases compared with 992 a day earlier, bringing the total to 223,885. Daily fatalities fell to 242 from 262 on Thursday, for a total of 31,610.

N.Y. Joins N.J. to Reopen Beaches (11:50 a.m. NY)

New York Governor Andrew Cuomo said city, town and county beaches may open in time for the Memorial Day holiday weekend, with group-contact activities like volleyball prohibited. Occupancy will be limited to 50% capacity, the governor said.

New Jersey on Thursday announced it would open its beaches for the holiday, and Delaware also is opening. Cuomo said he understands that if New York doesn’t open facilities, residents will just flock to neighboring states.

New York had 132 new deaths, the first time the total fell below 150 in seven weeks.

Navy Hospital Ship Leaves L.A. (11:40 a.m. NY)

The U.S. Navy hospital ship Mercy has left Los Angeles, ending a seven-week deployment aimed at easing the burden on the region’s medical system, U.S. Northern Command said. About 60 personnel will remain to work at skilled nursing facilities, according to a statement. Mercy docked at the Port of Los Angeles on March 27. The USNS Comfort spent April in New York City on a similar mission.

Another Brazil Health Chief Leaves (11:30 a.m. NY)

Brazil’s health minister quit the post less than a month after his predecessor was fired by President Jair Bolsonaro amid a clash over social distancing steps. Nelson Teich stepped down on Friday, the government said.

The Health Ministry reported 13,944 new cases on Thursday, solidifying the nation as the new global hot spot. Infections more than doubled in the past two weeks, pushing the total to 202,918.

NYC, Long Island Lockdowns Extended (11:15 a.m. NY)

New York City, Long Island and three other regions have failed to meet requirements for reopening, and as a result their lockdowns will remain in effect for at least two more weeks. Five upstate regions -- the Finger Lakes, Central New York, Mohawk Valley, Southern Tier and North Country -- met the criteria, according to an executive order signed Thursday night. New York, Long Island and Western New York met four of seven metrics, while the Capital and Mid-Hudson regions met five. The metrics include requirements for hospital-bed capacity, testing and tracing.

Austria to Resume Cultural Events (10:50 a.m. NY)

Austria, one of the first countries to ease its lockdown, will allow cultural events again, restarting an important part of its tourism industry. Events with as many as 100 people will be allowed from May 29, rising to 250 in July, when cinemas will reopen as well, and to 1,000 in August. The Salzburg Festival, a major draw for an audience including CEOs and heads of state, will take place in a scaled-down version.

U.K. Pubs Dump 70 Million Pints (10:30 a.m. NY)

U.K. pubs shut since late March may be forced to dump 70 million pints of beer -- enough to fill more than 16 Olympic-sized swimming pools -- because much of the brew in storage will spoil before reopening in early July, the British Beer and Pub Association said. Some of the unsold beer is being used as feed for anaerobic digesters to create organic fertilizer for farming, the group said.

Portugal’s Hospitalized Cases Drop (8:47 a.m. NY)

Since Portugal started easing confinement measures on May 4, the number of hospitalized patients has dropped by more than 17%, while cases in intensive care units have declined 16%. Portugal reported 264 new confirmed coronavirus cases on Friday, up from 187 on Thursday, taking the total to 28,583, the government said. The total number of deaths rose by 6 to 1,190.

Denmark Records No Virus Deaths (8:42 a.m. NY)

The Nordic nation had its first day without Covid-19 related deaths in since mid-March, evidence that its strategy of locking down early has succeeded in bringing the virus under control. The number of deaths was unchanged at 537 on Friday, health authorities in Copenhagen said.

Switzerland Opens Borders to Germany, Austria (8:31 a.m. NY)

All closed Swiss border crossings will be reopened by the first half of next week in coordination with Germany and Austria, Christian Bock, director at the Swiss Federal Customs Administration, told reporters in Bern.

U.S. Retail Sales Post Record Decline (8:30 a.m. NY)

U.S. retail sales plunged by the most on record for a second month as the pandemic shuttered businesses, spurred layoffs and kept Americans at home. Revenue at retailers and restaurants fell 16.4% in April from the prior month, worse than the 8.3% drop in March -- previously the worst in data back to 1992.

Separately, a gauge of factory activity in New York State shrank in May. The Federal Reserve Bank of New York’s general business conditions index improved to minus 48.5 from an all-time low of minus 78.2 in April, a report out Friday showed.

Abbott Labs Slides in Testing Fracas (7:54 a.m. NY)

Abbott Labs slipped 3% pre-market on Friday after the FDA issued a warning on possible accuracy issues with the devicemaker’s ID Now test for Covid-19 infections. Quidel, the maker of a competing test, rose 2.8%.

“Although it remains to be seen if there are repercussions from this study’s results, the headlines come at a time when new rival tests are coming online, including QDEL’s rapid antigen Sofia,” JPMorgan analysts led by Tycho Peterson wrote.

North Face Owner VF Sees Sales Slump (7:52 a.m. NY)

VF Corp., whose stable of brands includes Vans and the North Face, expects first-quarter sales to fall by more than half as the coronavirus outbreak upends the retail sector. The shares fell in early trading.

