TheChek News Flow

* Gates is hopeful that education can return before a vaccine is widely available, which he expects could take 18 months.

* He said the U.S. could reopen at the end of May at the earliest.

* But he cautioned that the pandemic has permanently changed how people act, and it will take a vaccine or effective cure to convince people to go out again.

Bill Gates thinks schools will be able to resume in the fall, he said in an interview with CNBC’s Becky Quick.

“I do think school will be able to resume in the fall,” Gates said. “But I don’t think this school year there’s going to be any significant attendance. You know, maybe in the summer, people will do something special. But that would be very hard to do.”

Governments around the world have ordered people to stay home, and elected officials in Arizona, California, Georgia, Michigan, Washington and other states have closed schools for the rest of the academic year.

Some schools have made it possible for students to take classes remotely over the internet, but Gates noted that many students don’t have the computers or internet connections necessary for remote learning.

“Most of the private schools, they’re used to online, they’ve made sure all their students have the device and the connectivity,” he added. “Different school districts have decided some don’t do online learning because it would be unjust in terms of the kids who don’t have access. And so that’s really a dilemma. There are philanthropists — Ray Dalio, Jeff Bezos and many others — who are trying to fill that gap, you know, get some devices and connectivity out there.”

More broadly, the U.S. could open back up at the end of May, Gates said. Before a vaccine is available, he said, countries that have had considerable epidemics must figure out which activities should come back. He suggested that people could probably return to manufacturing and construction, and hopefully education.

“I don’t think going to big, say, public sports-type events, that the economic benefit relative to the risks, that will work out until we’re back in normal times,” he said.

Gates pointed to businesses in China coming back to life and activity returning in South Korea, one of the first countries to face a surge of coronavirus cases.

“How do you draw that line for that period that’s gonna be longer than we want it to be?” Gates said. “That — eventually, the government’s gonna have to take all the expert input and create a new regime for what’s going on that’s extremely sensitive to how well it’s working through the quick-turnaround, prioritized testing.”

He also suggested the economy would not magically revert to the way it was before the pandemic, even once governments decide it’s safe to go back to work.

“The behavior of people in terms of wanting to travel or go to events or even go to a restaurant, it’s been utterly changed by the concerns about this disease,” he said. “No one should think the government can wave a wand and all of a sudden the economy is anything like it was before this happened. That awaits either a miracle therapeutic that has an over 95% cure rate, or broad usage of the vaccine.”

A vaccine could take 18 months

Last month, Gates stepped down from the board of Microsoft, which he co-founded 45 years ago, to focus on his health-related work at the Bill and Melinda Gates Foundation, which has committed up to $100 million to respond to coronavirus, Gates has backed a coronavirus test that people can conduct on their own at home, and he has said he would help pay for factories that can produce vaccines.

During the interview, Gates suggested therapeutic treatments for sick people could begin to roll out in four to six months, but it would take at least 18 months to develop a safe and effective vaccine.

“There’s an approach called RNA vaccine that people like Moderna, CureVac and others are using, that in 2015 we’d identified as very promising for pandemics and for other applications as well. And so if everything goes perfectly with the RNA approach, we could actually beat the 18 months.”

But he noted that vaccines aren’t perfect, especially for older patients.

“We don’t want to create unrealistic expectations. The efficacy of vaccines in older people is always a huge challenge. You know, it turns out the flu vaccine isn’t that effective in elderly people. Most of the benefit comes from younger people not spreading it because they’re vaccinated.”

He also dismissed the idea that there are a lot of asymptomatic coronavirus cases spreading the disease, which would make COVID-19′s actual fatality rate a lot lower than previously reported. “It’s very unlikely there’s a lot of asymptomatics who never become symptomatic and yet they’re infecting people,” he said.

Looking at countries with widespread testing like Germany and China, Gates says the fatality rate is around 1% or 1.2% assuming a “fully functioning health system.”

UK economy stagnated even before pandemic hit

Construction saw a notable fall in February as bad weather struck the housebuilding sector

The UK economy contracted even before the Covid-19 pandemic hit consumption, as the dominant services sector stagnated while wet weather hit output in the construction sector.

Output fell 0.1 per cent in February compared to the previous month, according to the Office for National Statistics. This is worse than a 0.1 per cent expansion expected by economists polled by Reuters.

Economists said wet weather weighed on building activity, which fell 1.7 per cent compared to the previous month.

The services sector, which accounts for about 80 per cent of output, flatlined, while manufacturing production expanded 0.5 per cent.

