Europe braces for summer ‘like no other’
Stocks dropped for the second day in a row after the Nasdaq broke its 6-day winning streak on Tuesday. Investors and health officials appear to be growing increasingly worried about a potential second wave of Covid-19 cases and further economic downturn as states and foreign governments move ahead with lifting restrictions. Early data out of U.S. states that are most aggressively reopening indicate heightened virus spread, according to former FDA Commissioner Dr. Scott Gottlieb.
This is CNBC’s live blog covering all the latest news on the coronavirus outbreak. All times below are in Eastern time. This blog will be updated throughout the day as the news breaks.
- Global cases: More than 4.3 million
- Global deaths: At least 293,514
- US cases: More than 1.3 million
- US deaths: At least 82,806
The data above was compiled by Johns Hopkins University.
2:03 pm: New York has paid $7.4 billion in unemployment claims to roughly 1.7 million residents
Melissa DeRosa, secretary to Gov. Andrew Cuomo, said during a press briefing that the state’s department of labor has paid $7.4 billion to roughly 1.7 million residents struggling with unemployment in the first seven weeks of the Covid-19 crisis.
DeRosa said that figure is roughly six times the number of claims that were filed during the 2008 financial crisis when 300,000 New Yorkers lost their job. Some residents have said they’ve struggled to apply and receive unemployment in the state, citing months-long waiting periods since they first applied.
Cuomo said the state is working toward processing as many claims as they can without approving residents who don’t meet the federal criteria. “You want to get it done in a day, but you want to get it done right,” he said. —Noah Higgins-Dunn
1:53 pm: Colby College might delay fall semester
Colby College, a small liberal arts school in Maine, may consider delaying its fall semester to ensure in-person classes can take place, according to trustee Bob Diamond.
“One of the things that we’ve decided as a leadership of the college, and as of a board of trustees, that even if we had to delay the first semester as late as Decemberor January, we could still run a full year of in-person education,” the former Barclays CEO said on CNBC’s “Squawk Box.
“Higher education institutions across the country are grappling with the question of how, or whether, students can safely return to campuses in the fall amid the threat of Covid-19. —Kevin Stankiewicz
1:05 pm: The future of flexible workspaces
What is the future of flexible workspaces, and how is the industry responding to the coronavirus pandemic?
We’re chatting live with Julie Whelan, the head of Americas Occupier Research at CBRE and CNBC’s tech editor, Ari Levy.
Have a question about the future of work? Leave it in the comments on our Facebook post.
1:00 pm: Retail sales demand could evaporate forever
A sign in a store window as the state of Florida enters phase one of the plan to reopen the state on May 04, 2020 in Saint Augustine, Florida.
Sam Greenwood | Getty Images
Anywhere from 5% to 10% of pre-Covid-19 demand for apparel and shoes could be decimated permanently, as “lost store volume can’t entirely be made up online,” Wells Fargo retail analyst Ike Boruchow said in a note to clients.
It will likely be a while for shoppers to return to stores, even as they reopen during the pandemic. It could take at least 9 months for sales levels to reach their “new normal,” Wells Fargo is predicting.
Meantime, activity online will keep picking up. About 25% of apparel and footwear purchases are made on the internet in the U.S. today, Wells Fargo said. But that could hit 30% because of the pandemic, it said. —Lauren Thomas
12:53 pm: Conde Nast will lay off roughly 100 US employees
Magazine giant Conde Nast is laying off nearly 100 employees in the U.S., according to a memo obtained by CNBC.
The company will furlough roughly 100 more employees and reduce work hours for a small amount, according to the memo. Conde Nast will inform the affected employees Wednesday.
“These decisions are never easy, and not something I ever take lightly,” Chief Executive Robert Lynch wrote in the memo to employees. Several publishers have been affected by a sharp decline in advertising revenue brought about by the Covid-19 pandemic, causing some to reduce its workforce in an effort to cut costs. —Jessica Bursztynsky
12:49 pm: DOJ’s top antitrust official responds to Warren and Ocasio-Cortez push to halt corporate mergers
The country’s top antitrust official, Makan Delrahim, told CNBC that placing a moratorium on big corporate mergers would be “misguided,” after lawmakers have pushed for deal bans in Congress.
