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The U.S. death toll from the coronavirus that causes COVID-19 rose above 90,000 on Tuesday, as President Donald Trump again threatened to cut off funding for the World Health Organization, accusing its leaders of failing to react quickly or aggressively enough at the start of the outbreak.
In a letter to WHO Director General Dr. Tedros Adhanom Ghebreyesus, Trump leveled some of the same charges at the WHO as have been made against own administration, which has been criticized for its slow response to the crisis, for failing to manage testing and secure needed medical supplies.
Trump said the agency “consistently ignored credible reports of the virus spreading in Wuhan in early December 2019 or even earlier, including reports from the Lancet medical journal.” However, the Lancet quickly responded to say it did not publish a report in December about a virus in Wuhan, or anywhere else in China. The journal’s first reports on the crisis came in late January, just days before the WHO emergency ruling.
Trump stunned many doctors, lawmakers and one Fox News anchor when he said late Monday that he has been taking the anti-malaria drug hydroxychloroquine to prevent COVID-19, even though there’s no scientific evidence yet that it treats the coronavirus, much less prevents it.
Hydroxychloroquine is known to have potentially severe side effects, including heart-rhythm problems. Trump said that, while it was not recommended by his doctor, he requested the drug from the White House physician, Dr. Sean Conley.
Conley issued a statement late Monday, saying “we concluded the potential benefit from treatment outweighed the relative risks,” though he did not explicitly say he prescribed hydroxychloroquine to Trump, or that Trump is actually taking it.
Fox News host Neil Cavuto warned his audience that the drug can lead to fatal consequences for some people.
“A VA study showed that among a population in a hospital receiving this treatment, those with vulnerable conditions — respiratory conditions, heart ailments — they died,” Cavuto said. “I want to stress again: They died. If you are in a risky population here, and you are taking this as a preventative treatment to ward off the virus or in a worst-case scenario you are dealing with the virus, and you are in this vulnerable population, it will kill you. I cannot stress enough: This will kill you.”
The FDA in March granted an emergency use authorization to hydroxychloroquine and chloroquine as COVID-19 treatments. Since then, a number of trials have been launched, including by the National Institute of Allergy and Infectious Diseases (NIAID), which is testing it on 2,000 patients with mild and moderate cases of the virus.
“We need solid data from a large randomized, controlled clinical trial to determine whether this experimental treatment is safe and can improve clinical outcomes,” NIAID director Dr. Anthony Fauci said in announcing that trial. Trump has been touting the treatment for weeks.
See:Can hydroxychloroquine prevent a COVID-19 infection? Trump may think so — at least for himself
In Georgia, Gov. Brian Kemp’s office issued an apology after a the public health department published a chart that wrongly indicated a downward trend in COVID-19 infections, the Atlanta Journal-Constitution reported. The data suggested infections had fallen every day for two weeks, a trend that helped justify Kemp’s decision to aggressively push ahead with reopening against the advice of public-health officials.
But the data, which the paper said offered a third error in three weeks, was scrambled with dates mixed-up and in the wrong order and some experts said it appeared to show manipulation.
“I have a hard time understanding how this happens without it being deliberate,” State Rep. Jasmine Clark, D-Lilburn, who has a doctorate in microbiology and molecular genetics from Emory University, told the AJC. “Literally nowhere ever in any type of statistics would that be acceptable.”
Fauci and other experts have urged states to tread carefully when reopening for business to ensure the infection rate does not spike and create a second wave that could be worse than the first, further damaging the economy.
Latest tallies
There have been 1,649 deaths from COVID-19 in Georgia, according to data aggregated by Johns Hopkins University, the 14th highest death toll among states. The state has more than 36,000 cases, according to a New York Times tracker.
The global case tally now stands at 4.8 million and 319,147 people have died, according to the Johns Hopkins data. At least 1.8 million people have recovered.
The U.S. has the highest case toll at 1.51 million and the highest death toll at 90,432.
Russia has 299,941 cases and 2,837 fatalities.
Brazil has moved past the U.K. by case numbers, with 257,396 cases and 16,941 fatalities. The U.K. has 247,709 cases and 34,876 deaths, the highest death toll in Europe and second highest in the world after the U.S.
See now:Powell, Mnuchin testify on coronavirus relief: live blog
Spain has 231,606 cases and 27,709 deaths, while Italy has 225,886 cases and 32,007 deaths.
France has 180,051 cases and 28,242 deaths, while Germany has 177,289 cases and 8,067 deaths.
Turkey has 150,593 cases and 4,171 deaths and Iran has 124,603 cases and 7,119 deaths. India is next with 102,287 cases and 3,164 fatalities, followed by Peru with 94,933 cases and 2,789 deaths. China, where the disease was first reported late last year, has 84,063 cases and 4,638 deaths.
What’s the economy saying?
The latest data showed that housing starts fell 30% to a seasonally adjusted annual rate of 891,000 in April from March as the pandemic halted construction.
It was the slowest pace of new-home construction since February 2015.
