The Latest on the coronavirus pandemic. The new coronavirus causes mild or moderate symptoms for most people. For some, especially older adults and people with existing health problems, it can cause more severe illness or death.TOP OF THE HOUR:— Students return to high schools in the Palestinian territories— Egypt orders its people to wear face masks in public— Merkel says she won't commit to attending G-7 in person— India has another record single day jump of nearly 8,000 coronavirus cases— 400 German managers, workers and family members have begun returning to China___GAZA CITY, Gaza Strip — Students are returning to high schools in the Palestinian territories for the first time in two months for final exams.The Education Ministry said Saturday that 78,400 12th-graders are taking the exams in the West Bank and Gaza Strip.Schools have been closed since March as part of Palestinian efforts to contain the coronavirus.In Gaza, police and paramedics took students’ temperatures as they entered, and the students sat spaced apart in classrooms.The Palestinian Authority, which governs parts of the Israeli-occupied West Bank, has reported more than 380 confirmed cases of the virus, including two deaths.Authorities have reported 61 cases and one death in Gaza, which has been under an Israeli and Egyptian blockade since the Islamic militant group Hamas seized power in 2007. All the cases in Gaza have been detected inside quarantine facilities housing returnees from abroad.___MOSCOW — Russia has recorded nearly 9,000 new cases of the coronavirus, roughly consistent with the increases reported over the past two weeks.The national coronavirus task force said Saturday that 4,555 Russians have died of COVID-19 and 396,575 infections have been confirmed overall.The relatively low mortality rate compared with other countries has prompted skepticism domestically and abroad. In a bid to dispel suspicions that authorities are trying to lower the death toll for political reasons, Deputy Prime Minister Tatyana Golikova explained Friday that Russia’s count contains only those confirmed to have died of the infection, but she also gave figures for people who tested positive for the virus but died of other causes.If all categories are counted as COVID-19 deaths, the nation’s total toll for April would stand at 2,713, or nearly 60% more than the previously announced number.___CAIRO — Egypt on Saturday ordered its people to wear face masks in public, when taking private transportation, and inside government offices as it eases the partial lockdown imposed during the weeklong Muslim holiday of Eid- el-Fitr.Prime Minister Mustafa Madbouly said violators will be fined. He said the nationwide curfew will be 8 p.m. to 6 a.m. for another two weeks.Egypt, the Arab World’s most populous country, has seen a jump of daily reported infections in the past week, with a total of 879 deaths among 22,082 confirmed cases. The country of 100 million people has the highest announced deaths from COVID-19 in the Arab World.___BERLIN — German Chancellor Angela Merkel will not personally attend a meeting in the U.S. with the leaders of the world’s major economies if President Donald Trump goes ahead with it, unless the course of the coronavirus spread changes by then, her office said Saturday.After cancelling the Group of Seven summit, originally scheduled for June 10-12 at Camp David, Trump said a week ago that he was again considering hosting an in-person meeting of world leaders because it would be a “great sign to all” of things returning to normal during the pandemic.Immediately after that announcement, Merkel suggested that she had not yet made up her mind on whether to attend in person or by video conference, but her office told the dpa news agency that she has now made a decision.“As of today, given the overall pandemic situation, she cannot commit to participating in person,” Merkel's office said.___ISLAMABAD — Even as Pakistan recorded its single highest overnight death toll of 78 and its numbers of COVID-19 confirmed cases soared passed 66,000, the country’s Civil Aviation Authority announced international flights can resume in and out of Pakistan.As of Saturday Pakistan had recorded 1,395 deaths from COVID-19 since mid March and daily counts of new cases showed a daily jump of nearly 2,500.Still Pakistan has eased most of its lock-down measures and earlier this month the Supreme Court even ordered shopping malls to open. Despite pleas from the country’s medical profession, and dire warnings of more deaths from the spread of the coronavirus,Prime Minister Imran Khan refused to close down mosques, bowing to Pakistan’s radical religious leaders, who threatened violent protests if mosques were closed. Pakistan has barely 3,000 intensive care beds throughout the country of 220 million people, who have paid little to no attention to government directions to social distance. Domestic flights resumed earlier this month.___NEW DELHI — India has registered another record single day jump of 7,964 coronavirus cases and 265 deaths, a day before the two-month-old lockdown across the country of 1.3 billion people is set to end.The Health Ministry on Saturday put the total number of cases in India at 173,763 with 4,971 deaths. The total infections included 86,422 active cases and 82,369 recoveries.More than 70% of coronavirus cases in India are concentrated in Maharashtra, Gujarat, Tamil Nadu, New Delhi, Madhya Pradesh and Rajasthan states.Meanwhile, Prime Minister Narendra Modi, in an open letter on one year of the government’s second term, asserted that India was traversing on the path to “victory” in its battle against the virus. He said India will set “an example in economic revival” and asked the countrymen to show a “firm resolve.”Modi also acknowledged the “tremendous suffering” of migrant workers and labourers who were the worse hit after India imposed a nationwide coronavirus lockdown in late March, forcing millions of them to flee cities after losing their jobs and make grueling and dangerous trips back to their hometowns.The federal government is expected to issue a new set of guidelines this weekend, possibly extending the lockdown in worst-hit areas.India started easing lockdown restrictions earlier this month, allowing reopening of shops and manufacturing and resumption of some trains and domestic flights and vehicles’ movement.Metro services, schools and colleges, hotels and restaurants are shuttered nationwide.India has surpassed China both in terms of confirmed cases and deaths from the disease.___BEIJING — Around 400 German managers, workers and family members have begun returning to China aboard charter flights as multinational companies in the world’s second-largest economy seek to get their operations running again at full speed.A pair of flights from Frankfurt to the Chinese business hubs of Tianjin and Shanghai were organized by the German Chamber of Commerce in China in co-operation with Germany’s diplomatic missions and airline Lufthansa and are the first repatriation flights from Europe to China for foreign nationals. China has largely banned all foreigners from entering China because of the coronavirus outbreak.“This is an important step to reconnect China’s and Germany’s economies,” Jens Hildebrandt, executive director of the German Chamber of Commerce in North China, was quoted as saying in a news release. “It is our common interest to contribute in helping the economy return to normalcy and pre-virus levels.” More than 5,200 German companies operate in China, employing more than 1 million people. “We know there is a huge demand in the German business community to get more foreign employees back to China,” Hildebrandt was quoted as saying.The first flight with 200 passengers was due to arrive shortly before noon on Saturday in Tianjin, a port city just east of the capital Beijing. Another flight to Shanghai. The second flight was expected to arrive in Shanghai around midday on Thursday, June 4.___SEOUL, South Korea -- South Korea reported 39 new cases of the coronavirus, most of them in the densely populated Seoul metropolitan area, where officials have found more than a hundred infections linked to warehouse workers.Figures from South Korea’s Centers for Disease Control and Prevention on Saturday brought national totals to 11,441 cases and 269 deaths. At least 12 of the new cases were linked to international arrivals.KCDC director Jeong Eun-kyeong said during a virus briefing Friday afternoon that at least 102 infections have been linked to workers at a massive warehouse operated by Coupang, a local e-commerce giant that has seen orders spike during the epidemic.The company has been criticized for failing to implement proper preventive measures and enforce distance between employees, with virus discovered on the safety helmets, laptops, keyboards and other equipment they share.Health workers have also found at least 266 infections linked to nightclubs and other entertainment venues in the Seoul metropolitan area, which saw huge crowds in early May as officials eased social distancing guidelines.The resurgence in infections have alarmed officials as millions of children have been returning to schools nationwide.While shutting nightspots and public spaces to slow the spread of the virus, government officials have so far maintained the phased reopening of schools, expressing hope that the recent transmissions could be contained quickly.___Follow AP news coverage of the coronavirus pandemic at https://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreakThe Associated Press
(Bloomberg) -- Brazil overtook Spain to rank fifth in the world in coronavirus deaths, with no sign of easing in Latin America’s biggest economy. The U.S. will quit the World Health Organization after President Donald Trump faulted its actions with China and the virus.A front-running vaccine candidate being developed in China is expected to be available as soon as the end of this year, according to a report published in China. Moderna began a mid-stage trial of a vaccine that showed promising safety and early efficacy data this month. Singapore and China agreed to allow essential travel between the two countries starting in early June.Key Developments:Virus Tracker: Cases top 5.9 million; deaths over 365,000Brits emerge from lockdown to find affordable dining threatenedRace to the freezer: Europe’s flood glut has nowhere to goHow China tested 11 million people in just two weeksEvery worker has Covid at one U.S. farm on eve of harvestEuropeans not feeling very hopeful about their economy just yetSubscribe 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. For a look back at this week’s top stories from QuickTake, click here.S&P Sees Abu Dhabi, Bahrain Economies Shrinking (5:20 p.m. HK)Abu Dhabi’s economy will contract 7.5% this year, S&P Global Ratings said, citing lower oil production and the pandemic.Bahrain’s economy will shrink 5% this year because of low oil prices, although government stimulus measures should provide some support, S&P said. The ratings company expects Bahrain’s economy to rebound in 2021 as oil prices recover and regional activity increases.Merkel Says Stimulus Plan to Promote Innovation (5:19 p.m. HK)German Chancellor Angela Merkel said an economic stimulus program her ruling coalition is seeking to agree on in coming days should be focused on innovation and sustainable industries.