UK construction activity rebounds strongly
Chelsea Bruce-Lockhart in London
The UK construction sector reported its strongest gain in activity in almost five years in July, in a boost for the government that is relying on the sector to drive the economic recovery.
The IHS Markit/Cips purchasing managers’ index for the UK construction industry rose to 58.1 in July, from a reading of 55.3 the previous month. This placed it well above the 50 mark that indicates the majority of businesses reported an improvement in activity, compared with the previous month. Economists had expected a reading of 57.0, according to a poll by Reuters.
The continued growth of the UK’s construction sector will be welcome news for the UK Prime Minister, Boris Johnson, who has used the slogan “build, build, build” to describe his intentions for reviving the economy after lockdown. The government has introduced plans to overhaul the UK planning system – to encourage building and address the country’s housing shortage.
Home building was the main driver of growth in activity in July. Contractors were also overall more optimistic about prospects for the year ahead. Yet concerns about the wider economy meant staff numbers continued to decline with one in three survey respondents reporting a drop in employment.
While the PMI measure is a good gauge of whether the industry is expanding or contracting, it does not indicate the pace of growth, or the pace of recovery from the government-imposed lockdowns.
The UK’s PMI reading for construction was well above the 48.9 reported for the eurozone on Thursday, which suggested construction activity had continued to slow for the bloc’s economy.
Serco’s shares tumble after outsourcer defers its dividend
Shares in Serco, the outsourcing company that is leading the UK government’s contact tracing scheme, slumped 12.5 per cent after it ruled out reinstating its dividend.
The fall came despite revenues at the contractor jumping a quarter to £1.82bn in the first half of 2020, after it acquired an engineering company that services the US navy and scooped up £130m of coronavirus-related contracts.
Serco added more than 50 per cent to its underlying trading profit at £77.6m, compared with £50.6m a year earlier, the group said on Thursday.
However, the outsourcer did not say that it would pay a dividend after withdrawing its first scheduled payout in five years in April on the uncertain outlook as it prioritises covering deferred tax payments.
The group said it would refuse to take £1,000 payments for each worker that it re-employs as part of the UK government scheme to encourage hiring following the lockdown, given its position as a service provider for the government.
Rupert Soames, chief executive of Serco, said on BBC Radio 4’s Today that Covid-19 had a “net-zero” effect on its profits as the uptick in virus-related contracts was balanced out by the hit to contracts it received from the leisure, rail and airport sectors.
Italian industrial output rises but still below pre-Covid levels
Chelsea Bruce-Lockhart in London
Italy’s industrial production rose more than expected in June, but remains well below pre-Covid levels.
The growth in output slowed significantly from the previous month, damping hopes of a “V” shaped recovery from the lockdowns that governments imposed to try and prevent further spread of the coronavirus.
The eurozone’s third-largest economy posted a month-on-month increase in industrial output of 8.2 per cent in June, seasonally adjusted data revealed.
The rise in industrial production followed a record 41.6 per cent increase reported for the previous month, when the sector rebounded sharply from the impact of strict lockdown measures imposed by the government in March and April.
Economists in a Reuters poll had expected output in the industry to rise by 5.1 per cent in June.
Yet, compared with the previous year, production was 13.7 per cent lower in June and 12.8 per cent lower than levels reported in February, before the Covid-19 outbreak tightened its grip, the Istituto Nazionale di Statistica said on Thursday.
Industrial production refers to the output of manufacturing, mining and utilities industries. Although these industries make up a small proportion of gross domestic product, the change in production levels is a good gauge of the strength of overall consumer demand.
Nintendo earnings grow more than sixfold during pandemic
Leo Lewis and Kana Inagaki in Tokyo
Nintendo reported a 541 per cent surge in earnings during the darkest months of the Covid-19 pandemic, with net profits hitting $1bn despite a worldwide shortage of its Switch consoles and a relatively slender pipeline of in-house games.
The stunning year-on-year increase in sales and profits during the April to June quarter — far in excess of what analysts had expected — was in large part driven by sales of Animal Crossing: New Horizons, a whimsical, island-based fantasy game that captured both imaginations and discretionary spending as the world retreated into its living rooms.