January’s output was revised up to 0.1 per cent, pushing the growth rate in the three months to February to 0.1 per cent.

“Today’s figures show that in the three months to February, which was before the full effects of coronavirus took hold, the economy continued to show little to no growth” said an ONS statistician.”

February’s output data are the last to refer to the pre-pandemic period.

Since mid-March, consumption has crashed following the lockdown that closed down a large part of the services sector, including restaurants, cinemas and non-essential shops, while business activity plummeted to its lowest level in twenty years according to survey-based data. 

The February figures “will be the last figure that looks anything like “normal” for a while,” Paul Dales, chief UK economist at Capital Economics, said.

Labels are hosting online drawing classes and studio tours to connect with customers in isolation

With cities dormant under the shroud of a pandemic, fashion brands have found many of their traditional marketing tactics either impossible to execute or ill suited to a global crisis. Suddenly, there are no shops open in which to hold events, few commuters to take in ads on public transit, and no summer festivals around which to merchandise collections. In response, labels of all sizes are experimenting with initiatives to capture the attention of screen-glued audiences now largely confined to their homes.

For many, this has meant quickly rolling out new types of content via Instagram — fashion’s favourite app — and the channel with the lowest barrier to entry. At the end of March, Loewe, the LVMH brand led by Jonathan Anderson, debuted a series of digital events called Loewe En Casa. In the series, artisans who have been nominated for the Loewe Foundation Craft Prize offer tours of their studios, demonstrate their respective practices via instructional workshops, and participate in live interviews. Elsewhere on Instagram, brands such as Nanushka are offering respite from work-from-home torpor in the form of guided meditations and yoga classes, while Marc Jacobs has tapped illustrators to lead a series of guided drawing sessions called Drawn Together. The idea with each of these initiatives is to create points of contact between the brand and the audience — to stay on the consumer’s mind even when shopping is not.

Labels helmed by big, outspoken personalities are at a natural advantage in this new landscape. Social media may have been hijacked long ago by advertising, but it was created to facilitate connections between individuals, and still works best — and feels most natural — when used in this fashion.

Jacquemus, the decade-old French label known for statement accessories such as its miniature Chiquito bag, has seen tremendous growth over the past year. It now boasts 2m Instagram followers, up from about 750,000 at the end of 2018, thanks in large part to the charming persona of its founder, Simon Porte Jacquemus.

Jacquemus typically uses the brand’s Instagram as though it is his personal account, mixing runway and lookbook shots with photos and captions that are funny, insouciant and seemingly unmediated by a PR team. Last week, he prompted followers to mimic one of his posts — a photo of someone standing on tiptoes, heels hovering above oranges like a pair of his stilettos — and share it using the #jacquemusathome hashtag.

With cities dormant under the shroud of a pandemic, fashion brands have found many of their traditional marketing tactics either impossible to execute or ill suited to a global crisis. Suddenly, there are no shops open in which to hold events, few commuters to take in ads on public transit, and no summer festivals around which to merchandise collections. In response, labels of all sizes are experimenting with initiatives to capture the attention of screen-glued audiences now largely confined to their homes.

For many, this has meant quickly rolling out new types of content via Instagram — fashion’s favourite app — and the channel with the lowest barrier to entry. At the end of March, Loewe, the LVMH brand led by Jonathan Anderson, debuted a series of digital events called Loewe En Casa. In the series, artisans who have been nominated for the Loewe Foundation Craft Prize offer tours of their studios, demonstrate their respective practices via instructional workshops, and participate in live interviews. Elsewhere on Instagram, brands such as Nanushka are offering respite from work-from-home torpor in the form of guided meditations and yoga classes, while Marc Jacobs has tapped illustrators to lead a series of guided drawing sessions called Drawn Together. The idea with each of these initiatives is to create points of contact between the brand and the audience — to stay on the consumer’s mind even when shopping is not.

Labels helmed by big, outspoken personalities are at a natural advantage in this new landscape. Social media may have been hijacked long ago by advertising, but it was created to facilitate connections between individuals, and still works best — and feels most natural — when used in this fashion.

Jacquemus, the decade-old French label known for statement accessories such as its miniature Chiquito bag, has seen tremendous growth over the past year. It now boasts 2m Instagram followers, up from about 750,000 at the end of 2018, thanks in large part to the charming persona of its founder, Simon Porte Jacquemus.