Sen. Elizabeth Warren, D-Mass., and fellow progressive Rep. Alexandria Ocasio-Cortez, D-New York, want a moratorium on deals for companies with more than $100 million in revenue, as well as some private equity funds and hedge funds. But Delrahim told CNBC’s Andrew Ross Sorkin he believes deals may, in fact, be necessary to help companies manage their liquidity, and to keep employees in their jobs.
He also walked through how he would determine whether a company proposing a deal fits would qualify for the “failing firm” defense, which would allow the Justice Department to approve a deal it might otherwise block.
To meet those criteria, a company must prove that it is unable to meet its financial obligations or reorganize its debt through bankruptcy and has already made a good faith effort to find a less anti-competitive buyer, Delrahim said. —Lauren Hirsch
12:33 pm: Europe’s summer vacation season will look very different this year
People relax in the sunshine in London Fields park in east London on April 25, 2020, during the national lockdown due to the novel coronavirus COVID-19 pandemic.
It will be a summer “like no other.”
That’s the frank prediction by the European Union, who unveiled new guidelines on how the tourist industry should reopen amid the coronavirus crisis.
According to the Brussels institution, staff should get training on the symptoms of Covid-19, businesses should decrease the physical presence of employees as much as possible and social-distancing measures should be applied in communal areas.
They also recommended slot bookings for meals and to use swimming pools. —Matt Clinch
12:15 pm: FBI issues warning about hackers targeting vaccine research
Hackers linked to the Chinese government are trying to steal coronavirus-related research on vaccines, treatments, and testing, the FBI and a U.S. cybersecurity agency warned.
The FBI said it is investigating “the targeting and compromise of U.S. organizations conducting COVID-19-related research by [People’s Republic of China]-affiliated cyber actors and non-traditional collectors.”
“The potential theft of this information jeopardizes the delivery of secure, effective, and efficient treatment options,” the agencies said in a joint statement.
U.S. officials have long complained that Chinese intellectual property theft has cost the economy billions of dollars in revenue and thousands of jobs and that it threatens national security. China maintains that it does not engage in intellectual property theft. —Kevin Breuninger
12:02 pm: More than 80 kids in New York City have coronavirus inflammatory syndrome, mayor says
A view outside Bellevue hospital during the coronavirus pandemic on May 1, 2020 in New York City.
Noam Galai | Getty Images
Health officials have identified 30 additional kids with pediatric multi-system inflammatory syndrome, a potentially fatal illness that doctors suspect is being caused by Covid-19 infections.
Of the New York City cases, 53 tested positive for the coronavirus or have the antibodies against the disease, suggesting they previously had the coronavirus and recovered, Mayor Bill de Blasio said at a press briefing.
Symptoms of PMIS include prolonged fever, a rash, having really red bright lips, swollen hands and feet and abdominal pains and can cause heart and kidney failure in children with Covid-19, health officials said.
The city will begin a digital advertising campaign on Wednesday to warn residents about the disease, de Blasio said. —Noah Higgins-Dunn
11:43 am: Amazon signals shipping times are returning to normal after weeks of delays
Amazon drivers begin their delivery routes as workers at an Amazon warehouse in Staten Island, New York prepare to walk off their jobs demanding stepped-up protection and pay after several workers at the facility were diagnosed with COVID-19.
Paul Hennessy | Barcroft Media | Getty Images
Amazon made several recent moves that indicate it’s recovering from coronavirus-related delays. The company informed sellers on Saturday that it would no longer restrict new shipments of nonessential goods by quantity.
Before the change, Amazon had capped the number of units that sellers could send per order to its warehouses, as it struggled to balance demand for nonessential and essential goods.
Additionally, earlier this week, Amazon added back the featured deals section and the “Frequently bought together” widget on product listings. These services were restricted for the past few weeks, as Amazon sought to limit additional purchases from shoppers.
One of Amazon’s last remaining roadblocks will be to restore one- and two-day delivery options. Next-day delivery is now starting to come back online for select cities in the U.S., but it’s not yet restored nationwide, which shows Amazon’s warehouses haven’t fully recovered. —Annie Palmer
11:29 am: Disney could take a $1 billion hit every month that parks remain closed
An empty road leads into a deserted Disney resort after it was closed due to the COVID-19 pandemic in Kissimmee, Florida on May 5, 2020.
