U.S. Was Hit Earlier Than Thought; Singapore Surge: Virus Update

(Bloomberg) — The coronavirus caused two deaths in California in early and mid-February, suggesting the pathogen was circulating in the U.S. weeks earlier than health officials thought. Singapore reported more than 1,000 new cases for the third day, pushing total infections past 10,000.

Italy plans to more than double a stimulus package, while Spain will seek to extend emergency powers. The European Central Bank may discuss new help for lenders on Wednesday, while the U.S. Senate sent a $484 billion package of new relief funds to the House for likely approval on Thursday.

The Chinese ambassador to the U.S. called for a “serious rethinking” of relations between the world’s biggest economies in the face of the pandemic. Earlier, President Donald Trump stopped short of a sweeping immigration ban, but hinted at possible additional restrictions.

Key Developments

Virus Tracker: Cases top 2.5 million; deaths exceed 175,000China’s coronavirus handling aggravates European diplomatsMoon calls for Korean ‘New Deal’ to create jobs after pandemicFar-right social media helps galvanize U.S. quarantine protestsIndia’s young population could make herd immunity work thereIsraeli investors proposed a build-it-yourself breathing machine

Subscribe to a daily update on the virus from Bloomberg’s Prognosis team here. Click VRUS on the terminal for news and data on the coronavirus.

Corporate Roundup (6:50 a.m. NY)

Evercore Inc. said it would cut jobs and warned revenues and operating margins in upcoming quarters will be significantly affected. AT&T withdrew forecast and said it had an impact of about $600 million from covid-19. Earlier, Netflix Inc. reported explosive growth as locked-down families binge-watch its programs and Chipotle Mexican Grill Inc.’s loyalty program is helping it connect with customers. Macy’s is looking to raise as much as $5 billion in debt, CNBC reported, while United Airlines Holdings Inc. and Delta Air Lines Inc. are in talks with banks on new debt issuance.

In Europe, Heineken NV canceled its interim dividend and said its board will take a pay cut to mitigate the impact. Kering said it doesn’t see a recovery in the U.S. or Europe before at least June or July after sales at its flagship brand Gucci tumbled. Meanwhile, UniCredit SpA became the first big European bank to try to quantify the impact of the coronavirus, setting aside almost $1 billion to cover potential loan losses stemming from the outbreak. For more on European earnings, click here.

U.K. Had ‘Ample’ Opportunity to Join EU Procurement (6:30 a.m. NY)

The U.K. was “aware of the work that was ongoing” on an EU program for procurement of medical supplies related to the pandemic, European Commission spokesman Stefan de Keersmaeker said. The British government “had ample opportunity to express its wish to participate in a joint procurement if it wanted to do so,” Keersmaeker told reporters in Brussels.

That comes a day after the most senior official in the U.K. Foreign Office reversed his testimony to a parliamentary committee hours after telling it that Britain missed out on a EU-wide effort to procure medical supplies because of a “political decision.”

Death Hit U.S. Weeks Earlier Than First Thought (6:28 a.m. NY)

The coronavirus caused two deaths in California in early and mid-February, new tests show, suggesting the pathogen was circulating in the U.S. weeks earlier than health officials believed. Two residents of Santa Clara County, California who died at home on Feb. 6 and Feb. 17 were infected with the virus, according to a statement Tuesday from the local medical examiner’s office.

Previously, the first report of a U.S. death from Covid-19 had come on Feb. 29 in Washington state. Days afterward, two earlier deaths in the state were attributed to the illness, both occurring on Feb. 26.

German Public Deficit to Hit 7% of GDP (6:22 a.m. NY)

Germany’s public-sector deficit will likely widen to more than 7% of gross domestic product this year due to extra spending to tackle the coronavirus crisis. Public debt will also increase after several years of declines, rising to about 75% of total output.

The federal government deficit is set to widen to almost 5% of GDP in 2020, the finance ministry projected.