Jacquemus typically uses the brand’s Instagram as though it is his personal account, mixing runway and lookbook shots with photos and captions that are funny, insouciant and seemingly unmediated by a PR team. Last week, he prompted followers to mimic one of his posts — a photo of someone standing on tiptoes, heels hovering above oranges like a pair of his stilettos — and share it using the #jacquemusathome hashtag.

Summersalt, an American travel-wear brand built on swimwear and comfy basics, is using a less conventional content channel to engage its followers: SMS. In mid-March, it launched a tool called Joycast, aimed at delivering notes of emotional support and pleasant distraction to subscribers’ text-message inboxes, ranging from meditation videos to cute animal photos.

Although Summersalt has used SMS as part of its communications strategy for several years — co-founder and chief executive Lori Coulter favours the channel for its direct-to-consumer intimacy — Joycast represents a turn towards non-commercial content.

“When we started Summersalt, one of our goals was to spread joy by inspiring wanderlust,” says Reshma Chattaram Chamberlin, the brand’s other co-founder and chief digital brand officer. “With all the uncertainty in the world right now, we wanted to continue to find ways to spread joy, just differently.”

Chamberlin says that Summersalt took Joycast from idea to execution in just two days, and within hours of launching on March 17 had picked up hundreds of subscribers. Managed by Summersalt’s 13-person customer care team, the service has continued to gain momentum.

“We’ve had thousands of people opt in to the Joycast,” Chamberlin says, “both existing customers and people who’ve never heard of our brand before.”

Each of these social-first ventures is a product of speed and thrift. None of them are especially resource-intensive, and all were executed in a matter of weeks, if not days. They are, in this sense, the polar opposite of the industry’s traditional marketing vehicle — the fashion show. With men’s fashion events in June and July’s haute couture week already cancelled, brands are facing a major creative challenge — and an opportunity.

Questioning the necessity of costly, high-production shows has become, over the past half-decade, as common an industry trope as Meryl Streep’s cerulean speech from The Devil Wears Prada, and now brands have a once-in-a-lifetime chance to upend the system and devise different methods of introducing consumers to their new collections.

It might be months before physical distancing protocols are relaxed in Europe and North America; and even when cities emerge from stasis, brands will be operating under a new commercial paradigm. “What the ‘new normal’ looks like after this crisis is not clear yet, but we do expect enduring changes in consumer behaviour — with consumers being even more health- and environmentally aware, and digital becoming even more paramount and consumer pathways migrating even faster from offline towards online,” says Sarah Willersdorf, head of luxury at Boston Consulting Group.

“Companies who have produced real time, rough-and-ready content to keep their customers engaged throughout this crisis have seen early successes, and I believe this increased focus on connection and community will remain as stores start to reopen.”

Eventually, the situation will stabilise, and consumers will return to shopping. When they are ready to open their wallets again, the brands that were able to forge genuine connections with them at the pandemic’s nadir will stand to benefit most.

U.S. Surpasses 430,000 Coronavirus Infections

Disproportionate impacts are seen for U.S. people of color; China lifts Wuhan lockdown; other countries extend shutdowns

U.S. cases of the new coronavirus grew to more than 430,000 Wednesday, as the country recorded its deadliest day yet.

There were 1,973 deaths from Covid-19 in the U.S. during the 24-period ended 8 p.m. Wednesday, according to a Wall Street Journal analysis of data from Johns Hopkins University.

In the previous 24-hour period, 1,939 people died from the illness caused by the virus—nearly 50% more than any other day of the pandemic.

Contributing to Tuesday’s national record, New York, New Jersey, Louisiana and Illinois reported their highest daily death tolls from Covid-19, the respiratory disease caused by the new coronavirus, reflecting a steep climb in U.S. fatalities even as officials in some of the hard-hit states cautiously advised their outbreaks were beginning to slow.

Globally, the number of reported coronavirus cases topped 1.5 million, with more than 88,000 deaths, according to the Johns Hopkins data, although the exact figure could be higher. Lack of widespread testing, false negatives and differences in reporting standards have made it challenging to track the extent of the virus.

The pandemic has killed more than 14,600 people in the U.S.—more than the 2009 H1N1 pandemic killed over a 12-month period, according to data from the U.S. Centers for Disease Control and Prevention.

New data show the pandemic is exacting an especially heavy toll in some regions on people of color. Black and Hispanic New Yorkers make up a disproportionate share of fatalities from Covid-19, according to newly released data by New York state.

“We’re seeing folks who have struggled before really being hit particularly hard by the coronavirus,” said New York City Mayor Bill de Blasio at a press conference Wednesday.