“We will decide on a growth program in the coming week that should help the economy to get back on track and grow,” Merkel said Saturday in her weekly podcast. “The trick will be to do it in such as way as to give a boost both to innovation and sustainable industries, so that we also become strong in the sectors of the future.”Indonesia Gears Up for Post-Holiday Return (5:02 p.m. HK)Indonesia’s capital Jakarta is anticipating one million vehicles will enter the city as people return from Eid al-Fitr holidays. Traffic, including motorcycles, is projected to peak from Saturday to Monday, according to a Cabinet Secretariat statement. While the figure is lower compared to the 2.8 million vehicles recorded last year, the flow of so many travelers is raising concern as the nation’s coronavirus cases grow.Indonesia now has the highest coronavirus death toll in Southeast Asia, with 1,573 people succumbing to the disease as of Saturday. New cases have more than doubled in May, with the total reaching 25,773.Uzbekistan Extends Lockdown Restrictions (3:36 p.m. HK)The Uzbek government has decided to extend lockdown restrictions until June 15. Central Asia’s most populous nation has confirmed 3,513 cases of infection of the coronavirus, with 14 deaths and 2,728 recoveries.Singapore Reports 506 New Cases (3:30 p.m. HK)Singapore reported 506 new infections as of Saturday, according to a statement from its Health Ministry. A vast majority of the additional infections are of work permit-holders who live in foreign workers’ dormitories, according to the statement. The ministry is expected to provide additional details in the evening, it added.Chinese Vaccine Expected to Begin Mass Output This Year (3:25 p.m. HK)A front-running Covid-19 vaccine being developed in China is expected to be available as soon as the end of this year, according to a report published in the official Wechat account of the State-owned Assets Supervision and Administration Commission.The vaccine, jointly developed by the Beijing Institute of Biological Products and China National Biotec Group Co., has completed phase II testing and may be ready for the market at the end of this year or early next year, said the report.The production line for the vaccine will be fully disinfected and closed in preparation for output to start Saturday, and will have a manufacturing capacity of 100 million-120 million vaccines each year.Iran Lifts Restriction on Shopping Hours (2:26 p.m. HK)Iran has lifted a restriction on the operating hours of shopping malls in the latest step of reopening the economy. Meanwhile, all mosques in the country will be open to worshipers for daily prayers three times a day, President Hassan Rouhani said in a national coronavirus taskforce briefing broadcast on state TV.South Korea Has Outbreak at Distribution Center (1:46 p.m. HK)South Korea reported 39 new coronavirus cases in 24 hours as health officials seek to control a new outbreak at a distribution center for Softbank-backed Coupang Corp., an e-commerce company.A total of 108 infections are related to the center, the vice head of the Korea CDC said in a briefing. That tally includes 73 employees and 35 people who might have come into contact with the employees. A separate outbreak related to nightclubs in Itaewon, Seoul have increased to 269 infections as of Saturday, Kwon said.Most Australians Support State Border Closures (1:40 p.m. HK)The majority of Australians approve of states’ decisions to shut their borders amid the coronavirus crisis, according to a new poll.More than three in four Australians surveyed this week said they back the closures, including 40% who “strongly” support them, according to a release by The Australia Institute, a public policy group that commissioned the poll. One in five opposed the states’ measures.“The strong support for state border closures shows that while there is much public relief with some public health restrictions lifting, there is also still much community concern regarding the spread of Covid-19,” Ben Oquist, the institute’s executive director, said in the release.U.S. Supreme Court Rejects California Church (12:36 p.m. HK)A divided U.S. Supreme Court refused to exempt a San Diego church from crowd limits imposed by California to stop the spread of the coronavirus.Chief Justice John Roberts joined the court’s liberals in the 5-4 majority, writing that judges should be reluctant to second-guess state officials on questions of health and safety during a pandemic. The order came hours after the court refused to intervene on behalf of two Chicago-area churches that said Illinois coronavirus restrictions were so strict they violated the Constitution.Australia to Urge Eliminating Payroll Tax (11:20 a.m. HK)Australia’s government will call on states to eliminate payroll taxes as part of the nation’s efforts to jump-start the economy and create jobs, Treasurer Josh Frydenberg said in an interview with the Daily Telegraph.“I’d love the states to get rid of the payroll tax,” he said.The government’s coronavirus recovery plans will involve changes to taxes on income, and for small and medium businesses, Frydenberg said in the interview. The proposals should be finalized ahead of the government’s annual budget release in October, he said, according to the report.Sotheby’s Realty Gets Trump Backing to Fight Michigan Lockdown (10:40 a.m. HK)A group of small business owners in Michigan fighting stay-at-home orders by the state’s governor, saying they threaten their livelihoods, got a boost from the Trump administration.“As the president and many states have recognized, the onerous restrictions on civil liberty that Americans have tolerated to slow the spread of Covid-19 cannot continue forever, and the Constitution will not allow them to do so,” the Justice Department said in a court filing in support of a lawsuit challenging executive orders by Governor Gretchen Whitmer.The lawsuit the Trump administration is backing was filed in late April by a franchise of Sotheby’s International Realty, along with a lawn and property maintenance company, an automotive glass exporter, an engine oil and auto parts distributor, a jewelry store, a dental office and an association of car washes.Singapore, China to Allow Essential Travel Starting (9:42 a.m. HK)Singapore and China have agreed to allow essential travel for business and official purposes between the two countries in early June, according to a joint emailed statement.The Fast Lane arrangement will be first applied between Singapore and six Chinese provinces or municipalities directly under the central government, and will gradually expand to include additional areas. Covid-19 prevention and control measures will remain in place.The agreement comes as countries cautiously seek to begin so-called “travel bubbles” after the pandemic shut down borders. China, where the coronavirus first emerged, appears to have brought its cases under control, while Singapore is moving toward opening its economy after wrestling to contain an outbreak among thousands of foreign workers.China Cargo Ship Source of Two New Reported Infections (9:35 a.m. HK)Two crew members of a Chinese-registered cargo ship, Zhong Chang Rong Sheng, tested positive for Covid-19 in China’s Shandong Province after they arrived from India via Singapore, state television CCTV reported on its official Weibo account.The two Chinese nationals, and another crew member who hasn’t tested positive, have been hospitalized, while the remaining 19 people on board are still under quarantine on the vessel. It docked at Lanshan Port of Rizhao in Shandong province on May 27. The two infections are among four new coronavirus cases, all imported, reported by China.Chile Gets Flexible Credit Line From IMF (8:35 a.m. HK)The International Monetary Fund approved a $23.9 billion credit line for Chile as one of South America’s wealthiest nations grapples with a recession amid the virus that the central bank forecasts may be the worst since the 1980s.The two-year flexible credit line is a precautionary measure that should boost market confidence and provide insurance against downside risks, the fund said in an emailed statement late Friday. Managing Director Kristalina Georgievasaid that although the nation has a good track record, its trade openness exposes it to external risks.United Airlines Will Add Back International Flights in July (8:30 a.m. HK)United Airlines Holdings Inc. will add back some international flying in July, saying demand has “risen modestly” in some markets after the Covid-19 pandemic all but wiped out travel.Flights will resume or increase on 40 international routes in July, United said in a statement Friday. The Chicago-based airline will serve only 27 foreign routes in June. United has said its overall schedule will be down about 75% from a year earlier in July, compared with a 90% reduction currently.The plan to increase flying reflects a modest rebound in demand for all U.S. airlines as travel restrictions ease and economic activity picks up.Germany, EC Settle Lufthansa Aid (7:15 a.m. HK)Germany settled a dispute with the European Commission over a 9 billion-euro ($9.9 billion) bailout of Deutsche Lufthansa AG, clearing the way for the carrier to accept a rescue package to help it weather a collapse in travel demand triggered by the pandemic.The deal requires Lufthansa to reduce the number of aircraft kept at Frankfurt and Munich airports. Lufthansa said it would surrender up to 24 takeoff and landing slots, making room for new competitors at each hub.Germany on Monday offered Lufthansa a package of loans and equity investment to keep the carrier flying through the coronavirus. But after the EU demanded the carrier give up slots in Munich and Frankfurt, the airline’s supervisory board unexpectedly held off on accepting this lifeline -- throwing the rescue plan into turmoil after weeks of talks.Brazil Deaths Go Past Spain (6:30 a.m. HK)Brazil eclipsed Spain and now ranks fifth worldwide in coronavirus deaths with no sign the pandemic is slowing in Latin America’s largest economy. The country reported 1,124 new deaths Friday, pushing the total to 27,878, past Spain with 27,121. Brazil registered 465,166 cases, trailing only the U.S.Infections are reported in 70% of Brazilian cities, the Health Ministry said on Friday. Earlier this week, the ministry said the curve of cases was still growing, and a report by UBS published Wednesday said that six of Brazil’s 27 states are peaking, while total deaths are increasing in 21 states.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
BERLIN — German flagship airline Lufthansa agreed Saturday to a compromise worked out between the government and the European Union, overcoming a major hurdle toward final approval of a 9 billion-euro ($10 billion) bailout from Berlin.Lufthansa said in a statement it had agreed to the compromise worked out between Germany and the EU in which the airline will have to give up several prized landing slots at Munich and Frankfurt airports. The dpa news agency reported the German government had also agreed to the compromise.The government announced the aid package on Monday to help Lufthansa, which, like most airlines, has been struggling during the coronavirus pandemic.The EU imposed conditions, however, saying that bailouts must include measures that would maintain a level playing field for other companies.Specifics on the EU’s demands weren’t announced, but Lufthansa said the scope of commitments it agreed to had been reduced compared to initial plans, dpa reported.Under the agreement, the airline must remove up to four aircraft from the two airports, equivalent to three daily take-off and three landing rights per aircraft, to allow competitors to take the slots, the airline said.The slots will be re-allocated through a bid process. Discount airlines Ryanair and easyJet are both thought to be interested.Lufthansa’s supervisory board now needs to approve the full rescue package, including the conditions, and the German government needs to finalize its plans with the European Commission.The Associated Press
"We are excited to tell you more about Android 11, but now is not the time to celebrate," Google said in a message posted on its Android developers website. In a tweet, it said that it will announce more details on the new version of Android "soon," without specifying any dates. Protests have spread across the United States over the killing of George Floyd, a Minneapolis black man who died after being pinned by the neck under a white police officer's knee.