For the April to June quarter, the Kyoto-based company reported a net profit of ¥106.5bn ($1bn), up from a year-earlier profit of ¥16.6bn. Sales were 108 per cent higher over the same period, with combined sales of both the portable and hybrid version of the company’s Switch console jumping from 2.13m to 5.68m units.
Animal Crossing, which was released 10 days before Nintendo’s financial year end on March 31, sold 10.63m units during the April to June quarter, giving it cumulative sales of 22.4m and putting it, over just a few months, among the top 50 best-selling games of all time.
Despite achieving half its net profit target for the full financial year in the first quarter alone, the company — infamous among investors for its conservative guidance — maintained its forecasts.
“Their guidance is not even a joke any more; it just cannot be taken seriously,” said Serkan Toto, a games industry analyst and consultant based in Tokyo, who added that profitability at Nintendo had benefited strongly from the rising proportion of games that the company now sold via digital download.
French insurer Axa scraps dividend as it takes €1.5bn Covid hit
David Keohane in Paris and Oliver Ralph in London
French insurer Axa has cancelled plans for a special dividend and withdrawn some of its financial targets for 2020 as it took a €1.5bn hit from claims related to Covid-19
Axa said that net profit fell to €1.4bn in the first half of 2020, 39 per cent below the same period last year, while revenues fell 10 per cent to €52.4bn. The Covid charge that dragged down earnings was in line with previous estimates but Axa left open the chance of it increasing in the coming months.
Axa’s share price has fallen 30 per cent far this year, and dropped 3 per cent on Thursday.
“There are, you know, questions. So, for example, one question is, will there be a second wave?” said Thomas Buberl, Axa chief executive, to the Financial Times.
The group agreed in June to cover the losses of hundreds of restaurants after a legal challenge by a policyholder.
Covid-19 is likely to be one of the most expensive events ever for the insurance industry, with payouts expected across a range of policies from business interruption to travel. Swiss Re estimates that claims will cost the industry between $50bn and $80bn, putting it on a par with a large natural catastrophe.
India’s central bank to launch one-off debt restructuring scheme
Amy Kazmin in New Delhi
The Reserve Bank of India will allow banks to restructure loans to companies in distress due to the coronavirus pandemic, without forcing lenders to reclassify such loans as stressed assets, as it seeks to preserve the stability of the financial system.
Shaktikanta Das, the RBI governor, unveiled the one-time debt restructuring scheme on Thursday, after a monetary policy committee meeting at which members voted unanimously to keep rates on hold, citing elevated inflationary pressures.
Mr Das did not offer many details on the restructuring scheme, and said a committee would be appointed to lay out its principles, including safeguards, entry norms, post-restructuring monitoring and other details to ensure a credible rules-based programme, rather than just ad hoc restructuring.
The expert committee to establish conditions of the restructuring programme will be led by veteran banker KV Kamath. Only loans that were classified as standard as of March 1 — before the pandemic hit — would be eligible for restructuring under the programme, Mr Das said.
The RBI had announced a moratorium on debt repayments shortly after India went under one of the world’s strictest coronavirus lockdowns, and that moratorium has since been extended until Aug 31.
However, lenders have warned that once the moratorium ends, many otherwise healthy companies will struggle to repay loans given the ongoing disruptions as local authorities impose new lockdowns to cope with another surge in coronavirus cases.
Lufthansa posts biggest ever quarterly loss
German airline Lufthansa has reported its biggest ever quarterly operating loss and said it can no longer rule out job cuts in its home country, despite having taken a €9bn government bailout last month.
The flag carrier, which has already said it will shed 22,000 jobs and retire 100 of its aircraft, posted a €1.7bn operating loss for the three months to June, as passenger traffic and its revenues collapsed. For the six-month period, the total loss was €2.9bn.
In the second quarter, Lufthansa carried 1.7m passengers, a 96 per cent drop on the same time last year. Quarterly revenues dropped 80 per cent to €1.9bn.
“We are experiencing a caesura in global air traffic,” chief executive Carsten Spohr said. “We do not expect demand to return to pre-crisis levels before 2024. Especially for long-haul routes there will be no quick recovery.”