New York’s racial data followed a report from Chicago that found black residents accounted for 71% of the city’s coronavirus deaths although they make up just 29% of the population. In Michigan, black people made up 40% of the state’s reported deaths but 14% of the state’s population, according to state and federal data. Similarly, in Louisiana, black people make up 70% of Covid-19 deaths, while representing 32% of the state’s population.

Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Wednesday that the African-American community is at higher risk for diseases, including the new coronavirus. He urged both young and elderly African-Americans to take extra precautions and continue mitigation efforts.

“We are not going to solve the issue of health disparities this month or next month. This is something we should commit ourselves for years to do,” Dr. Fauci said. “But what we can do now, today is to prevent people who are put at higher risk because of their demographic group from getting into a situation which is much, much more deleterious than the general population.”

New York Gov. Andrew Cuomo said more people in his state died of coronavirus on Tuesday than any other day, with 779 deaths, bringing the statewide death toll to 6,268. A surge in critically ill patients in New York City is forcing major hospitals to make worst-case scenario plans for who will live and die, as the coronavirus peaks and strains emergency supplies.

Despite the developments, Mr. Cuomo said social distancing was helping bring down hospitalizations. “There is good news in what we’re seeing, that what we have done and we are doing is actually working,” he said.

In another heartening sign, an emergency field hospital in Seattle meant to treat non-Covid-19 patients will be dismantled and sent to a state with a greater need, Washington Gov. Jay Inslee said.

“Don’t let this decision give you the impression that we are out of the woods,” Mr. Inslee said Wednesday. “We have to keep our guard up and continue to stay home unless conducting essential activities to keep everyone healthy.”

Secretary of State Mike Pompeo said Wednesday that since the end of January, the U.S. had repatriated more than 50,000 Americans from more than 90 countries; they were stranded as governments trying to contain the coronavirus outbreak sealed borders and prohibited many flights

In a bid to address testing shortages, the Trump administration said Wednesday it would allow pharmacists to administer tests for coronavirus. Testing efforts so far have been dogged by delays, shortages, and restrictions limiting who can get tested.

With the virus’s economic fallout rippling across America, Europe, Iran, India and elsewhere—millions of people have been thrown out of work—top U.S. lawmakers said they planned to move to provide hundreds of billions of dollars in new funding for small-business loans.

Discussion on additional aid comes as lawmakers, business advocates and entrepreneurs say a federal program administered by the Small Business Administration has failed to distribute funds quickly to help companies weather the fallout.

Meanwhile, President Trump replaced Glenn Fine, the Pentagon’s acting inspector general, who had been charged with monitoring the roughly $2 trillion federal pandemic stimulus law, administration officials said. It is the second high-profile ousting of an inspector general in recent days, and the latest bid by Mr. Trump to exert increased control over personnel across the government.

Unemployment benefits promised under the stimulus law—which may be more generous than what employers could offer—have tipped the scales for some companies in favor of laying off employees.

The economic pressure on Americans continues to build. Nearly a third of U.S. apartment renters didn’t pay any of their April rent during the first week of the month, according to figures from the National Multifamily Housing Council and a consortium of real-estate data providers.

Still, U.S. stocks rose Wednesday, even as European markets edged lower on grim economic forecasts.

European Union finance ministers suspended talks early Wednesday on a half-trillion-euro ($544 billion) aid package, unable to resolve differences within the bloc over how to share the rising costs of the health crisis.

In France, which has recorded more than 10,000 Covid-19 deaths, the central bank Wednesday forecast the biggest drop in economic activity since the end of World War II.

British Prime Minister Boris Johnson is “improving” after spending two nights in intensive care, “sitting up in bed and engaging positively with the clinical team,” U.K. Chancellor of the Exchequer Rishi Sunak said Wednesday. Mr. Johnson was admitted to a hospital Sunday suffering from coronavirus symptoms.

In Wuhan, China, the city of 11 million where the outbreak first began, trains and flights began leaving early Wednesday for major destinations across the country. Wuhan’s reopening comes as China’s National Health Commission reported 62 new infections, with all but three coming from overseas returnees.

Wuhan accounts for about 61% of China’s more than 80,000 coronavirus cases, though epidemiologists, U.S. intelligence sources and Wuhan residents suspect that Chinese authorities substantially undercounted infections and deaths over the past several months.

As Wuhan restarts normal life, government leaders managing lockdowns in other countries were watching for lessons on how to reopen their societies without triggering a second wave of infections.