Italy to Double Stimulus, Spain to Extend Emergency (5:10 p.m. HK)

Italy and Spain — the worst-hit countries in Europe — are preparing more resources to limit the damage to their economies. Ahead of a planned restart schedule, Italian Prime Minister Giuseppe Conte’s cabinet is expected to seek parliamentary approval to broaden the budget deficit by about 55 billion euros ($60 billion).

Spain reported a small increase in the number of new cases, though the numbers remain steady. The country’s parliament on Wednesday will vote on Prime Minister Pedro Sanchez’s request to prolong a state of emergency for two weeks through May 9. Spain has the most extensive outbreak in Europe and made its first move on Tuesday to relax curbs. Children under 14 will be allowed out of their homes as of April 26 for walks, in the company of an adult and following social-distancing and health rules.

Germany’s ruling parties will hold talks on the virus response on Wednesday evening amid tension over the pace of loosening curbs. The number of new coronavirus cases in Germany stayed close to a three-week low as the country allowed small shops and hardware stores to open starting on Monday.

HK Tycoon Pleads for Help for His Newspaper (5:05 p.m. HK)

Hong Kong pro-democracy media mogul Jimmy Lai pleaded for help for his flagship newspaper the Apple Daily, as advertising income slumps to almost nothing due to political retaliation and the Covid-19 pandemic.

The paper, part of Lai’s Next Digital Ltd., has championed the city’s months of protest against Beijing’s tightening grip and faces substantial losses and a decline in subscriptions, the tycoon said in a video statement. Its number of subscribers has dropped to below 600,000 from 800,000, he said, adding he had personally poured in about HK$550 million ($71 million) to keep the publication going.

Lai, 72, has long been denounced as a traitor by Chinese state media and was named as one of the city’s “Gang of Four” behind protests that erupted last year in opposition to legislation that would allow the transfer of criminal suspects to the mainland.

First Covid-19 Clinical Trial to Start in Germany (5 p.m. HK)

BioNTech SE and Pfizer Inc. said the German regulatory authority, the Paul-Ehrlich-Institut, has approved the Phase 1/2 clinical trial for BioNTech’s BNT162 vaccine program. The companies are jointly developing BNT162.

The trial is the first clinical trial of a COVID-19 vaccine candidate to start in Germany, the companies said, and is part of a global development program. Pfizer and BioNTech will also conduct trials for BNT162 in the U.S. upon regulatory approval, expected shortly.

BioNTech surged 18% in U.S. premarket trading.

Americans’ Fear of Job Loss Surges to 45-Year High (5 p.m. HK)

A quarter of working Americans believe it’s “very likely” or “fairly likely” they will lose their job or be laid off in the next 12 months, according to a Gallup poll. That’s a 17 percentage-point swing in one year, from matching its lowest reading since 1975 to its highest, driven by the rapid impact of the coronavirus pandemic on the U.S. economy. The survey, released Wednesday, was conducted April 1 through 14.

North Korea to Issue Public Bonds (4:40 p.m. HK)

Authorities have completed preparations to issue public bonds for the first time in 17 years as part of efforts to overcome difficulties posed by coronavirus outbreak, Daily NK reported, citing an unidentified source in North Korea.

U.K. Under-Invested in Testing Infrastructure: Roche CEO (4:20 p.m. HK)

The U.K. only has half the testing capacity of other European countries such as Switzerland when it comes to running Roche Holding AG’s most efficient equipment for Covid-19 tests, Chief Executive Officer Severin Schwan said on a call with reporters. Countries struggling to scale up pandemic screening failed to invest enough in health-care infrastructure for decades, he said.

“They are just not able to ramp up because they don’t have the know-how, they don’t have the personnel, because they simply don’t have the capabilities,” Schwan said. “Which is not surprising, because you cannot just start up a lab on a green field out of nothing.” Among those who did invest, he cited Germany, South Korea and Singapore.

Russia Cases Rise 10% (3:49 p.m. HK)

Confirmed coronavirus cases rose by 5,236, the government’s virus response center said. That is a small decrease from the 5,642 infections reported on Monday, but the number of new daily cases has now remained above 4,000 for six straight days. The death toll rose by 57 to 513.