Lufthansa, which has made 8,300 staff redundant during the Covid-19 crisis, added that while its “objective was to avoid redundancies as far as possible”, the market conditions and the “course of the negotiations on necessary agreements with the collective bargaining partners” meant “this goal is no longer realistically within reach for Germany”.
The restructuring would make it possible “to refinance the funds of the stabilisation package as quickly as possible,” Lufthansa said.
ITV hit by slump in advertising
Alex Barker in London
ITV has suffered the most severe advertising decline in its broadcasting history, plunging 43 per cent in the second quarter, but said it saw “signs of improvement” in a market ravaged by coronavirus.
While overall viewing figures rose during the lockdown, the broadcaster was hit by the slump in advertising and the shutdown in production, with revenues falling 17 per cent to £1.2bn in the six months to June 30. Advertising revenue fell 21 per cent in the first half of the year.
ITV scrapped its interim dividend and said it was unable to give guidance for the third quarter “given the level of uncertainty”. But it pointed to an improving trend in advertising, with some big brands returning to spending and total advertising revenue down 23 per cent in July.
About 230 ITV productions were affected by the lockdown, causing problems for broadcast schedules as well as sales of shows to other buyers. ITV said 70 per cent had now been “delivered or are back in production”.
“While our two main sources of revenue – production and advertising – were down significantly in the first half of the year and the outlook remains uncertain, today we are seeing an upward trajectory,” said Carolyn McCall, chief executive.
Hammerson looks to raise almost £1bn to get through pandemic
George Hammond in London
Shopping centre owner Hammerson is aiming to raise more than £800m to see it through the coronavirus crisis, which has caused a collapse in rental income and raised questions over the future of the retail industry.
The FTSE 250 company announced plans on Thursday to raise £274m from the sale of its 50 per cent stake in its European shopping outlet business, VIA Outlets, and a further £552m from a rights issue. If it fails to raise the cash — which equates to almost double its current market capitalisation of £435m — it risks breaching covenants with its lenders.
Coronavirus has thrown many retailers and retail landlords into crisis, and precipitated the collapse of Hammerson’s biggest rival, Intu, into administration in June.
Hammerson struggled to recoup rent it was owed by tenants, which include John Lewis and Debenhams. It has collected 72 per cent of the rent owed for the first half of the year, and just a third of what is owed for the third quarter — which is paid in advance by tenants.
German factory orders bounce back at record pace in June
Harry Dempsey in London
German factory orders rebounded by a record amount in June in a sign that industry in Europe’s biggest economy is powering back into action after easing coronavirus-related restrictions.
Incoming orders rose 27.9 per cent in June from a month earlier, the Federal Statistics Agency revealed on Thursday, after plunging by a record volume in April. The increase in June was the largest since records began in 1991 and almost three times as much as the jump in May. Analysts at SEB said that the rise “showed a significantly larger increase than expected”.
However, factory orders remained 11.3 per cent lower compared with February 2020 before restrictions had been put in place to stop the spread of coronavirus in Germany, underlining the distance yet to be travelled to attain a full recovery from the devastating impact of coronavirus.
The increase in orders from domestic customers were particularly strong at 35.3 per cent, while international orders from outside of the eurozone rose 22 per cent, most likely helped by a strong economic recovery in China.
Manufacturers of capital goods made strides, as orders rose 45.7 per cent. Meanwhile, Germany’s automotive sector staged a significant recovery, as orders rose by two-thirds. But the level of orders for automakers remained 12.2 per cent lower than pre-pandemic levels.
Turnover in Germany’s manufacturing sector rose 12.5 per cent between May and June, the statistics office added.
Carsten Brzeski, economist at ING, said that “hopes for a ‘V’-shaped rebound, not necessarily recovery, stay alive,” referring to the shrinking order books for German manufacturers over the two years prior to the pandemic.
Aviva hints at pulling UK insurer out of most international markets
Oliver Ralph in London
Aviva chief executive Amanda Blanc has hinted that she could pull the insurer out of most of its international markets as she focuses the business on the UK, Ireland and Canada.
Aviva’s biggest business is in the UK but it also operates in continental Europe, Asia and north America.
Ms Blanc, who was appointed last month, said: “We will focus Aviva on our strongest businesses in the UK, Ireland and Canada and aim to be the UK’s leading insurer.
