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US governors scramble to address big rises across country
More than 100 asymptomatic coronavirus cases have been discovered in Xinjiang, one of China’s most heavily monitored and policed regions, signalling the biggest cluster detected in the country since July.
Rapid testing, contact tracing and quarantine have managed to head off a second wave of coronavirus cases in China, with infections typically detected at the asymptomatic stage.
The national daily case count had been in the dozens since an earlier large outbreak in Xinjiang, the predominantly Muslim region in western China that has been turned into a security state in recent years with ubiquitous surveillance and heavy-handed policing. The suppression of information flowing out of crowded camps has prompted concerns that the virus could spread easily.
There has been a resurgence of coronavirus, meanwhile, in Europe and the US. In France, the government’s chief medical adviser warned of a “critical situation” while Italy and Spain announced sweeping measures on Sunday to address a jump in new cases. US healthcare workers fear that surging case numbers could overwhelm hospitals as governors scrambled on Sunday to address big rises in new infections across the country.
In a sign of investors’ confidence in China’s continued growth, Ant Group is set to raise more than $34bn after setting the price of shares in its initial public offering, putting the payments group on track to top Saudi Aramco as the biggest-ever market listing.
The effect on markets of a surge in liquidity, debt and deficits will be nuanced, cautions Mohamed El-Erian. It will only support specific sectors, companies and countries. “Elsewhere, it is likely to be insufficient to avoid the bankruptcies and debt reschedulings that accompany a global recovery that is too small, too uneven, and too uncertain.”
Wall Street followed European bourses sharply lower on concerns a rising number of coronavirus infections will prompt a new wave of social restrictions that will damp business activity. The US benchmark S&P 500 fell 2 per cent in morning trading on Monday. The Vix index, the so-called “fear gauge”, rose more than 4 points to 31.6, well above its long-term average of 20, in a sign investors are bracing themselves for flare-ups in volatility in the month ahead.
The boost provided by the EU’s Covid-related borrowing is helping Italy stretch out the maturity of its public debt and insulate it from a future rise in interest costs, Rome’s debt chief has said. Davide Iacovoni, who oversees a debt pile worth more than €2.4tn, said the red-hot demand for the EU’s inaugural sale of Covid-linked debt last week — which attracted a record-breaking €233bn of orders — was supportive for Italy’s bonds.
SAP, Europe’s largest software company, has cut its revenue and profit forecasts for the year as a resurgence of coronavirus cases depressed business spending, sending the group’s shares down as much as 20 per cent on Monday. The German company warned that its customers, which include many of the world’s largest corporations, were spending less as rising Covid-19 cases hit business confidence.
Now would be a crazy time for banks to resume dividends, argues FT deputy editor Patrick Jenkins. Claims that the worst is over ignore the reality of second-wave problems, and the deferred impact on the budgets of companies and individuals that has been cushioned by government aid.
A vaccine under development by the University of Oxford, in collaboration with AstraZeneca, has produced a robust immune response in elderly people, the group at highest risk from the disease, according to two people familiar with the finding. Matt Hancock, the UK health secretary, damped expectations of an expedited launch of a vaccine by the end of the year but said he expected the “bulk” of a rollout to be in the first half of 2021.
As Zambia heads for Africa’s first sovereign default in a decade and pressure mounts on other debt-burdened countries during the coronavirus pandemic, the crisis has revealed the scale and fragmented nature of Chinese lending as well as Beijing’s reluctance to fully align with global debt relief plans. The country’s share of bilateral debt owed by the world’s poorest countries to members of the G20 has risen from 45 per cent in 2015 to 63 per cent last year, according to the World Bank.
Pandemic-stricken EU member states have made it plain that they intend to fully tap the €390bn of recovery fund grants leaders agreed in July. What is much less clear is how far they intend to avail themselves of the cheap loans the European Commission is also offering.
The global economy is expected to shrink 4.4 per cent this year, according to the IMF, the sharpest contraction in modern history — throwing millions of people into poverty. But the world’s billionaires have grown wealthier compared with 2019, according to data compiled by UBS. The trend, observed across regions from Brazil and China to the US and Germany, is further indication that the pandemic could deepen inequality.
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In response to The coronavirus pandemic: FT Readers respond, reader Light_1 wrote:
It’s worth remembering that Sweden’s health system ranks in the top three globally, well ahead of the UK’s NHS. So with better capacity available Sweden can cope with spikes in demand.
Unilever gave its staff a Global Day of Thanks away from work this month in recognition of their months of pandemic-induced productivity. Pilita Clark offers praise to companies for giving staff more time off, from Google to Chegg. Some groups have found that if you give staff Friday off they will just spend all day Saturday catching up, but “the main thing is to try, as the days-off pioneers are learning.”
In her breakthrough post-apocalypse novel Station Eleven, published in 2014, Emily St John Mandel imagined a rather different outcome to a pandemic — a post-technology world. During lunch with the FT, she admits her vision of “pandemic and then no technology” was upside down. But she believes what is likely to link fiction and reality is the survival of art and growth in reading. In her new book, The Glass Hotel, she predicts a more decentralised world and many people moving off on a path to an alternative life.