(Bloomberg) -- The German government settled a dispute with the European Commission over a 9 billion-euro ($9.9 billion) bailout of Deutsche Lufthansa AG, clearing the way for the carrier to accept the rescue package.After intensive talks, the commission and the German government agreed that Lufthansa will reduce the number of aircraft it keeps at Frankfurt and Munich airports. Lufthansa in a statement said it would surrender up to 24 takeoff and landing slots, making room for new competitors at each hub.The compromise wraps up a nail-biter of a week with Lufthansa’s future in the balance. Germany on Monday offered Lufthansa a package of loans and equity investment to keep the carrier aloft through the coronavirus storm. But after the EU demanded it give up slots in Munich and Frankfurt, the airline’s supervisory board unexpectedly held off on accepting this lifeline -- throwing the rescue plan into turmoil after weeks of talks. Lufthansa said early Saturday that the deal, which still requires approval of its supervisory board, reflects a reduction in the initial demands from the EU. The airline will have to cut back four aircraft each at Frankfurt and Munich, surrendering 24 daily slots -- equivalent to three takeoff-and-landing pairs for each plane, the statement said.For an initial 18-month period, the slots can only be allocated to one new competitor each at Frankfurt and Munich. After that, they can be made available to rivals already present at the airports. The capacity will be allocated in a bidding process, Lufthansa said, and only be available to European carriers that haven’t received substantial state recapitalization due to the coronavirus pandemic.The commitments will “enable a viable entry or expansion of activities by other airlines at these airports to the benefit of consumers and effective competition,” the European Commission said in an emailed statement.Regulators will assess the German aid package “as a matter of priority” before it can grant final approval, the EU said. The authority polices state aid rules to ensure one EU country doesn’t give its companies an unfair advantage over others in the bloc.Of the two main European discount carriers, Lufthansa rival Ryanair Holdings Plc already has slots at Frankfurt airport. That suggests that based on the statement, it wouldn’t be able to bid for more during the initial period. Easyjet Plc already has slots at Munich airport.A spokeswoman for Germany’s economy ministry said an important milestone had been reached, adding talks with the EU over other aspects of the deal would continue.The labor-heavy supervisory board saw a threat that jobs would be lost and the market would shift toward the discount airlines, which pay their personnel less.The supervisory board’s rejection of the initial rescue proposal had triggered an open dispute between the German government and the EU commission, revealing the political tensions underpinning the effort to stabilize Europe’s largest airline in the midst of a historic collapse in travel.Still, all sides were seeking a breakthrough. Even before the compromise, the board had called the bailout “the only viable alternative for maintaining solvency.”Read More: Vestager Defends Tough Stance on Lufthansa Amid Jobs Warning (1)The supervisory board wasn’t planning to meet this weekend, but could be called to do so at short notice, people familiar with the matter have said. It may meet on Monday, German newspaper Handelsblatt reported.Shareholder VoteLufthansa’s shareholders would also be called to vote on aspects of it at an extraordinary general meeting, most likely toward the end of June, meaning it could be weeks before Lufthansa receives government cash.Like airlines across the world, Lufthansa is fighting for survival as the coronavirus crisis punctures a decades-long aviation boom. The company, which connects Germany’s industrial titans to far-flung export markets, plans to operate fewer aircraft when flights resume and is closing discount arm Germanwings to prepare for what could be years of depressed demand.Lufthansa is also poised to receive some 2 billion euros in aid from Austria, Belgium and Switzerland, where the airline owns units.The German package represents the biggest corporate rescue in the country during the pandemic crisis. It’s also the only one that involves a direct investment by German Chancellor Angela Merkel’s government, but more may be coming. The government set up a 100 billion-euro fund to buy stakes in stricken companies as part of its effort to stabilize Europe’s largest economy.(Updates with EU comment in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- President Donald Trump’s long-touted response to China for its crackdown on Hong Kong included a barrage of criticism but stopped short of fully escalating tensions between the two nations.While the U.S. president’s speech Friday was heated in rhetoric, it lacked specifics around measures that would directly impact Beijing. He announced the U.S. would begin the process of stripping some of Hong Kong’s privileged trade status without detailing how quickly any changes would take effect and how many exemptions would apply.The president also promised sanctions against Chinese and Hong Kong officials “directly or indirectly involved” in eroding Hong Kong’s autonomy but didn’t identify individuals. The administration hasn’t yet decided under what authority it would implement that action, according to a person familiar with a matter, who declined to be named because the deliberations are private.“Our actions will be strong. Our actions will be meaningful,” Trump said in the White House Rose Garden.U.S. stocks erased losses and traded little changed as Trump stopped short of implementing more draconian measures against China, with the S&P 500 Index rising 0.5% at the close in New York.The president said that the U.S. will terminate its relationship with the World Health Organization, which Trump has accused of being too deferential to China and of failing to provide accurate information about the spread of the coronavirus. He also said he would limit visas for certain Chinese students.Both those moves are tangential to China’s escalations in Hong Kong and don’t strike at Beijing to the degree that some in markets had feared earlier in the week. For instance, there was no unraveling of the phase-one trade deal signed between the world’s two biggest economies in January.Trump repeated a list of his grievances with China and punted tougher policy measures that his administration had discussed, including financial sanctions.His remarks also didn’t include mention of legislation passed by Congress this week that could sanction Chinese government officials over the treatment of Uighurs, who have been forcibly detained in internment camps in China’s Xinjiang region.“This binds the president to nothing with regards to China,” Derek Scissors, a China analyst at the conservative American Enterprise Institute. “With regards to a Hong Kong policy, it is a non-event. Nothing happened.”Hawks PushingThe Trump administration and China for weeks have been trading barbs over who’s to blame for the impact of the coronavirus pandemic in the U.S. and Republican lawmakers have been pushing Trump to hold the country accountable. More hawkish advisers wanted the president to take decisive action against Chinese Communist Party officials for alleged human rights violations in the city.Trump’s announcement came after China’s legislature this week approved a plan to draft legislation that Hong Kong democracy advocates say will curtail freedom of speech and undermine the island’s independent judiciary, and after Secretary of State Michael Pompeo decertified the former British colony’s autonomy under U.S. law.That certification determination, however, doesn’t mean the U.S. has to treat Hong Kong exactly like mainland China for purposes of tariffs, sales of sensitive technologies or visas. Instead, the administration has a wide spectrum of options for actions to take -- but most of them do little harm to Beijing and instead hurt not only Hong Kong but also the U.S.Hong Kong’s Secretary for Justice Teresa Cheng said it’s within the rights of the central government to pass national security laws since the city is part China, even though it operates under a separate administrative system.“In so far as the national security is concerned, as in any other country in the world, this is a matter that belongs to the central authorities, whether it is a unitary or federal state,” according to a government transcipt of her comments to the media. “Any other state that tries to use coercion or whatever means with a view to interfering with the sovereign right of a state to pass its own national security law is arguably infringing on the principle of non-intervention under public international law, and that is not acceptable.”Relationship BottomTrump’s remarks omitted key details about what actions he’s taking, but his tone marked an escalation of hostile relations with China, said Jude Blanchette, China expert at the Center for Strategic and International Studies. “This further entrenches the view in Beijing that we haven’t found rock bottom yet in the relationship,” he said.The president said Beijing “unlawfully claimed territory in the Pacific Ocean” and “broke its word with the world on ensuring the autonomy of Hong Kong.”“The Chinese government has continuously violated its promises to us,” Trump said. “These plain facts cannot be overlooked or swept aside. The world is now suffering as a result of the malfeasance of the Chinese government,” he added, referring to the pandemic.Chinese officials earlier Friday called potential U.S. actions over Hong Kong “purely nonsense,” saying the matter was an internal affair and that essential freedoms in the city would remain intact.Beijing urged the U.S. to stop its “frivolous political manipulation,” Chinese foreign ministry spokesman Zhao Lijian told reporters at a daily briefing, reiterating Beijing’s support for Hong Kong police in upholding the law. Chinese officials have indicated they may retaliate against U.S. firms over the president’s decisions.Trump ramped up expectations for his announcement on China actions for several days this week. Even without many immediate actions outlined, the president used Friday’s announcement to laud his administration’s tough stance on Beijing with less than six months left before the presidential election.“This was an election speech,” Blanchette said. “This will be the tone and tempo until November.”(Adds Hong Kong official’s comment from 14th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Now that the European Central Bank is the main reason most investors give for holding some of the euro area’s bonds, there’s a lot riding on Thursday’s decision.Anything less than a 500-billion-euro ($556 billion) boost the pandemic emergency bond buying fund will probably disappoint markets. If the ECB obliges, or surprises with a bigger increase, then Italian bonds, which are poised for the best May since 2003 because of the central bank’s backstop, may rally.Some analysts also expect the ECB to tweak its tiering system, which was first introduced in September to help lenders cope with the pain of negative interest rates. The system exempts as much as six times the minimum amount of reserves a bank is required to hold from paying the deposit rate of minus 0.5%.