We are going to focus on those businesses where we have the necessary size, capability and brilliant customer service to generate superior shareholder returns. This is where we will invest and grow.
She was speaking as Aviva reported results for the first half of 2020. The company resumed dividend payments after suspending them earlier in the year because of the coronavirus crisis.
Glencore scraps $2.6bn dividend
Neil Hume in London
Glencore has decided not to pay a proposed $2.6bn dividend after reporting a drop in half-year profits due to weaker commodity prices and the impact of the coronavirus pandemic.
The Swiss-based miner and commodity trader said it was focused on strengthening its balance sheet as net debt rose 12 per cent to $19.7bn in the six months to June.
The increase in borrowings came as Glencore tapped its credit lines to take advantage of falling oil prices in March and April to buy cheap barrels of crude and sell them in the futures market for a profit.
As a result Glencore’s ‘marketing’, or trading arm, reported a record earnings before interest of $2bn, helping to offset a weak performance from its mining arm, which was impacted by lower prices for thermal coal – one of its key commodities – and lockdowns in South Africa and South America.
This led Glencore to report adjusted earnings before interest, depreciation and amortisation of $4.8bn in the six months to June, down 13 per cent on the same period a year ago but ahead of market expectations.
Overall, Glencore announced a net loss of $2.6bn for the period after taking $3.2bn of impairment charges, including a $1bn hit on the value of its struggling Colombian coal assets.
Glencore chief executive Ivan Glasenberg said he expected net debt to be within the company’s target range of $10bn-$16bn by the end of the year.
Notwithstanding our cash-generative business and secure liquidity positions, the Board has concluded that it would be inappropriate to make a distribution to shareholders in 2020, instead prioritising the acceleration of net debt reduction.
ING sets aside additional €1.3bn as quarterly profit plunges 79%
Nicholas Megaw in London
ING, the Netherlands’ largest bank, has become the latest major European lender to report a rising impact from coronavirus-induced loan defaults, causing profits in the second quarter to plunge 79 per cent.
The Amsterdam-based lender, which runs retail banks in more than a dozen countries, set aside an additional €1.3bn to deal with expected future defaults, following on from a €661m provision in the first quarter.
The figure was higher than consensus analyst forecasts of €1.1bn, though some had been braced for an even larger charge after a cautious update ahead of the results last week.
ING warned last week that it would take a more than €300m writedown on goodwill linked to previous acquisitions, echoing a similar move by fellow multinational bank Santander.
The majority of ING’s provisions and writedowns were centered on its corporate banking division, which fell to a net loss of €302m
Bank of England holds rates
Delphine Strauss in London
The Bank of England has tempered its previous prediction that the UK economy would rebound swiftly from the recession caused by the coronavirus crisis, saying on Thursday that GDP would not exceed pre-pandemic levels until the end of 2021.
The monetary policy committee (MPC) left interest rates on hold at 0.1 per cent with its stock target for asset purchases also unchanged at £745bn.
It said the initial hit from lockdown measures had not been quite as severe as it had projected in May, although it still expected output to be more than 20 per cent lower in the second quarter of 2020 than it had been in the final quarter of 2019.
The MPC was also more optimistic about the outlook for unemployment than it had been in May, predicting the jobless rate would peak at about 7.5 per cent at the end of this year before declining gradually.
Consumer price inflation was expected to fall further below target, averaging around ¼ per cent in the latter part of the year, and to be around the MPC’s 2 per cent target in two years’ time.
The BoE, while cautioning that medium-term forecasts were unusually uncertain, said output would not exceed the level reached at the end of 2019 before the end of 2021.
Sterling rose following the interest-rate decision and economic forecasts, and was recently 0.4 per cent higher at $1.3160.
Unicredit net profit drops 50% as Covid hits fees in second quarter
Silvia Sciorilli Borrelli in Rome
Lower fees across the second quarter resulted in a 5 per cent fall in revenues for UniCredit as Covid-19 lockdown restrictions took its toll across the lender’s core markets. Net profit dropped by 50 per cent.
Italy’s largest lender by assets said its total revenue was €4.2bn in the second quarter, down 4.8 per cent compared with the previous quarter and down 7 per cent year-on-year.
Net profit for the quarter was €500m, down 50 per cent compared with a year earlier.