Permitting activity for newly-built homes fell 20.8% between March and April to a seasonally adjusted annual rate of 1.07 million.
Read now:Over 4 million Americans are now skipping their mortgage payments
Housing starts fell short of the consensus forecast of economists polled by MarketWatch – they estimated new-home construction to take place at a 900,000-unit annual rate. Building permits beat economists’ consensus forecast of 996,000.
The data from the Commerce Department comes a day after The National Association of Home Builders said its monthly confidence index rose seven points to a reading of 37 in May after the April number was the lowest since June 2012, suggesting confidence is picking up slightly.
What are companies saying?
The earnings season brought the first reports from some of the nation’s biggest retailers, led by Walmart Inc., which surprised investors with a blowout report. The company, one of few to thrive during the pandemic, beat expectations for profit and sales as consumers stockpiled food and home goods and e-commerce sales soared 74%.
Walmart WMT, +0.95% incurred nearly $900 million in COVID-19-related expenses including $755 million in bonuses for associates, the launch of Express Delivery, which gets purchases to customers’ homes in less than two hours, and the hiring of more than 235,000 new workers.
Home-improvement retailer Home Depot Inc. HD, -1.78% had a less promising quarter and withdrew its guidance. Home Depot missed profit expectations, but sales rose more than forecast thanks to strength at the start of the quarter. Home Depot announced a regular quarterly dividend of $1.50 a share, bucking the trend that has seen many companies suspend shareholder reward programs, including dividends and share buybacks.
Read: Jamie Dimon urges business and government to use the pandemic to create a fairer world
In the airline sector, Southwest Airlines Co. LUV, +4.61% said it has started to see an improvement in demand and load factor and expects the trend to continue into June. Operating revenue for April fell 90% to 95% and load factor was about 8% as a result of the COVID-19 pandemic, the air carrier said it has experienced “modest improvement” in passenger demand, bookings and trip cancellations in May, resulting in net positive bookings through May 18.
Elsewhere, companies continued to raise money through debt or equity offerings and to offer updates on reopening of outlets and plants.
Here are the latest things companies have said about COVID-19:
• Advance Auto Parts Inc.’s AAP, +6.64% first-quarter profit and sales missed expectations as the pandemic had a significant impact on results, but the auto parts maker provided an upbeat second-quarter outlook. For the first four weeks of the second quarter, same-store sales have “improved significantly” each week. The company has withdrawn its full-year financial guidance given the uncertainties associated with the pandemic.
• Michael Kors parent Capri Holdings Ltd. CPRI, -2.78% will delay the filing of its annual report, as a result of the pandemic, as it takes advantage of SEC rules that are allowing for filing delays of up to 45 days. Capri had about $900 million in liquidity as of May 15, which the company believes is “sufficient to meet future operating needs.”
• Darden Restaurants Inc.’s DRI, +1.76% same-restaurant sales fell 47.9% in the fourth quarter to date through May 17. The operator of the Olive Garden, LongHorn Steakhouse and Fine Dining chains, started to reopen dining rooms on April 27, limited to 25% and 50% capacity, based on local or state regulations. About 49% of its dining rooms were opened as of May 17 and the company expects to have more than 65% open with restrictions on capacity by the end of the month. Same-restaurant sales at Olive Garden were down 39.4% in the quarter to date through May 17. The company’s cash burn rate has improved to less than $10 million a week. It has fully repaid a $750 million credit facility and had about $700 million in cash on hand as of May 17.
• Shaving accessories maker Edgewell Personal Care Co. EPC, -1.60% is commencing a private offering of $600 million in unsecured, unsubordinated notes that mature in 2028. Proceeds will be used to redeem the existing 4.700% senior notes that mature in 2021.
• Home Depot Inc. HD, -1.78% reported fiscal first-quarter profit that missed expectations, although revenue and same-store sales rose more than forecast. Overall same-store sales grew 6.4% from a year ago, beating the FactSet consensus of 4.3% growth, while U.S. same-store sales rose 7.5% compared with expectations of a 4.0% rise. While sales were “strong” at the end of the first quarter and into the first two weeks of the second quarter, the company is suspending its previously provided financial guidance given the uncertainties regarding the effects of the pandemic. Separately, Home Depot announced a regular quarterly dividend of $1.50 a share, payable June 18 to shareholders of record on June 4.
• Kohl’s Corp. KSS, -7.91% posted weaker-than-expected first-quarter earnings as the coronavirus pandemic shuttered stores and kept customers away. “We entered the year in a strong financial position and our business was tracking to our expectations prior to the onset of the crisis,” Chief Executive Michelle Gass said in a statement. The company has taken a series of measures to combat the pandemic, including cutting costs, lowering capex spending by about $500 million and suspending share buybacks and its quarterly dividend. It ended the quarter with about $2 billion in cash. It replaced and upsized a revolving credit facility to $1.5 billion and issued $600 million of bonds that mature in 2025.