“The time is right for the ECB to adjust its tiering system,” Frederik Ducrozet, strategist at Banque Pictet & CIE wrote in a client note, adding that raising the multiple to eight times “could engineer a net transfer of several billion euros to the banking sector.”If it comes to pass, German banks will be the biggest beneficiaries, because they have the euro zone’s largest reserves, and banking stocks in the bloc will likely rise.The ECB will set policy on Thursday, followed by a press conference with President Christine Lagarde.Debt SalesEuro-area bond sales are set to dip next week with offerings from Germany, France, Spain and Austria totaling around 21 billion euros, compared with 31 billion euros in the five days through May 29, according to Commerzbank AG. French offerings, which include a new 10-year note, are set to comprise half of that.The bank says the “door is open” for syndicated sales, but expects such a German 30-year offering to take place the following week given calendar considerations and the ECB rate decision.There are no redemptions to be paid but Italy pays coupons totaling around 1.4 billion euros next weekThe U.K. will offer around 11 billion pounds ($13.6 billion) of debt across four sales next week and the BOE will maintain its bond-buying program across nine operations at a pace of 1.5 billion pounds per maturity bucketData for the coming week in the euro area, Germany and U.K. is mostly relegated to second-tier, backward-looking figures.April producer prices alongside the unemployment rates for the euro area are due on Wednesday, while April retail sales Thursday may be overshadowed by the central bank rate decisionDBRS Ltd. reviews Germany’s sovereign rating on FridayFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Argentina and its key bondholders are getting closer to a $65 billion debt restructuring deal after the country defaulted on its overseas debt for the ninth time in its history.While still at odds over several key issues, the latest changes in the proposals by the government and two groups of creditors published Thursday signal the difference between both sides is narrowing. Argentina is now weighing extending the deadline for its offer beyond June 2, giving the parties more time to reach a deal, according to people with direct knowledge of the matter.President Alberto Fernandez’s government continues to work on amendments to its revised proposal, said the people, who could not be named because the talks are private. The negotiations may be extended by at least another 10 days, one of them said.The country’s debt negotiations started more than two months ago, as the country said it can’t meet its obligations amid high unemployment, a sharp drop in the value of its currency and a three-year contraction made worse by the coronavirus pandemic. The government has said it needs $40 billion in debt relief to set the nation back on the path to sustainable growth.LATAM INSIGHT: Estimating the Virus Drag Through Activity DataNew ProposalsIn its revised offer Thursday, Argentina proposed a payment moratorium for just two years, instead of three years included in its original offer, among other changes. Nevertheless, the offer won’t be binding until it’s sent for registration under the U.S. Securities and Exchange Commission.Meanwhile, two of the nation’s largest bondholder groups, which include funds such as BlackRock Inc., Ashmore Group Plc and Monarch Alternative Capital LP, also said they submitted a joint proposal Thursday that would provide the country with front-loaded cash flow relief of $36 billion over nine years. The offer would also reduce coupons by an average of 32%, and extend maturities with no amortization payments before 2025.Yet the government called the bondholders’ proposal “insufficient,” indicating that the distance between both sides continues to be relevant and that negotiations may still fail.“The group of Ad Hoc creditors moved in the right direction with respect to its previous offer, but the move was short and insufficient for the needs of the country,” Economy Minister Martin Guzman said in a statement late Thursday. “We hope to continue working with the creditors that make up this group, which today are the ones that are furthest from the restrictions that our country faces.”Argentina’s revised proposal includes a nominal haircut of 7% to the principal on global dollar bonds maturing in 2030 and a 5% reduction for global bonds maturing in 2035 and 2046. No principal would be returned to investors until 2025. There’s no haircut listed for dollar-denominated exchange notes issued after a previous default. The new bonds to come out of the exchange would have coupons that gradually increase as the maturity date approaches.Argentina also said it’s open to discussing sweeteners. An earlier proposal by the a committee of creditors known as the Exchange Bondholder Group suggested instruments tied to the nation’s gross domestic product.Read More: Argentina Bonds Climb as Investors See Headway in New OfferTime’s UpThe negotiations are now entering a crucial stage, with Argentina having already extended its official offer once through June 2. The South American nation has been in default since May 22 after failing to pay its debt obligations and faces in June almost $600 million in new payments on foreign-law bonds, according to data compiled by Buenos Aires-based consulting firm 1816 Economia y Estrategia.Argentina bonds rose this week to the highest since early March, signaling investors see the talks going in the right direction. The country’s notes have been trading flat since its default, following a recommendation by the Emerging Markets Traders Association.“We are confident our new joint proposal provides the basis for a collaborative solution that will both serve the interest of the Argentine people and help to restore the trust of the international financial community,” according to a statement sent Friday by the Ad Hoc Bondholder Group, one of the two groups that submitted the offer.That group, represented by White & Case LLP, features funds including BlackRock Inc., Ashmore Group Plc and Fidelity Investments. The Exchange Bondholder Group includes Monarch Alternative Capital LP, HBK Capital Management and VR Capital Group Ltd.A third group of investors, called the Argentina Creditor Committee, has not submitted a public proposal since May 15.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The scramble to jump on one of the hottest gold trades in years -- by shipping bullion to New York -- has sparked what may be one of the largest ever physical transfers of the metal.“The flows into New York are unprecedented,” said Allan Finn, global commodities director at logistics and security provider Malca-Amit. His company’s teams in New York have been working 24 hours a day to cope with demand while navigating lockdowns, flight disruptions and social distancing.Gold flooded into the U.S. in recent months as traders rushed to profit from an arbitrage caused by dislocations in the market triggered by the pandemic. Since late March, some 550 tons of gold -- worth $30 billion at today’s price and roughly equal to global mine output in the period -- have been added to Comex warehouse stockpiles. Hundreds of tons of that was imported.While tens of billions of dollars of gold change hands every day in financial markets, a much smaller amount tends to physically move between vaults in trading hubs like London, Zurich and New York.But that started to change as the Covid-19 crisis affected the supply chain. When planes were grounded and Swiss refineries closed in late March, traders were worried they wouldn’t be able to get gold to New York in time to deliver against futures contracts. That caused futures, which typically trade in lockstep with the London spot price, to soar to a premium of as much as $70 an ounce.That created an opportunity for enterprising traders: buy gold somewhere in the world at the spot price, sell futures, and benefit from the difference by shipping the metal to New York.The scale of the trade has been revealed in exchange reports, import and export data and comments from some of the leading precious metals shipping and vaulting companies. On Thursday, traders declared their intent to deliver 2.8 million ounces of gold against the June Comex contract, the largest daily delivery notice in bourse data going back to 1994.Swiss gold exports to the U.S. have surged, reaching 111.7 tons in April, the highest on record. American import data for April isn’t yet available, but already in March gold imports topped $3 billion, according to the Census Bureau, the highest in at least a decade. Refineries as far away as Australia have ramped up output of kilobars -- the form typically delivered on the Comex -- to ship to New York.For Brink’s Ltd. Managing Director Mark Woolley, the spike in demand to ship gold to New York has been unlike anything he’s seen in 20 years in the market.“The amount of metal that we’ve successfully moved into New York is pretty significant,” he said Thursday on a webinar hosted by the London Bullion Market Association. “It’s probably not far off the total amount of metal that’s been mined in this period.”CME Group Inc., which owns Comex, responded to the recent market dislocation by introducing a new contract allowing the delivery of 400-ounce bars, the type traded in London. Still, “other changes need to be at least considered,” according to LBMA Chairman Paul Fisher.The enormous movement of gold has been a boon for logistics companies, but also a challenge. Not only have passenger flights -- on which shipments are typically transported -- been grounded, but New York City, where many Comex warehouses are located, has also been a hotspot for the virus.To deal with flows, Loomis International U.K. opened up additional vault capacity. Malca-Amit considered using airports in Boston and Philadelphia, but hasn’t needed to yet, Finn said.While large volumes and virus-related restrictions at vaults and airports caused some delivery delays, much of the spike in the premium for futures contracts in March -- which left some banks nursing sizable losses -- was driven by perception rather than reality, Finn said.“My own personal opinion is that any assessment on the inability to get gold in was ill-informed at the time and was made on assumptions rather than fact,” he said.Still, the bonanza for precious metals shippers may last a while. Large deliveries have seen June Comex futures drop to a discount to spot prices this week, but later dated futures are still at a premium. And as investor interest in other precious metals picked up, futures for silver and platinum have also traded at premiums to spot.“The guys in New York have done a great job,” said Brian Hayward, head of Loomis International U.K. “We’re seeing a lot of silver head that way right now.”