Commercial and investment fees suffered a negative impact. Commercial fees were €1.4bn, down almost 12 per cent year-on-year while investment fees stood at €487m, down 16.8 per cent over the period.
The lender said it started to see signs of improvement in June in Italy, Germany and Austria. Overall, lower costs across the period partially offset the lockdown’s impact, the bank said.
Toyota ekes out quarterly profit despite coronavirus disruptions
Kana Inagaki in Tokyo
Toyota has defied a coronavirus-driven collapse in sales and plant closures to become one of the few global carmakers to eke out a quarterly profit.
Shares in the world’s second-largest carmaker rose nearly 3 per cent on the steady results, which were backed by a faster-than-expected recovery of sales in China and a reduction in business expenses amid shorter working hours and a shutdown of travel.
For the April to June quarter, Toyota reported a 74 per cent year-on-year drop in net profit to ¥158.8bn ($1.5bn). While that came in below analyst expectations, the Japanese group outperformed most of its rivals from Volkswagen, General Motors to Nissan which all suffered losses during the three months.
The profits came even as Toyota saw its global vehicle sales drop 32 per cent to 1.8m units during the quarter with markets in the US and Europe hit particularly hard.
The company also disclosed its annual net profit guidance for the first time, projecting a 64 per cent drop to a ¥730bn profit. It maintained its operating profit forecast of ¥500bn for the fiscal year through March 2021.
Spanish employers face dilemma over furloughed workers
Ian Mount in Barcelona
Like many business owners in Spain’s beleaguered tourist sector, Francisco Muñoz is facing a difficult choice. When lockdown began in March, Mr Muñoz put the 12 employees of his Bubó Tapas Bar in Barcelona’s El Born district on Spain’s furlough regime.
But even when confinement ended, he kept the bar closed — first because health regulations halved its capacity and the city authorities had rejected his request for outdoor tables, and then because local outbreaks brought international tourism to a halt again.
Now rising costs are squeezing his business as the latest extension of the furlough scheme — which is set to expire at the end of September — increases his contribution to social security payments for his furloughed employees to €5,000 per month.
Read more here
Second wave and restrictions in Victoria impact heavily on Australian economy
Jamie Smyth in Sydney
A second wave of Covid-19 infections in Australia’s second most populous state of Victoria – and the subsequent imposition of tough new restrictions – will blow a A$10bn-A$12bn ($7.2bn-$8.6bn) hole in the country’s economy in the September quarter, according to government forecasts.
Prime Minister Scott Morrison said on Thursday the pandemic was expected to detract 2.5 per cent from GDP in the three months to end September and the national unemployment rate could now peak at 10 per cent rather than the previously forecast high of 9.25 per cent.
“This is a heavy blow, a heavy blow,” he told journalists.
Mr Morrison said 80 per cent of the economic costs would stem from Victoria. The remainder would result from the impact on confidence in other states and supply chain interruptions linked to the shutdown of some industries.
Australian authorities are battling a fast-spreading outbreak in Melbourne, where 471 new cases were reported on Thursday, bringing the total number in the state to almost 13,500. The state government has imposed a nightly curfew and closed all but essential businesses.
Australia enjoyed significant early success in suppressing the spread of the virus, following an outbreak in February. But a second wave of infections in early July, linked to blunders in Victoria’s hotel quarantine system, has forced the state to implement a second lockdown and request assistance from Australian Defence Forces.
Philippines GDP drops at fastest rate since 1981
Alice Woodhouse in Hong Kong and John Reed in Bangkok
The Phillipine economy contracted at the fastest rate since 1981 in the second quarter, slipping into a recession, following the introduction of strict lockdown measures to prevent the spread of coronavirus.
The country’s economy shrank 16.5 per cent in the three months to the end of June compared to the same period in 2019. Economists polled by Reuters had forecast a 9 per cent drop.
The reading for the second quarter comes after 0.7 per cent fall in the first three months of the year following the disruption caused by the eruption of the Taal volcano south of Manila. The fall in the second quarter pushed the economy into a technical recession, which is defined as two consecutive quarters of contraction.
“A failure to contain the virus, continued restrictions to movement and inadequate policy support mean the Philippines is also likely to experience one of the region’s slowest recoveries,” said Alex Holmes, Asia economist at Capital Economics.