Singapore Sees Another Jump in Cases (3:15 p.m. HK)

The total number of coronavirus cases in Singapore exceeded 10,000 on Wednesday as infections among migrant workers living in dormitories continued to surge. As of noon, the city-state preliminarily recorded 1,016 new cases, bringing the total number of infections to over 10,000. Of the new cases, the vast majority are work permit holders living in dormitories across the island, while 15 cases are Singaporeans or permanent residents.

Low-wage foreign workers comprise a fifth of the overall population in Singapore, but largely live separate from the local community. More than 200,000 of the laborers, many of whom toil on Singapore’s construction sites, live in dormitories.

China Plans Tighter Controls to Counter Social Unrest (3:09 p.m. HK)

The Chinese government is ramping up efforts to curb emerging social unrest in the aftermath of the coronavirus outbreak, as the country faces an economic downturn that could leave millions of people unemployed.

The ruling Communist Party has formed a task force of law enforcement officials to “defend political security” and “resolve conflicts related to the coronavirus outbreak,” according to a report from the official Xinhua News Agency. The group held its first gathering on Tuesday.

China Considers Late May for Legislative Gathering (2:31 p.m. HK)

China is considering holding its highest-profile annual political meeting in late May, according to people familiar with the matter, after it was postponed for the first time in decades amid the coronavirus pandemic. The gathering of the National People’s Congress, usually runs for about two weeks in Beijing and is attended by President Xi Jinping and other top leaders. At least one set of dates being considered is May 23-30, according to the people, who asked not to be identified.

The NPC is the venue for announcing key annual economic targets. This year’s goal’s will be closely watched after the pandemic pushed China’s economy into its first contraction in decades in the first quarter.

Pandemic May Set Back 5G Rollouts in Europe (1:31 p.m. HK)

Europe risks falling further behind on fifth-generation mobile networks as phone carriers postpone upgrades to the latest cellular technology due to coronavirus lockdowns, Ericsson AB said.

The pandemic is already making it harder for the Ericsson, a key communications equipment supplier, to deliver its services, though this had only a limited effect on operating income and cashflow during the first quarter, the company said in a statement.

Taiwan Navy Ship Outbreak Raises Concerns (12:12 p.m. HK)

A coronavirus outbreak on one of Taiwan’s navy ships has raised concerns that a re-infection could threaten one of the world’s success stories in the fight against the pandemic.

Twenty-seven sailors on a navy-supply ship were confirmed to have the virus shortly after it returned from a visit to Palau this month. Taiwan’s defense minister apologized Tuesday night and said he was willing to resign if requested to do so by President Tsai Ing-wen. Tsai said Wednesday an investigation is under way and punishment will follow its completion.

South Korea Plans Third Extra Budget (10:51 a.m. HK)

South Korean President Moon Jae-in ordered the government to draw up third extra budget to help key industries suffering from coronavirus outbreak and to secure jobs.

A 40 trillion won ($32 billion) fund will be created to provide liquidity and payment guarantees to companies, Moon announced after leading emergency meetings on the economy on Wednesday. An existing program will be expanded by 35 trillion won, to help mom and pop stores, purchase corporate bonds and provide liquidity to companies with lower ratings. In addition, some 10 trillion won will be used to help stabilize employment.

China’s Banks Saw Surge in Bad Loans (10:36 a.m. HK)

Bad debt at Chinese banks climbed in the first quarter after the coronavirus outbreak brought the world’s second-largest economy to a standstill.

The non-performing loan ratio rose to 2.04% at the end of March, the China Banking and Insurance Regulatory Commission said on Wednesday. The ratio stood at 1.86% in December. Lenders delayed 880 billion yuan ($124 billion) in loan repayments for smaller businesses in the period, the regulator said at a press briefing in Beijing.

European banks are also bracing for a surge in troubled loans, along with a hit to trading revenue.

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