(An earlier version corrected the Y axis in the first chart)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- One farm in Tennessee distributed Covid-19 tests to all of its workers after an employee came down with the virus. It turned out that every single one of its roughly 200 employees had been infected.In New Jersey, more than 50 workers had the virus at a farm in Gloucester County, adding to nearly 60 who fell ill in neighboring Salem County. Washington state’s Yakima County, an agricultural area that produces apples, cherries, pears and most of the nation’s hops, has the highest per capita infection rate of any county on the West Coast.The outbreaks underscore the latest pandemic threat to food supply: Farm workers are getting sick and spreading the illness just as the U.S. heads into the peak of the summer produce season. In all likelihood, the cases will keep climbing as more than half a million seasonal employees crowd onto buses to move among farms across the country and get housed together in cramped bunkhouse-style dormitories.The early outbreaks are already starting to draw comparisons to the infections that plunged the U.S. meat industry into crisis over the past few months. Analysts and experts are warning that thousands of farm workers are vulnerable to contracting the disease.Aside from the most immediate concern -- the grave danger that farmhands face -- the outbreaks could also create labor shortages at the worst possible time. Produce crops such as berries have a short life span, with only a couple of weeks during which they can be harvested. If a farm doesn’t have enough workers to collect crops in that window, they’re done for the season and the fruit will rot. A spike in virus cases among workers may mean shortages of some fruits and vegetables at the grocery store, along with higher prices.“We’re watching very, very nervously -- the agricultural harvest season is only starting now,” said Michael Dale, executive director of the Northwest Workers’ Justice Project in Portland, Oregon, and a lawyer who has represented farm workers for 40 years. “I don’t think we’re ready. I don’t think we’re prepared.”Unlike grain crops that rely on machinery, America’s fruits and vegetables are mostly picked and packed by hand, in long shifts out in the open -- a typically undesirable job in major economies. So the position typically goes to immigrants, who make up about three quarters of U.S. farm workers.A workforce of seasonal migrants travels across the nation, following harvest patterns. Most come from Mexico and Latin America through key entry points like southern California, and go further by bus, often for hours, sometimes for days.There are as many as 2.7 million hired farm workers in the U.S., including migrant, seasonal, year-round and guest-program workers, according to the Migrant Clinicians Network. While many migrants have their permanent residence in the U.S., moving from location to location during the warmer months, others enter through the federal H2A visa program. Still, roughly half of hired crop farmworkers lack legal immigration status, according to the U.S. Department of Agriculture.These are some of the most vulnerable populations in the U.S., subjected to tough working conditions for little pay and meager benefits. Most don’t have access to adequate health care. Many don’t speak English.Without them, it would be nearly impossible to keep America’s produce aisles filled. And yet, there’s no one collecting national numbers on how many are falling sick.“There is woefully inadequate surveillance of what’s happening with Covid-19 and farm workers,” said Erik Nicholson, a national vice president for the United Farm Workers. “There is no central reporting, which is crazy because these are essential businesses.”At Henderson Farms in Evensville, Tennessee, where all the workers caught the virus, the employees are now all in isolation at the farm, where they live and work.“We take our responsibility to protect the essential workers feeding the nation through the pandemic seriously,” Henderson Farms Co. said in a statement. “In addition to continuing our policy of providing free healthcare, we have implemented additional measures to support workers directly impacted by Covid-19, including those in isolation as per the latest public health guidelines. We are working closely with public health officials in Rhea County, Tennessee, to ensure we can continue to deliver our high standard of care as we support our workers and our community through these unprecedented times.”One migrant worker from Mexico said seven employees at the Georgia produce farm where he works had fallen ill with the virus. The sick were asked to quarantine in a dormitory unpaid, but others who share the sleeping quarters, full of bunk beds about 3 feet (1 meter) apart, were still going into the fields, he said. He said he was afraid of getting infected, which would mean he wouldn’t be able to send money back to his family.Critical MonthsMay and June mark the start of a critical few months when migrant workers head to fields in North America and Europe to plant and gather crops. Travel restrictions amid the pandemic are already creating a labor squeeze. In Russia, the government is calling on convicts and students to fill in the labor gap on berry and vegetable farms. In the U.K., Prince Charles took to Twitter to encourage residents to PickForBritain. Farmers in western Europe usually rely on seasonal workers from eastern Europe or northern Africa.In Canada, migrant workers often come from Jamaica, Guatemala and Mexico. They’re typically housed on farms, with two or four people sharing a room, depending on if there are bunk-beds, said Colin Chapdelaine, president of BC Hot House, a greenhouse farming company that grow tomatoes, peppers and cucumbers in Surrey, British Columbia.All the houses are audited and approved by regulators with guidelines for how much kitchen and bathroom space to provide, but “Covid has kind of turned that on its head,” he said.“It’s a precarious situation if something happens and it flows through a greenhouse and you can’t pick your crop,” Chapdelaine said. “We’re taking huge precautions to make sure everyone comes in suited and masked up. You have to do all the right things and still hope for the best.”In the U.S., migrant farm workers primarily come from Mexico and Latin America.President Donald Trump has sought to maintain the flow of foreign workers to U.S. farms during the pandemic, waiving interview requirements for some guest workers when consular offices shut down and exempting them from a temporary immigration ban. But so far, the administration hasn’t created rules to protect the workers. Democratic Representative Jimmy Panetta of California and 71 other members of Congress urged in a letter last week that the next coronavirus relief package include funding dedicated to combating spread of the virus among farm workers.Even before infections started to creep up, there weren’t enough workers, causing harvest issues in parts of the U.S. Some prices started to move up. A 2-pound package of strawberries is fetching about 17% more than it was last year, and a pint of cherry tomatoes is 52% higher, USDA data as of May 22 show.So far, though, the price impact has been limited. As restaurants shuttered during virus lockdowns, many farmers lost a key source of produce demand, creating some supply gluts.Now, stay-at-home restrictions are easing in all 50 states, and some restaurants are opening back up. Meanwhile, labor shortages could get worse as illness among farm workers deepens.“The cost will go up, and there will be a little bit less available,” said Kevin Kenny, chief operating officer of Decernis, an expert in global food safety and supply chains. “You really will see some supply issues coming.”Perishable crops that require more hands on labor to pick are the most at-risk of disruptions, including olives and oranges, Kenny said.In Florida, oranges are “literally dying on the vines” as not enough migrants can get into the country to pick the crops and things like processed juice will probably cost more in the coming months, he said.When the virus spread among America’s meat workers, plants were forced to shutter as infections rates topped 50% in some facilities. Prices surged, with wholesale beef and pork more than doubling, and grocers including Kroger Co. and Costco Wholesale Corp. rationed customer purchases. Even Wendy’s Co. dropped burgers from some menus. After an executive order from Trump, plants have reopened, but worker absenteeism is restraining output. Hog and cattle slaughter rates are still down more than 10% from last year.The produce industry could see similar problems because workers face some of the same issues. They sometimes work shoulder to shoulder. They are transported to and from job sites in crowded buses or vans. They often come from low-income families and can’t afford to call in sick or are afraid of losing their jobs, so they end up showing up to work even if they have symptoms.“A lot of people are concerned that the summer for farm workers will be like the spring for meat packers,” said David Seligman, director of Towards Justice, a nonprofit law firm and advocacy organization based in Denver.There’s “a lot of worker fear because of the asymmetry of power in this industry,” Seligman said. “We’re hearing anecdotal reports. Gathering information about farm workers is very hard because of how scared and how isolated they are.”There are some key differences between the two industries. For one, farm workers spend most of their time outside, and some research has shown that the virus is less likely to be spread outdoors. Meanwhile, meat workers are piled into cold, damp factories where infectious diseases are particularly hard to control.In other ways, farm workers are more exposed. Living conditions can be even more cramped, with close-together bunks and communal cooking and bathroom facilities that make physical distancing extremely difficult.Plus, the workers move around so much, meaning increased chances of exposure for themselves and more chances that sick individuals can spread the illness to other communities.In Oregon, a farm worker often may move a half dozen times during the summer, working for new growers and housed in new labor camps as they shift from harvesting cherries to strawberries to blueberries to pears, said Dale of the Northwest Workers’ Justice Project.Nely Rodriguez is a former farm worker who is now an organizer with the Coalition of Immokalee Workers in Immokalee, Florida, a major tomato growing area. She said that some farms are taking steps to protect migrants, such as having buses make more trips so workers won’t be as cramped and requiring them to wear masks, as well as providing more hand-washing stations and sanitizer.Lisa Lochridge, a spokeswoman for the Florida Fruit and Vegetable Association, also pointed to increased measures to protect workers and said some employers even set aside separate housing to be used for a quarantine area if necessary. Cory Lunde, of the Western Growers Association, said farm owners are staggering start times, disinfecting buses and increasing distances between workers, both in the field and in packing facilities and offices.But protection measures can be spotty, said Rodriguez of the Coalition of Immokalee Workers. There aren’t yet any farm specific Covid-19 safety protocols from the federal government.Developing GuidanceThe USDA is “diligently working” with the the U.S. Centers for Disease Control and Prevention and the Occupational Safety and Health Administration “to develop guidance that will assist farmworkers and employers during this time,” the agency said in an emailed statement.