Mr Holmes said lockdown, which was reimposed on metro Manila and surrounding regions this week after a spike in infections, would further weigh on recovery.
The Philippines has reported nearly 116,000 Covid-19 cases and 2,123 deaths from the disease to date, the second highest number for both indicators of any country in south-east Asia, after Indonesia. It recorded 3,463 new infections recorded on Wednesday.
The Philippine Statistics Authority said the main sectors contributing to the fall were manufacturing, construction and transportation.
Twitter freezes account of Trump presidential campaign
Hannah Murphy in San Francisco and Demetri Sevastopulo in Washington
Twitter froze the account of the Trump campaign on Wednesday for violating its misinformation rules after it posted a video in which the US president said children were “almost immune” to coronavirus.
The clampdown came just hours after Facebook removed the same post from Donald Trump’s personal account on the platform.
Twitter said on Wednesday that the tweet from the @TeamTrump account, which showed a video of the president in a Fox News interview, was “in violation of the Twitter rules on Covid-19 misinformation”.
“The account owner will be required to remove the tweet before they can tweet again,” the spokesperson added.
Facebook had taken action on the same post, saying the video “includes false claims that a group of people is immune from Covid-19 which is a violation of our policies around harmful Covid misinformation”.
Read more here
China reports 27 new Covid-19 cases in Xinjiang
Health authorities in China reported a further 27 Covid-19 cases in the western region of Xinjiang to the end of Wednesday as new infections slow.
The outbreak in Xinjiang, which is home to China’s Uighur ethnic minority, was first discovered in mid-July in the regional capital Urumqi. The new cases take the official tally for the outbreak to 635.
Officials in Urumqi launched mass testing and imposed restrictions on the movement of people to limit the spread of the virus.
Liaoning, which discovered an outbreak in the port city of Dalian in late July, reported a further three cases. The province in China’s north-east has recorded 93 cases since July 22, according to FT calculations.
A further seven imported cases take China’s official Covid-19 tally to 84,528.
Recruiters report sharpest rise in UK job seekers since 2008
Delphine Strauss in London
UK recruiters are reporting the steepest rise in the number of people seeking work since the depths of the financial crisis, as companies dismiss staff who had previously been furloughed.
The increase in the supply of temporary staff in July was the biggest in 23 years of records, according to the Recruitment & Employment Confederation.
Its latest monthly survey, conducted with KPMG, showed that more than four-fifths of recruiters reported increases in staff availability, with the supply of permanent staff rising at the sharpest pace since December 2008.
This follows seven years up to the start of the Covid-19 pandemic, when most recruiters reported finding it harder to fill posts.
Read more here
Kim Jong Un sends aid to locked down border city
Edward White in Wellington
Kim Jong Un has ordered officials to send food and money to Kaesong almost two weeks after the border city was locked down over fears of coronavirus transmission, according to North Korean state media.
Pyongyang in late July declared a state of emergency in the city after a North Korean defector returned from South Korea in late July. The move marked the first time the secretive state has acknowledged the global pandemic has potentially breached its borders.
State news agency KCNA reported on Thursday that the decision to send a “special supply of food and funds to the city to stabilise the living [conditions] of its citizens” came at a meeting held by Kim and top officials on Wednesday.
Kaesong, which is located near the demilitarized zone separating the two Koreas, remained “completely locked down under the state’s maximum emergency system”, according to the report.
International experts have warned that any coronavirus outbreak threatens to devastate North Korea.
Its healthcare system is incapable of handling a serious crisis with a dearth of basic preventive equipment. Many of the country’s 25m people already suffer ill health.
North Korean watchers — including a US general, top Japanese officials and foreign health experts who have worked inside the country — have also raised doubts over whether Pyongyang’s sweeping restrictions on travel and trade, in place since late January, have prevented coronavirus from spreading inside the country.
India’s yogi tycoon angers critics with coronavirus ‘cure’ kit
Stephanie Findlay and Jyotsna Singh in New Delhi
As the world’s leading pharma companies race to develop vaccines for coronavirus, one man in India claims to have already found the cure.