The company said it couldn’t estimate the impact of the Covid-19 pandemic beyond the coming quarter, joining a growing list of companies pulling their financial forecasts for the year. Sales and profit in the fiscal fourth quarter, which ended March 28, both missed Wall Street’s estimates.

“Through the first ten months of fiscal 2020 our business delivered results above our stated long-term growth objectives,” Chief Executive Officer Steve Rendle said in a statement. “Then the world changed for all of us as a result of Covid-19.”

Fiat Seeks $6.8 Billion State-Backed Loan (7:40 a.m. NY)

Fiat Chrysler Automobiles NV is in talks to obtain a state-backed credit line of about 6.3 billion euros ($6.8 billion) to strengthen the carmaker’s financial buffer against the steep downturn caused by the coronavirus, according to people familiar with the matter.

Fiat’s local unit is discussing the facility with Intesa Sanpaolo SpA, which is the lead lender, the people said, asking not to be named because the matter is private. Sace SpA, Italy’s trade-credit insurer, will provide a public guarantee for 80% of the amount, they said.

The guarantee would need to be granted by a decree of the Finance Ministry, the people added.

Orban May Give Up Special Powers at End-May (7:30 a.m. NY)

Hungary’s Prime Minister Viktor Orban said he may be able to give up special powers granted to him by parliament to fight the coronavirus pandemic at the end of May, according to the state news service MTI. Orban’s comments, reported from a press briefing in Serbia, bring forward the end to a potentially indefinite state of emergency announced in March. The move triggered European Union criticism about whether he was using the pandemic as pretext for a power grab.

A Third of U.K. Workers Deemed Vital (7:25 a.m. NY)

One in three U.K. workers are in jobs deemed vital during the coronavirus lockdown, and many of them are at heightened risk of contracting the disease. The Office for National Statistics said Friday there were 10.6 million so-called key workers last year and 15% of them are at moderate risk from Covid-19 because of a health condition such as asthma, heart disease and diabetes.

The findings are likely to renew calls to improve pay and conditions for those on the front line in the battle against the pandemic, who in general earn less than employees in other occupations. The Institute for Fiscal Studies calculates that a third of key workers get less than the target rate for the national minimum wage.

Singapore to Allow More Laborers to Resume Work (7:10 a.m. NY)

Singapore will allow more construction laborers to return to work as the city-state looks to restart an economy that has been largely shut because of the coronavirus pandemic. The country will gradually add about 5% of the construction workforce, or about 20,000 workers, from June 2, on top of an existing 5% currently working on critical infrastructure projects.

An outbreak among low-wage migrant workers staying in cramped dormitories has led Singapore to record one of the largest virus tallies in Asia. Of the nearly 27,000 total confirmed cases, about 90% are infections among workers in dormitories. Officials said this week that infection rates among this group are “stabilizing” and some 20,000 foreign workers will be ready for discharge from care facilities by the end of May.

Cigarette Maker’s Vaccine Poised for Human Tests (6:58 a.m. NY)

An experimental Covid-19 vaccine developed by cigarette maker British American Tobacco Plc is poised to begin testing in humans. Pre-clinical tests of the vaccine showed a positive immune response, the London-based tobacco company said Friday in a statement. The first phase of human trials could begin as soon as late June if authorized by drug regulators, BAT said.

Drugmakers from around the world have jumped into the vaccine race, with more than 100 candidates in development in the U.S., Europe, China and other regions. BAT rival Philip Morris International Inc. is also testing an immunization. Smoking cigarettes, the two companies’ main products, may raise the risk of severe Covid symptoms, according to the World Health Organization.

BAT subsidiary Kentucky BioProcessing uses tobacco plants in making the experimental vaccine, which is derived from the genetic sequence of Sars-CoV-2, the virus that causes Covid. According to BAT, the method generates the vaccine faster than conventional approaches, reducing the time required from several months to about six weeks.

U.K. Northerners, Diabetics Among Most Vulnerable (6:33 a.m. NY)

People in the North of England and diabetics are far more likely to die from coronavirus, data compiled by the U.K. national health service show. More than a quarter of all fatalities from Covid-19 were people with diabetes, according to the data, which for the first time breaks down deaths by underlying condition. In Northern England, 7,089 people died, nearly double the number of deaths in the South.

Separate data from the Office for National Statistics show that more than 27% of care home deaths in England & Wales from March 2 through May 1 were linked to Covid-19. There were 73,180 deaths in the facilities from Dec. 28 to May 1, more than 23,000 above the same period a year earlier.

E-Commerce Surge Boosts JD.com (6:02 a.m. NY)

JD.com Inc. forecast a 20% to 30% rise in revenue, demonstrating how operating its own warehouses and delivery fleet is helping the e-commerce giant weather China’s economic slowdown. Revenue at China’s second largest online retailer rose a better-than-expected 21% in the March quarter. It forecast sales of between 180 billion yuan and 195 billion yuan this quarter, versus an average analyst estimate for 177.1 billion yuan.

JD, which reported results before rivals Alibaba Group Holding Ltd. and Pinduoduo Inc., shows how China’s Covid-19 lockdown is pushing shoppers online, fueling an e-commerce boom. Investors expected JD to better endure the downturn thanks to a direct sales and in-house logistics model that helped it navigate supply disruptions. It’s gained $13 billion in market value since the novel coronavirus emerged in January.

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With assistance from Bloomberg