“Additionally, considering the seasonal and migratory nature of the workforce, we are working to identify housing resources that may be available to help control any spread of Covid-19,” the USDA said.Harvests take place at different times across the country, depending on the weather and the crop. That means when gathering finishes in an early state like Florida, workers will travel into areas such as Georgia, North Carolina, Indiana and New Jersey, said Rodriguez of the Coalition of Immokalee Workers. They’ll often make the journey on old school buses rented by employers, sitting for 7 or 8 hours at a time with 45 people crammed in.“If there is a bunch of farm workers here that are sick, they can essentially spread this virus to other rural communities,” Rodriguez said.Many farm workers come from indigenous communities in southern Mexico and don’t speak English or Spanish as their first language, so they don’t have adequate information on the pandemic in a language they can understand, said Bruce Goldstein, president of Farmworker Justice, a national advocacy group.They typically don’t have easy access to coronavirus tests, and many are undocumented so they are concerned about reporting illnesses, he said.“They’re marginalized in Mexico. They’re similarly marginalized here,” Goldstein said. “People like that are incredibly vulnerable to Covid-19.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
SEOUL, Korea, Republic Of — South Korea on Saturday reported 39 new cases of the coronavirus, most of them in the densely populated Seoul area where officials have linked scores of infections to warehouse workers.Figures from South Korea’s Centers for Disease Control and Prevention brought national totals to 11,441 confirmed cases and 269 deaths. At least 12 of the new cases were linked to international arrivals.KCDC Director Jeong Eun-kyeong said Friday that at least 102 infections had been linked to workers at a massive warehouse operated by Coupang, a local e-commerce giant that has seen orders spike during the epidemic.The company has been criticized for failing to implement proper preventive measures and enforce distance between employees, with the virus discovered on safety helmets, laptops, keyboards and other equipment they share.Health workers have also found at least 266 infections linked to nightclubs and other entertainment venues in the Seoul metropolitan area, which saw huge crowds in early May as officials eased social distancing guidelines.The resurgence in infections has alarmed officials as millions of children have been returning to school nationwide.While shutting nightspots and public spaces to slow the spread of the virus, government officials have so far maintained the phased reopening of schools, expressing hope that the recent transmissions could be contained quickly.In other developments in the Asia-Pacific region:— FOUR NEW CASES IN CHINA: China on Saturday reported four new confirmed cases of the coronavirus, all brought from outside the country and no new deaths. Just 63 people remained in treatment and another 401 were under isolation and monitoring for showing signs of having the virus or of testing positive for it without showing any symptoms. China has reported a total of 4,634 deaths among 82,999 cases since the virus was first detected in the central industrial city of Wuhan. With virtually everyone wearing masks in public, most offices, shops and restaurants have reopened. But the economic fallout from months of lockdown in most of the country has left millions unemployed and, combined with a worsening trade dispute with the U.S. and drop in global demand, it remains unclear how many jobs will return. The central province of Hubei announced more than two dozen measures on Friday to revive the local economy, including a June shopping festival, accelerating the issuance of housing loans, funding support for travel agencies, and subsidies for vehicle purchases.— GERMANS RETURN TO CHINA: Around 400 German managers, workers and family members have begun returning to China aboard charter flights as multinational companies in the world’s second-largest economy seek to get their operations running again. A pair of flights from Frankfurt to the Chinese business hubs of Tianjin and Shanghai were organized by the German Chamber of Commerce in China in co-operation with Germany’s diplomatic missions and airline Lufthansa. They're the first repatriation flights from Europe to China for foreign nationals. China has largely banned all foreigners from entering because of the coronavirus outbreak. More than 5,200 German companies operate in China, employing more than 1 million people.___Follow AP news coverage of the coronavirus pandemic at http://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreak.The Associated Press
(Bloomberg) -- Australia’s government will call on states to eliminate payroll taxes as part of the nation’s efforts to jump-start the economy and create jobs, Treasurer Josh Frydenberg said in an interview with the Daily Telegraph.“I’d love the states to get rid of the payroll tax,” he said. They “have also got their own balance sheets, and their own economic capacity, and we’ve already announced very significant support, and will continue to look at opportunities, but the states will be required to do more I suspect going forward as well.”The government’s coronavirus recovery plans will involve changes to taxes on income, and for small and medium businesses, Frydenberg said in the interview. The proposals are expected to be finalized ahead of the government’s annual budget release in October, he said, according to the report. The Treasurer is also looking at reforms that would make it easier for small businesses to borrow, he told the Telegraph.New South Wales Treasurer Dominic Perrottet said earlier this month he was considering altering payroll taxes in his state as part of a major overhaul of the local taxation system.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
On one side of this fraught moment: the president of the United States, facing multiple crises less than six months before the election. On the other: Twitter, the social media giant, which has grappled for years with how to handle its most prominent — and divisive — user. Caught in the middle: reality itself, and whose version gets heard over all the noise.Twitter’s decision this week to stand up to President Donald Trump by attaching warnings to some of his many tweets has been years in the making, a culmination of American divisions playing out and being amplified across social media. It is fueled by some of the very elements that make modern American discourse so polarized, so fast-moving and — at the oddest of historical moments — so fragmented.Twitter's assumption of a stronger referee role in its approach to Trump's tweets reflects a “pretty radical change,” said Josh Pasek, an associate professor at the University of Michigan’s Institute for Social Research. “We really haven’t been at a place where social media companies were willing to take on this role.”But it also heightens the dangers of polarization. “When you can’t agree on the state of the world, you open up opportunities for people to question the motives of others," Pasek said. He says that makes existing conflicts worse and de-legitimizes people with diverging views. “You make it easier to see those people who differ from you as less American."For years, since long before he was president, Trump has used Twitter as a personal megaphone to build his personal brand, appeal to his supporters and attack his rivals of the moment. In the process, regardless of the facts at hand, he often creates his own version of reality — from birtherism to climate-change denial to exaggerations about voter fraud.On Wednesday, Twitter pushed back in the mildest possible way. For the first time, it added fact-check links to two Trump tweets about the supposed risks of voting by mail.Almost immediately, Trump turned the might of the U.S. government's executive branch on the company that feeds and amplifies him.On Thursday, he issued an executive order intended to chip away at the legal protections companies like Twitter enjoy. Undeterred, Twitter responded early Friday by flagging another Trump tweet — one that suggested he would have the National Guard fire on protesters in Minneapolis — with a warning for “glorification of violence,” which is against its rules. Users can still see the tweet by clicking through the warning.Trump responded by having the White House Twitter account — a public account that represents the executive branch of the government — post the same tweet. Twitter soon added a warning to that as well. Hours later, Trump sought to walk back the meaning of the original tweet, writing that he had merely “spoken as a fact” that looting can be followed by civilian shootings.The feud with Twitter serves as a convenient distraction for Trump from major challenges he currently faces, such as controlling the coronavirus pandemic and managing an economy hard-hit by COVID-19 restrictions. Unlike in those arenas, where researched hard numbers can mute the president's points, in the me-vs.-them battle of Trump and Twitter, his ability to make his point can be based largely on volume and bluster.“He can make hay about it,” said Melissa Ryan, CEO of the consultancy group Card Strategies, which researches online disinformation and right-wing extremism. “The administration is desperate to get the focus on anything that’s not 100,000 people dead.”But it also places social platforms in a tough spot: to police or not to police content. Either choice is extremely risky.The social media companies and their critics are arguing over when and how they should regulate the content on their platforms as coronavirus misinformation swirls and the 2020 U.S. presidential election looms. It has reached the point where it’s virtually impossible for social platforms to remain neutral — and where even fact-checking can mean taking a political stance.Facebook did not touch the same posts that Twitter labeled, a position backed directly by its CEO."I just believe strongly that Facebook shouldn’t be the arbiter of truth of everything that people say online,” Mark Zuckerberg told Fox News on Thursday, a statement he frequently repeats at moments like these. Facebook has long used fact checks on its site, done by third-party news organizations such as The Associated Press.Not long afterward, Twitter CEO Jack Dorsey tweeted that Twitter will “continue to point out incorrect or disputed information about elections globally." But he added: "This does not make us an 'arbiter of truth.'”“Facebook's approach is a strategic one from a business perspective," said Dipayan Ghosh, co-director of the digital platforms and democracy project at Harvard's Kennedy School. "Twitter is thinking about democratic interests and its impact on the world.”The tensions will likely only escalate as November nears and increasing numbers of potential voters argue it out — and choose their facts — on the major social platforms.Twitter’s actions add to ongoing outrage about the alleged suppression of conservative voices on social media, said Cayce Myers, an associate professor of communications at Virginia Tech. He said that risks further dividing social media platforms into echo chambers as the companies, not just the content they host, become politicized in the public mind.“The problem in it for Facebook is (that) staying out of it is also a political position,” Myers said. “You’re on a side. There’s no way to not be on a side of this. Regardless of what they’re going to do, they’re going to be placed on a side.”___Associated Press writers Tali Arbel in New York and David Klepper in Providence, Rhode Island, contributed to this report.Barbara Ortutay And Matt O'Brien, The Associated Press