Baba Ramdev, a black-bearded yoga televangelist close to Prime Minister Narendra Modi, is pushing ahead with sales of coronavirus kits containing traditional ayurvedic remedies, despite official warnings against branding them as a cure for the disease.
Mr Ramdev and his company, Patanjali Ayurved, have emerged as among the corporate winners in a country that is one of the hardest hit by coronavirus. But his controversial medications have drawn fierce opposition from critics who say India’s ayurveda industry should be better regulated.
Read more here
Asia-Pacific stocks diverge, gold holds near record high
Asia-Pacific stocks were mixed and gold remained near a record high as negotiations continued in Washington over a further round of economic stimulus.
The Topix in Japan was down 0.4 per cent, South Korea’s Kospi added 0.9 per cent and the S&P/ASX 200 in Australia rose 0.3 per cent. Futures tip the S&P 500 to open up 0.1 per cent.
Mitch McConnell, the Senate’s top Republican, has said the Senate will be in session next week, delaying summer holidays in a bid to find agreement on the stimulus package.
Overnight on Wall Street, the S&P 500 closed 0.6 per cent higher, shrugging off an employment report that suggested recovery in the labour market had slowed following a resurgence in coronavirus cases.
Gold, which is seen as a haven in times of uncertainty, dipped 0.2 per cent to $2,035 a troy ounce after hitting a record high on Wednesday.
The dollar index, a measure of the greenback against a basket of peers, was holding steady after retreating in the previous session on disappointing payroll figures.
Etsy sales surge on rush to buy face masks
Dave Lee in San Francisco
Etsy, the marketplace for handmade products, reported an enormous surge in sales for the second quarter — helped by visitors to its site buying almost 30 million face masks.
In the early days of the pandemic, Etsy issued a call-to-action to its sellers to turn their skills to producing masks. Since then, 100,000 individual sellers have sold at least one mask, Etsy said, with customers on the site searching for “face mask” and other related terms around 11 times per second.
In total, Etsy’s gross merchandise sales (GMS) — the total value of all goods sold on the platform — increased 145 per cent on 2019’s second quarter, to $2.7bn. That figure includes $227m from Reverb, the musical instrument marketplace owned by Etsy.
Total revenue for the period was $429m, versus $181m in 2019. Net income was up 429 per cent.
Etsy saw strong growth in non-mask sales too, it was keen to stress, easing investor fears that a lack of summer weddings would hit the site hard. Etsy’s active buyer base is up 39 per cent to 60m, and non-mask GMS in the quarter was up 93 per cent, year-on-year.
“We have a solid foundation for long-term growth and are well positioned to build on our momentum,” said Josh Silverman, Etsy’s chief executive.
Its stock was up by around 4 per cent in after-hours trading, having closed on Wednesday at an all-time high — a 200 per cent improvement on the start of the year.
US reports biggest jump in deaths in a week
The US reported its biggest one-day jump in coronavirus deaths in a week, with several hard-hit sunbelt states revealing near-record daily increases in fatalities.
A further 1,401 people in the US died from the disease, according to data from Covid Tracking Project, up from 1,176 on Tuesday.
Texas (236), Florida (225) and California (202) reported the largest one-day jumps among states. Georgia (142) had a record jump.
The daily death toll in the US has exceeded 1,000 a day 13 times in the past 16 days, resembling patterns previously seen in May. A further 51,825 people in the US tested positive for Covid-19 over the past 24 hours, up from 51,568 on Tuesday.
Over the past week, the US has averaged 57,019 cases a day, the lowest rate since July 11, according to Financial Times analysis of Covid Tracking Project data.
Texas (8,706), Florida (5,409) and California (5,295) reported the largest one-day jumps in new cases among states.
Florida’s total number of cases since the pandemic began topped 500,000, a tally second only to California, while a jump of 3,765 in Georgia made it the fifth US state to have confirmed more than 200,000 infections.
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Chicago Mayor Lori Lightfoot announced on Wednesday that school students will restart the academic year learning from home as the most populous city in the Midwest contends with a renewed rise in coronavirus cases.
New York City is expected to set up “checkpoints” as part of an effort to enforce quarantine for travellers from other parts of the US. The plans call for a checkpoint at Penn Station, a major train hub. Similar measures have been taken at New York airports and other entry points, such as bridges and tunnels.
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