Daniel Slim | AFP | Getty Images
Disney may have been able to reopen its Shanghai theme park, but the company is on track to lose around $1 billion in earnings before interest and taxes each month from the rest of its parks being closed due to the coronavirus pandemic.
Analysts like Bernstein’s Todd Juenger are using the reported $1 billion loss in revenue that Disney reported earlier this month during its second-quarter earnings report as a baseline to forecast future losses in the third quarter and beyond.
Juenger said it’s hard to gauge what the impact is of running the park with fewer guests in attendance. Currently, it is allowing less than 30% of its typical capacity into the park.
When Disney reopens its other parks, it is likely they will also welcome fewer guests. Expectations are that Disneyland in California and Walt Disney World in Florida will operate at well under 50% capacity. —Sarah Whitten
10:52 am: The race to find a cure or vaccine for the virus
Scientists around the world are fast-tracking work to develop a vaccine to prevent the coronavirus as businesses seek to reopen and people head back to work.
“For the world to become some semblance of the place it used to be, we’re going to have to have these vaccines,” said Dr. Bruce Walker, a professor at Harvard Medical School.
In the meantime, researchers are working to find treatments to fight the disease. On May 1, the FDA granted emergency use authorization for Gilead Sciences’ antiviral drug remdesivir. Even if the drug wins final approval from the FDA, however, infectious disease specialists and scientists say researchers will need an arsenal of medications to fight this respiratory virus. Here is a list of vaccines and drugs in development to fight Covid-19. —Berkeley Lovelace Jr.
10:38 am: US can start to reopen with current testing capacity, LabCorp CEO says
Despite concerns from both Republican and Democratic politicians as well as state health officials, the U.S. can start to reopen with the current level of testing, according to Adam Schechter, CEO of coronavirus test manufacturer LabCorp.
As governors begin to ease restrictions and reopen nonessential businesses, officials and public health specialists have repeatedly called for greater testing capacity to detect and prevent potential outbreaks. Some have called for the ability to test millions of Americans everyday in order to safely restart the economy.
“I’m not convinced that we need to have 2 to 3 million tests per day,” Schechter said on CNBC’s “Squawk Box.” “I believe that we are ready to start to open up states with the testing that’s available today and that’s only going to increase over the coming weeks.”
The diagnostics manufacturer is in talks with large employers to help them screen employees to safely get workers back in the office, he said, adding that an announcement is coming tomorrow. —William Feuer
10:30 am: Fed sees more help needed to combat the economic downturn
Federal Reserve Chairman Jerome Powell said more help may be needed from Congress to contain the economic damage from the coronavirus.
“While the economic response has been both timely and appropriately large, it may not be the final chapter,” the central bank chair said during a webcast with the Peterson Institute. Powell called the current situation “without modern precedent” in terms of its speed and severity. However, he did note that the Fed is not considering the use of negative interest rates. “That is not something that we’re looking at,” he said. —Jeff Cox
9:51 am: Mexico reopening auto industry
A potential parts shortage from Mexico for automakers reopening U.S. plants is expected to have been diverted.
Mexican President Andres Manuel Lopez Obrador is expected to lay out a road map for the country to reopen its economy, with a focus on the automotive sector, according to Reuters. Some Mexican auto factories are due to open as soon as Monday, in line with large U.S. assembly plants for the Detroit automakers.
Despite President Donald Trump’s “America First” policies and signing of the USMCA trade deal, which goes into effect July 1, the American auto industry relies heavily on Mexico for parts and vehicle production. At $93 billion, vehicles were the top import to the U.S. from Mexico in 2018, according to federal data. The Center for Automotive Research reports $60.8 billion, or 39% of auto parts used in the U.S., were imported from Mexico in 2019. —Michael Wayland
9:36 am: Dow falls 200 points as Powell sees ‘significant downside risks’
Stocks opened lower as investors digest downbeat remarks from Federal Reserve Fed Chairman Jerome Powell. The Dow Jones Industrial Average dipped 220 points, or 0.95%. The S&P 500 traded 0.8% lower while the Nasdaq Composite slid 0.5%. Powell’s remarks came after the Labor Department reported last week that a record 20.5 million jobs were lost in April.