LOS ANGELES — Forbes magazine, which once declared Kylie Jenner a billionaire on its cover, says she no longer deserves the title, but Jenner is pushing back.Forbes said in a story posted Friday that an examination of financial filings after the reality star and beauty mogul sold a majority share in her cosmetics company revealed that Jenner's worth was inflated. Jenner sold 51% of her Kylie Cosmetics company to Coty in a deal valued at $1.2 billion early this year."Kylie’s business is significantly smaller, and less profitable, than the family has spent years leading the cosmetics industry and media outlets, including Forbes, to believe," the magazine said in the story. “Forbes now thinks that Kylie Jenner, even after pocketing an estimated $340 million after taxes from the sale, is not a billionaire.”Jenner responded in a series of tweets, saying “what am i even waking up to. i thought this was a reputable site.. all i see are a number of inaccurate statements and unproven assumptions lol. i’ve never asked for any title or tried to lie my way there EVER. period.”She later tweeted, “but okay, i am blessed beyond my years, i have a beautiful daughter, and a successful business and i’m doing perfectly fine. i can name a list of 100 things more important right now than fixating on how much money i have.”Jenner’s business and social media prominence have made her stand out even in the exceedingly famous family behind “Keeping Up With the Kardashians.” She is the younger daughter of Kris and Caitlyn Jenner, sister to Kendall Jenner and half-sister to Kim, Khloe and Kourtney Kardashian.In March 2019, Forbes featured Jenner along with the headline, “At 21, Kylie Jenner Becomes The Youngest Self-Made Billionaire Ever.”On Friday, Forbes offered a starkly different headline: “Inside Kylie Jenner’s Web of Lies — And Why She’s No Longer a Billionaire."The story acknowledges that the coronavirus crisis and its effect on the cosmetics industry has hurt her net worth.But it says it is “likely” that the “business was never that big to begin with, and the Jenners have lied about it every year since 2016 — including having their accountant draft tax returns with false numbers — to help juice Forbes’ estimates of Kylie’s earnings and net worth.”The magazine said it cannot prove the documents were forged.Jenner's attorney says the story is “filled with outright lies.”“Forbes’ accusation that Kylie and her accountants ‘forged tax returns’ is unequivocally false and we are demanding that Forbes immediately and publicly retract that and other statements,” attorney Michael Kump said in an emailed statement. "We would not expect that from a supermarket tabloid, much less from Forbes.”Forbes spokesman Matthew Hutchison said in a statement the magazine's "extensively-reported investigation was triggered by newly-filed documents that revealed glaring discrepancies between information privately supplied to journalists and information publicly supplied to shareholders. Our reporters spotted the inaccuracies and spent months uncovering the facts. We encourage her attorney to re-read the article.”The spat between Jenner and Forbes spilled over to Wall Street, where shares of New York-based Coty Inc. fell more than 13% on Friday.___Follow AP Entertainment Writer Andrew Dalton on Twitter: https://twitter.com/andyjamesdalton.Andrew Dalton, The Associated Press
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Friday related to the national and global response, the work place and the spread of the virus.________________________BY LAND AND BY SEA: Passenger traffic has resumed at the main airport in Slovenia after being suspended for more than two months of suspension as part of lockdown measures.An Air Serbia flight from Serbia’s capital Belgrade was the first to land at the Ljubljana airport on Friday. Authorities say they expect most airlines to return by early July.— Canada’s transport minister says large cruises will continue to be prohibited from operating in Canadian waters until at least Oct. 31 because of the pandemic.— May is likely to set an aviation milestone: For the first time, Chinese airlines will operate more flights than U.S. carriers, according to aviation data firm Cirium. Airlines in China have slowly added flights since mid-February, while U.S. airlines cut schedules more sharply when the coronavirus wrecked demand for air travel in the U.S. The Transportation Security Administration screened 321,776 people Thursday, down 87% from the comparable day a year ago.— United Airlines said Friday it will cut 13 of its 67 senior-executive positions, with eight executives leaving Oct. 1 and five vacant jobs not being filled. The moves are part of United’s plan to cut management and support staff by at least 30% in October, the earliest it can do so under terms of $5 billion in federal aid it is getting to help cover payroll costs. American Airlines has announced a similar 30% cut in administrative jobs. United, American and other airlines are making early-retirement offers to cull workers.DELIVERY DEMANDS: UPS is imposing new surcharges on large shippers to account for increased traffic on its package-delivery network during the pandemic. United Parcel Service Inc. said surcharges for shipments within the U.S. will start Sunday and add 30 cents per parcel to ground and SurePost deliveries and $31.45 to oversize items. The fees target high-volume shippers who are sending more packages through UPS than they did in February. The move follows surcharges that UPS began imposing on international shipments in April. A UPS spokesman said the company routinely adjusts rates to reflect costs and other factors.SALES SURGE: Big Lots' first-quarter sales rose 11%, with same-store sales climbing 10.3%. The discount retailer's stores have remained open during the pandemic, with many consumers shopping for essentials. While sales are up strongly for the second quarter to date, Big Lots Inc. said Friday that it anticipates those sales moderating due to factors including: rivals reopen stores, the planned cancellation of its July Friends and Family promotion, possible inventory constraints and weakening stimulus-driven demand.SAVINGS SURGE: White House officials are predicting record saving rates as the country shut down amid the pandemic will lead to a surge in spending as states begin to reopen the economy.Larry Kudlow, the White House’s top economic adviser, said Friday that American personal saving rates--which the U.S. Bureau of Economic Analysis said Friday hit a historic 33% for April--could fuel spending “boom” as the nation begins returning to a semblance of normalcy. Kuldow’s comments came as President Donald Trump met with a group of executives from eight leading American companies to discuss ongoing efforts to reopen the coronavirus-battered economy.Among those officials who huddled with Trump and his senior aides at the White House were officials from Dunkin’ Brands, Gap Inc., Hasbro, Kroger, Microsoft, Southwest, United, and Wyndham Hotels & Resorts.TOKYO A GO GO: Tokyo will remove shutdown requests on more businesses in June, when theatres, cinemas, fitness centres and retailers in the Japanese capital can reopen after a coronavirus state of emergency ended this week.Governor Yuriko Koike said Tokyo is now ready to move to Step 2 of a three-phase roadmap designed to gradually reopen businesses in the city. Prime Minister Shinzo Abe declared an end to a seven-week emergency on Monday.— The governor of the Bank of Italy, Ignazio Visco, said in his annual address that Europe’s fourth-largest economy could contract by as much as 13% this year under a pessimistic scenario that foresees a “magnitude” drop in world trade and an intense deterioration of financial conditions.MARKETS: U.S. stock indexes ended mixed Friday, recovering from early declines as investors worried that the U.S. and China could be headed for another confrontation, this time over the autonomy of the former British colony of Hong Kong.The Associated Press
BRISBANE, Australia — The ship master of a Singapore-registered vessel that spilled some of its cargo off the Australian east coast has been charged with damage of the marine environment and pollution.The APL England was en route to Melbourne from China when rough seas caused 50 shipping containers to topple overboard last Sunday. The marine authority said the spill resulted from poor cargo loading.On Saturday, ship operator ANL said the APL England’s crew had done well to manoeuvr the ship to safety amid poor weather conditions. The ship is now detained at the Port of Brisbane.“This was an unnerving event, even for seasoned maritime professionals, and the captain and the crew have ANL’s full support,” the operator said in a statement.ANL also said it had contracted two companies to help with the cleanup, including the removal of debris and spilled containers. Only about 15 containers have been accounted for.Marine authority operations general manager Allan Schwartz handed down the charges against the ship master on Friday, a decision he said was not taken lightly.“This and other incidents remind us of the important role the ship’s master has in ensuring the ships that ply our waters are operated safely and do not damage our marine environment,” Schwartz said in a statement.Cleanup efforts were concentrated on beaches around eastern Sydney and north to Newcastle, 160 kilometres (100 miles) away.The Associated Press
Video conferencing provider Zoom <ZM.O> plans to strengthen encryption of video calls hosted by paying clients and institutions such as schools, but not by users of its free consumer accounts, a company official said on Friday. The company, whose business has boomed with the coronavirus pandemic, discussed the move on a call with civil liberties groups and child-sex abuse fighters on Thursday, and Zoom security consultant Alex Stamos confirmed it on Friday. Zoom has attracted millions of free and paying customers amid the pandemic, in part because users could join a meeting - something that now happens 300 million times a day - without registering.
In an email to Nike (NKE) staff obtained by Yahoo Finance, Nike CEO John Donahoe explained why the company decided to respond via Instagram (FB) to the racially motivated attacks on George Floyd, Ahmaud Arbery, Christian Cooper, and Breonna Taylor.
