World coronavirus dispatch: US firms slashing costs; salary cuts at Disney

A medical staffer holds the hand of a patient, in the ICU of the Bassini Hospital, in Cinisello Balsamo, near Milan, Italy, Tuesday, April 14, 2020 | Photo: AP/PTI
In a sure sign that a major economic crisis is at hand, Goldman Sachs has said S&P500 listed companies might slash their spending by 33 per cent this year. This will have a massive cascading impact on businesses – from software to advertising and even workspaces – that sell to these companies. A similar pullback in spending is expected across corporate majors in Europe and Asia, too. Read about it here.

Let’s look at the global statistics:

Total confirmed cases: 2,417,977

Change over previous day: 70,102

Total deaths: 166,066

Total recovered: 3,882,022

Nations hit with most cases: US (759,786), Spain (200,210), Italy (178,972), France (154,098) and Germany (145,743).

Source: Johns Hopkins Coronavirus Research Center

Spain’s death toll drops to one-month low: Spain said 399 people had died of Covid-19 in the country over the past 24 hours, in what was its lowest daily number of deaths in four weeks. The latest figures, which showed a slight drop from Sunday, when 410 people had died, brought some relief to a country which had suffered the third-highest number of virus deaths, the first two being the US and Italy. Read more here.

US stimulus for small businesses, hospitals: The US is close to signing off on a $500-billion relief plan targeted at small businesses and hospital infrastructure under strain from the coronavirus situation. This will be the second relief aid by the US, which last month announced a $2.2-trillion package. Read more here.

Richard Branson says his airlines are on the brink of collapse: British billionaire Richard Branson says his airlines in the UK and Australia, Virgin Atlantic and Virgin Australia, won’t survive the coronavirus crisis without state support. He has already committed to $250 million towards both brands to save jobs. But there was “no money coming in and lots going out”, he said in a letter to staff. Read more here.

Fitch cuts Hong Kong's rating: Credit rating agency Fitch downgraded Hong Kong’s sovereign credit rating for a second time in less than a year, warning that pressure from the coronavirus pandemic had exacerbated negative trends. The ranking was lowered from AA to AA-, with a 'stable' outlook. Read more here.

Nations are tentatively easing lockdowns: From tattoo parlours and salons in Denmark, to beaches in Australia, and bookstores in Germany – nations around the world on Monday took advantage of their flattening coronavirus infection curves to tentatively ease lockdowns, edging towards a new yet unknown state of normal. China, where the virus had a relentless march, has already opened many parts after two weeks of strict lockdown. Read more here.

Massive salary cut at Disney: Walt Disney, one of the biggest media conglomerates in the world, will stop paying more than 100,000 employees, or nearly half of its workforce, this week. Suspending pay for thousands of so-called cast members will save Disney up to $500 million a month across its theme parks and hotels, which have been shut in Europe and the US for almost five weeks. Read more here.

Specials

Losing Face – the rise of the mask, what’s lost behind it: The rise of the protective face mask in our civilisation has abruptly removed half the face from human interactions. With it has come a removal of important visual cues that people have used for millennia to communicate in the public arena. Read it here.

The effectiveness of plasma treatment for coronavirus: The UK is using the blood of coronavirus survivors to treat patients ill with the disease. The hope is that the antibodies they have built up will help clear the virus in others. The US has already started a major project to study this, involving more than 1,500 hospitals. When a person has Covid-19, their immune system responds by creating antibodies, which attack the virus. Over time, these build up and can be found in the plasma, the liquid portion of the blood. Read more here.

Long Reads

Coronavirus crisis might take down once mighty Deutsche Bank: One of the largest banks in Europe, and still a force in Wall Street debt markets, Deutsche Bank has one the largest piles of hard-to-value holdings at big banks. In June last year, Deutsche Bank underwent a massive restructuring, cut back some global operations and brought in a new CEO. But the recovery wasn’t complete before the coronavirus crisis hit. The bank has posted losses in the past five quarters and survived because of multiple government guarantees. The future looks grim. Read more here.

Opinion

Conor Sen, a portfolio manager at New River Investments, a top US financial advisor, talks about the exaggerated cost of running businesses in the post-covid era. Physical operations, he says, will require an extremely high amount of labour: cleaning crews, drivers, temperature checkers, and so on. It will be a “profitless recover”, whenever it happens. Read his comments here.

Podcast

Emerging markets have never experienced a crisis like this before: This Bloomberg podcast helps understand the experience of developing countries reeling under the coronavirus crisis. Listen to the podcast to learn which countries are particularly vulnerable, and what policies might allow for a way out.


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