Read updates on market activity from CNBC’s Fred Imbert and Maggie Fitzgerald. —Melodie Warner
9:30 am: Economists predict coronavirus will reverse globalization and create regional supply chains
The coronavirus crisis will fundamentally reshape global trade as businesses look to reduce their dependence on Chinese manufacturing, according to the Economist Intelligence Unit.
In a new report, the EIU predicted globalization would be reversed after the pandemic, with regional supply chains becoming the norm. Companies would be inclined to relocate their supply chains closer to home following the supply shock from the Covid-19 outbreak, analysts said.
Because of the difficulties surrounding establishing or moving of supply chains — particularly in the automotive sector — the EIU said it was likely that any major shifts would be permanent. —Chloe Taylor
9:11 am: April US producer prices see largest annual decline since 2015
U.S. producer prices declined 1.3% in April after slipping 0.2% in March, bolstering some economists’ predictions for a brief period of deflation as the coronavirus pandemic depresses demand.
The Labor Department said Wednesday its producer price index for final demand declined 1.2% in the 12 months through April. That was the biggest decline since November 2015 and followed a 0.7% increase in March.
Economists polled by Reuters had forecast the PPI falling 0.5% in April and falling 0.2% on a year-on-year basis. —Melodie Warner, Reuters
8:53 am: Hot spots of new cases predominate East Coast
8:32 am: Former FDA chief sees colleges reopening in the fall
Former FDA Commissioner Scott Gottlieb told CNBC he believes colleges and universities in the U.S. could welcome students back to campus for the next academic period.
“I think we’ll be in a position where we’re going to give a try at opening schools, opening residential college campuses in the fall because I’m hopeful that coming off of July and August, we’re going to see some declines in cases in the summer,” he said on “Squawk Box.”
White House health advisor Dr. Anthony Fauci on Tuesday cautioned higher education leaders against believing that a Covid-19 vaccine or effective therapeutic would be available by the fall. —Kevin Stankiewicz
Disclosure: Scott Gottlieb is a CNBC contributor and is a member of the boards of Pfizer and biotech company Illumina.
8:12 am: LabCorp CEO on ramping up production of at-home tests
7:25 am: Merkel urges Germans not to jeopardize progress
German Chancellor Angela Merkel speaks at the 100-years anniversary celebration of prosthesis maker Ottobock SE in Duderstadt, Germany, February 18, 2019.
Ralph Orlowski | Reuters
Chancellor Angela Merkel urged Germans not to jeopardize progress the country has made in beating back the outbreak, warning that the virus will be present for longer, Reuters reported.
Germany and some other European countries have begun to ease restrictions and reopen nonessential businesses.
The coronavirus has infected more than 173,274 people in Germany and killed at least 7,755, according to Johns Hopkins University.
“It would be depressing if we have to return to restrictions that we want to leave behind us because we want too much too soon,” Merkel told the Bundestag lower house of parliament, according to Reuters.
Germany has managed to maintain a low mortality rate compared with some other European countries such as Spain and Italy, due in part to Germany’s decision to implement widespread testing of people suspected to have the virus. Italy and the U.K., for example, only test symptomatic cases. —Will Feuer
7:18 am: Europe eager to reopen borders to salvage tourism in time for summer
The European Union is eager to reopen borders within the 27-country bloc as soon as possible in order to help the region’s lucrative tourism sector recover in time for the summer season.
The bloc is due to present draft proposals on Wednesday that will urge a return to “unrestricted free movement,” although it is wary of a second wave of infections in the region, according to Reuters.
Airlines and airports would insist that passengers wear masks, but there is no need to leave the middle seat empty on planes, the draft proposals said. People should be able to stay in hotels, eat in restaurants or go to beaches safely, the draft added.
It is not clear whether non-Europeans would be allowed to visit this summer, with the European Commission reportedly saying: “Domestic and intra-EU tourism will prevail in the short-term.” —Holly Ellyatt
Read CNBC’s coverage from CNBC’s Asia-Pacific and Europe teams overnight here: Spain daily death toll slow to decline; Tui travel firm plans up to 8,000 job cuts