(Bloomberg) -- David Einhorn’s hedge funds surged 7.4% in May as U.S. stocks rallied.Even with the month’s gain, the Greenlight Capital funds are down 16.6% this year, according to an investor update on Friday viewed by Bloomberg. The rebound came as value stocks, long out of favor, beat out growth shares late in the month.The S&P 500 index’s 4.5% gain in May was fueled by fresh federal stimulus measures and hopes that global economies are on the mend as lockdowns ease. U.S. states’ jobless rolls shrank for the first time during the coronavirus outbreak, though millions more Americans filed for unemployment benefits.Einhorn’s value approach to investing has mostly been out of step with market trends in recent years. He’s still working to climb out of a hole that started with a 20% loss in 2015 and deepened with his steepest drop ever three years later, when the main fund fell 34%.With this year’s decline, he would need to return about 80% to get back to where he was at the end of 2014. The firm managed $2.6 billion as of Jan. 1, down from $12 billion at its peak.Einhorn told clients in his first-quarter letter that value stocks were poised for a rebound, as the number of cheap equities hit an extreme. He said he hadn’t been this optimistic about opportunities since the 2008 financial crisis.Much of Einhorn’s gains in the month have come from Green Brick Partners Inc., his largest U.S. stock holding at the end of the first quarter. The homebuilder surged 20%.A spokesman for New York-based Greenlight declined to comment.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The company of John Barrett, known for styling celebrities such as Hillary Clinton and Martha Stewart, filed for bankruptcy in New York.John Barrett Inc. sought protection from its creditors a little more than a year after leaving its perch on the penthouse floor of Bergdorf Goodman, where Barrett cut and colored the hair of New York’s well-heeled elite for more than two decades.The company listed as much as $10 million in assets and up to $50,000 in liabilities, according to the bankruptcy filing. An affiliated entity, Mezz57th LLC, also filed for Chapter 11, listing between $1 million and $10 million in liabilities.Barrett reopened his salon at a new location on 57th Street after leaving Bergdorf Goodman. It temporarily closed on March 17 due to the coronavirus pandemic, according to an Instagram post.Requests for comment sent to the salon’s lawyer, as well as through its website, weren’t immediately returned.The case is John Barrett Inc., 20-11318, U.S. Bankruptcy Court, Southern District of New York (Manhattan).For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- As China’s demand recovery outpaces the rest of Asia, falling fuel exports from the refining giant are providing a much-needed buffer for other processors in the region still grappling with lowered consumption and poor margins.China is curbing exports with refiners selling fuels locally amid a rebound in demand and move to cash-in on higher prices due to a government-imposed “floor price,” said traders and analysts. Shipments so far this month have halved from April and are a quarter of the monthly average in the first quarter, according to Kpler.The cuts have coincided with plant closures and maintenance across South Korea, Australia, Indonesia and the Philippines, tightening supplies and pushing prompt prices against later shipments in the narrowing of so-called contango. As refineries return to operation, however, the market rebalancing will depend on a sustained demand rebound.China’s refiners are being discouraged from sending fuels abroad due to weak demand from fuel-importing nations such as Indonesia, and lower export prices when compared with domestic sales, said Yang Xia, analyst with SCI99. Shipments are likely to continue falling this quarter, according to the industry consultant.On average, Chinese fuel marketers who sold cargoes abroad in April had a theoretical loss of 932 yuan a ton for gasoline and 1,486 yuan a ton for diesel, as opposed to domestic sales, data by SCI99 showed. The nation exported 400,000 barrels of clean fuels so far this month, according to Kpler.Fuel demandAs lockdowns across Asia eased, diesel has become one of the strongest performers as industrial activity returned. In Singapore, margins for the fuel have climbed more than 80% from its bottom in mid-May, while producing gasoline flipped into a profit last week before slipping into losses. Commuters who chose to drive their cars over traveling on public transport are boosting demand for the motor fuel.These gains, however, are at risk of being eroded as more refineries return from planned maintenance or consider higher operating rates with demand still well below pre-virus levels. If that happens, balances may potentially flip back into deep oversupply, weighing on margins, said the traders and analysts.Floating storage of clean fuels off Singapore -- while still sizable -- is beginning to shrink. The glut that’s seen as a proxy for the region’s fuel consumption and economic health had made its way into tankers during the peak of coronavirus lockdowns when excess fuel had no where to go.About 12.4 million barrels of clean fuels were floating in Malacca Strait, Singapore Strait and East of Singapore as of May 25, a 4.4% drop from the previous week, according to Kpler. In mid-May, the hoard was about 13 million barrels, and just 5.4 million barrels on April 28.Playing Catch-upDespite several bullish signs across Asian fuel markets, the near-term recovery in margins appears to be more related to supply cuts rather than thriving consumption, according to the traders and analysts.Despite a quicker recovery in China versus elsewhere in Asia, full recovery in China’s domestic air traffic numbers could take a few months, and even longer in some other countries, said Brendan Sobie, founder of aviation analysis firm Sobie Aviation.In India, one of Asia’s top fuel guzzlers, demand for gasoline and diesel were recovering, but remains about 40% below last year’s levels and could take until the end of 2020 to get close to full recovery.Read also: Unlike China, India Oil Demand Stays Weak as Economy FaltersHigher fuel prices currently seen in Asia could be short-lived, said Sri Paravaikkarasu, Asia oil director of industry consultant FGE. A stronger demand recovery may come in June, but if refiners boost processing rates, this will threaten fuel margins, she said.“They will have to juggle high product inventories and demand recovery,” said the Singapore-based analyst, adding that refiners may increase runs cautiously in the coming month. Another cautionary point is the possibility of a second wave of infections, which could stymie nascent recovery, she said.(Updates with analyst comment in eleventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Katie Santry joined The Final Round to discuss how she and her fiancé planning a socially distanced wedding after their original plans were canceled 12 days before the big day.
(Bloomberg) -- Investors across Wall Street are beginning to wonder if the risk rebound has further room to run. Fed policy is extremely stimulative, economies are reopening, and slices of the market hit hard by Covid-19 are joining in on the rally. But GMO, the famous money manager founded by Jeremy Grantham, isn’t buying it.Instead, the firm just reduced its net equity exposure for benchmark-free strategies by 30% to protect portfolios against the threat of large stock drawdowns. Ben Inker, head of asset allocation at GMO, joins the “What Goes Up” podcast to explain why.An excerpt from the show:“I haven’t heard anybody saying, ‘You know what? I’m buying Google today because I think it’s going to give me 2% real, and in this world I’m fine with 2% real.' If we were getting that, I would be a little bit less scared for the market than if people are saying, `Well with the Fed here the market can’t help but go up, so all I care about is the short-term.’''For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
JUNEAU, Alaska — Ocean Beauty Seafoods and Icicle Seafoods Inc. announced plans Friday to merge parts of their operations under a new company.The merger, set to take effect Monday, will include Ocean Beauty and Icicle shoreside plants in Alaska, according to a release. Financial terms were not released.Ocean Beauty and Icicle Seafoods each will own a 50% stake in the new company, OBI Seafoods LLC, the release states. Mark Palmer, president and CEO of Ocean Beauty, will be CEO of the new venture. John Woodruff, chief operating officer at Icicle, will be executive vice-president of Alaska operations.Palmer said discussions about a potential merger started in 2018. It comes as the companies look at ways to best position themselves in the face of market and fish-run fluctuations, he said, noting there is potential among the 10 plants included in the deal to specialize in certain areas.Palmer said there has been strong domestic demand for canned and frozen products. He said the merger provides an opportunity to “penetrate the best market right now, and we'll use those returns to drive more innovation and modernization of our facilities.”Woodruff, in a statement, said as a team “we are confident we can make improvements to benefit employees, fishermen, customers and vendors.”Ocean Beauty's smoked salmon and distribution operations will remain under existing ownership. Also not included in the merger are Icicle Seafoods' operations on the processing vessel Gordon Jensen and the Northern Victor, which is moored at Dutch Harbor, the release states.The Associated Press
(Bloomberg) -- A popular exchange traded fund that uses complex derivatives to track oil is being investigated by U.S. regulators over whether its risks were properly disclosed to investors, scrutiny triggered by crude’s historic slump during the coronavirus crisis, said three people familiar with the matter.The Securities and Exchange Commission and the Commodity Futures Trading Commission have both opened probes into the $4.64 billion United States Oil Fund, said the people who asked not to be named because the matter is private. The fund has lost 75% of its value this year.Issues the agencies are examining, the people said, include whether shareholders were adequately informed that the ETF’s value wouldn’t necessarily move in tandem with the spot price of oil and the fund’s recent decision to purchase crude contracts that expire further out in the future. The change in contracts USO was buying deviated from its past investment strategy.The inquiries into the ETF, known by its ticker USO, are in their early stages and may not lead to allegations of wrongdoing. United States Commodity Funds, the company that manages USO, hasn’t been accused of any misconduct by the SEC or CFTC.Senior executives at United States Commodity Funds didn’t respond to multiple requests for comment. Spokesmen for the SEC and CFTC declined to comment.The investigations are significant because USO has grown to be a dominant player in the market for crude futures. As it got bigger, the ETF attracted legions of mom-and-pop investors who saw it as an easy and simple way to wager on oil. These less sophisticated shareholders are among those who’ve endured heavy losses amid the oil rout, a plunge highlighted by the commodity’s first-ever slide into negative territory on April 20.Read More: For Creators of USO ETF, Troubles in Market Began a Decade AgoUSO rose 85 cents to close at $25.88 on Friday.USO has issued six disclosures to shareholders in the last two months noting changes to the fund’s investment strategy, which it has had to quickly rejigger in response to recent events. In the SEC filings, the ETF has said it’s buying longer-dated futures -- contracts that are typically less volatile than those that expire in the succeeding month.The shifts have led to concerns that USO could become increasingly disconnected from the spot oil price that it’s long sought to track. For its part, the fund emphasized in a Tuesday filing that it’s not a proxy for trading directly in oil markets, but carries many of the same risks. USO has also issued disclosures this month stating that its daily share moves may not correlate with changes in the price of oil and that “recent and unprecedented volatility” in crude markets demonstrates the potential risks of investing in the fund.USO buys futures, not physical oil. The fund mainly invests in CME Group Inc.’s benchmark West Texas Intermediate contracts. Its WTI holdings became huge in March as oil plunged, a drop triggered by falling demand during the coronavirus pandemic and a price war between Saudi Arabia and Russia.Extreme ConcentrationEven before oil fell to minus $37.63 a barrel on April 20, investors who concluded the rout had bottomed out rushed to purchase shares of USO to bet on a rebound. That buying surge contributed to USO amassing a quarter of all outstanding front-month WTI contracts, those which are closest to expiring. Such extreme concentration prompted CME to inform USO in late April that it was placing limits on the fund’s holdings of June, July, August and September contracts.The fund said in an April 24 SEC filing that investors should expect “continued deviations” between USO’s performance and the WTI benchmark, in part due to the new restrictions. The fund added that it might not be able to meet its objective of reflecting changes in the spot oil price.Risk ManagementUSO faces issues separate from regulators’ investigations. For instance, its sole broker, RBC Capital Markets LLC, has decided against adding new futures positions that would grow the size of the fund because of risk management concerns, according to a Tuesday SEC filing. In addition, USO has been awaiting SEC approval for more than a month to sell additional shares to investors eager to keep wagering on oil. WTI has rallied more than 75% in May, while USO has risen about 30%. In a filing on Friday, USO said that Marex Spectron will serve as an additional broker.Read More: Oil ETF Ensnared in Crude’s Crash Tries to Stave Off TurmoilSEC and CFTC officials have been in contact with each other about concerns related to USO, according to one person familiar with the matter. The CFTC also issued a rare public warning last week to retail investors to highlight the “unique risks” of commodity exchange traded products.“The value of the shares in the commodity pool may not track the value of the underlying asset over time,” the CFTC said in its May 22 statement. “This difference is because unlike with stocks, a futures contract cannot be held indefinitely in hopes that a fallen price will recover.”(Updates USO closing price in paragraph 7, updates with USO signing Marex Spectron as new broker in paragraph 13.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.