• MGM Resorts International MGM, +1.61% will start reopening its casinos in Mississippi, in a limited capacity, on May 25. The reopening will start with the casino operator’s Gold Strike Casino Resort in Tunica, followed by the reopening of Biloxi’s Beau Rivage Resort and Casino on June 1. The company said each casino will host an “invitation-only” weekend ahead of the public reopening.
• Paychex Inc. PAYX, +2.38% is seeing “early signs of moderation and stabilization” in its key business metrics despite the “severe” effects of COVID-19 on the U.S. economy. “We believe our strong balance sheet and operational flexibility will allow us to successfully manage through the current situation while protecting our cash flow and liquidity,” the company said. It expects that it will have enough cash to support normal business operations, share repurchases, and dividends “for the foreseeable future.” Paychex is working with governments to understand the requirements of new programs impacting its clients.
• Pier 1 Imports Inc. PIRRQ, -60.23% is seeking bankruptcy court approval to start an orderly wind-down of its business operations as soon as possible given current store closures. The company will sell its inventory and remaining assets, including IP and its e-commerce business. “This decision follows months of working to identify a buyer who would continue to operate our business going forward,” Chief Executive and Chief Financial Officer Robert Riesbeck said in a statement. “Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of COVID-19, hindering our ability to secure such a buyer and requiring us to wind down.” The company will start liquidation sales as soon as stores can reopen in compliance with guidelines from states and health officials. Its debtor-in-possession lenders have agreed to allow the retailer to overdraw its DIP loan by about $40 million to support its continued operations through the wind-down period.
• Sonic Automotive Inc. SAH, +0.20% has seen “increasing consumer activity” over the past few weeks in most of its markets, as the stay-at-home orders resulting from the pandemic have been gradually relaxed, leading to new and used vehicle volume performing better than expected week to week. So far in May, the auto retailer’s same-store new vehicle sales volume is down less than 20% from a year ago and used vehicle sales volume is down less than 15%. When the company reported first-quarter results on April 30, April new units were down 40%, with franchised used units down 33%. Meanwhile, gross profit per unit in May continues to be lower than a year ago, given price adjustments made to boost sales. Used vehicle inventory days’ supply has improved to 29 days at franchised stores from 37 days at the end of March.
• Southwest Airlines Co. LUV, +4.61% has seen improvement in demand and load factor in May, and expects further improvement in June. After operating revenue for April fell 90% to 95% and load factor was about 8% as a result of the pandemic, the air carrier has experienced “modest improvement” in passenger demand, bookings and trip cancellations in May, resulting in net positive bookings through May 18. The company expects May operating revenue to fall 85% to 90% and estimates load factor to be 25% to 30%, compared with previous expectations for a 90%-to-95% decline in operating revenue and load factor of 5% to 10%. For June, Southwest currently expects improvement in operating revenue to a decline of 80% to 85% and in load factor to 35% to 45%.
•Stanley Black & Decker Inc. SWK, +2.86% raised its second-quarter sales outlook, citing strength in its U.S. retail channel for tools and storage and in global security. The company expects an organic decline of 20% to 30%, compared with guidance provided on April 30 of 35% to 45%. The new guidance was provided by Chief Financial Officer Donald Allen at the J.P. Morgan Homebuilding and Building Products Conference.
• Tesla Inc. TSLA, +0.06% will raise the price of the “full self-driving” option on its electric vehicles worldwide by $1,000 starting July 1, Chief Executive Elon Musk tweeted. Currently, the feature costs $7,000. “The FSD price will continue to rise as the software gets closer to full self-driving capability with regulatory approval,” Musk said in a follow-up tweet. “[At] that point, the value of FSD is probably somewhere in excess of $100,000.” Despite its name, “full self-driving” is not a fully autonomous-driving feature, but rather works with Tesla’s Autopilot to provide enhanced driver assistance.
• United Airlines Holdings Inc. UAL, +1.36% has seen “moderate improvement” in demand and reduced cancellations during the second quarter, and expects further improvement in July. April gross bookings fell 95% from a year ago, with customer cancellations at “unprecedented” levels as a result of the pandemic. In May and June, scheduled capacity was down 90% from year ago levels, but UAL now expects July capacity to be down about 75%. Separately, the company said it expects 2020 adjusted capital expenditures (capex) to be below $4.5 billion, and 2021 capex to “close to” $2 billion. United does not expect to be required to take delivery of any new aircraft in 2022.
• Walmart Inc. reported first-quarter earnings and sales that beat expectations as consumers stockpiled during the pandemic. U.S. same-store sales rose 10% with food, wellness and consumables leading the way. Walmart e-commerce sales soared 74%. Walmart incurred nearly $900 million in COVID-19-related expenses including $755 million in bonuses for associates, the launch of Express Delivery, which gets purchases to customers’ homes in less than two hours, and hiring more than 235,000 new associates. Walmart is shutting down Jet.com “due to the continued strength of the Walmart.com brand.” The company has withdrawn fiscal 2021 guidance due to the uncertainty surrounding the pandemic.
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