Italy and Spain, the hardest-hit European countries, headed into Easter weekend in strict lockdown, even as official daily counts of coronavirus infections and deaths were slowing.

Austria began a gradual easing of its month-old lockdown this week, and the Czech Republic and Denmark planned to follow suit after Easter.

In Iran, which also reports declining Covid-19 death rates, lawmakers and health officials have warned that the planned reopening of government offices and smaller businesses this weekend risks triggering a new wave of infections.

Opec seeks grand bargain to lift prices amid pandemic

US’s reign as world’s biggest oil producer could end without a deal at meeting this week

The US’s reign as the world’s biggest oil producer depends on Saudi Arabia and Russia agreeing to slash supply at crucial videoconference meetings on Thursday and Friday.

Financial markets will be on guard as Opec ministers try to end a market share war and lift oil prices devastated by the coronavirus pandemic and the collapse of fuel demand.

A grand bargain, involving producers from Iraq to Oklahoma, is needed to steady a sector that has provided the lifeblood of the global economy for more than 100 years.

President Donald Trump has called for Opec and Russia to lead cuts of up to 15 per cent of global output. The G20 and International Energy Agency will be involved in the meetings. Officials in Texas and Canada say their companies could reduce supply.

But while the momentum has built towards a historic agreement, it is far from clear a deal can be sealed — or whether the cuts would be enough to overcome the loss of almost a third of global oil demand.

Here are the positions of the key players ahead of Thursday’s and Friday’s meetings:

North American production could collapse without a deal

If Opec and Russia do not agree a deal, oil prices will sink to $10 a barrel and US output will be almost halved — from 13m b/d to 7m, said Scott Sheffield, head of Permian producer Pioneer Natural Resources, one of Texas’s leading shale companies.

“It would decimate the oil and gas industry in the US,” Mr Sheffield told the Financial Times, “with more bankruptcies happening faster”.

A deal would restore prices to $35 or more, but the producers would still struggle and the US would lose 3m b/d of supply, Mr Sheffield said.

That is what shale executives want Riyadh and Moscow to hear: the US government might not let shale producers join cuts with Opec, but production is falling anyway.

Mr Sheffield leads one camp urging supply restraint in Texas. Harold Hamm, head of Continental Resources and a friend of Mr Trump, has lobbied for tariffs on Saudi and Russian crude, an idea also supported in Canada’s oil patch.

Mr Sheffield said the supermajors that oppose his pitch want $10 oil to allow them to snap up weaker rivals. Executives at bigger companies say independent operators spend too much money producing costly oil — and the market is exposing them.

What does Trump want?

Mr Trump likes cheap gasoline and does not like Opec — that has been his position for years. But his administration has also proclaimed a strategy of American “energy dominance” predicated on the US producing more oil than any other country. The price collapse threatens this.

Reflecting the contradiction, Mr Trump has lauded collapsing fuel prices as a “massive tax cut” while also coaxing Riyadh and Moscow to start cutting supply to raise prices.

He is being assailed by lobbyists from across a divided oil industry.

Shale producers have urged him to suspend military aid to Saudi Arabia, impose tariffs on imports, hit Russia with new sanctions, or provide financial assistance to US energy companies.

Their bigger rivals such as ExxonMobil and Chevron say the free market should rule — and seemed to have Mr Trump’s ear after a meeting last week.

The White House has made two concrete moves. First, pushing a plan to soak up excess crude by giving access to US strategic oil-storage facilities.

The second is US pressure on Saudi Arabia, which called Thursday’s emergency Opec+ meeting almost immediately after President Trump claimed Riyadh and Moscow would agree cuts of 10m to 15m b/d.

Saudi Arabia wants to placate Trump, but win price war

Saudi Arabia’s public message has been clear since last month: it will cut production, but only if others do, too. Russia’s failure to accept those terms in early March blew up their four-year-old supply pact and triggered the price war — and may yet derail this week’s crucial meetings, too.

A month of Saudi Arabia talking down prices and ramping up supply has followed. The kingdom says it is now producing 12.3m b/d, a record high in a market experiencing its biggest demand crash in history.

“It’s about time Saudi Arabia stopped giving everyone a free ride,” said one person close to the state energy company Saudi Aramco.

Mr Trump has changed the calculus. His pressure on Riyadh has forced a shift, said two people briefed on the matter.

But the kingdom still has its terms. New cuts must be global: not just Opec and its previous collaborators, but also North American producers, Brazil, and others.

The conditions may be deliberately set too high. If it results in only a small production deal, Saudi Arabia may hope to have done enough to keep its US ally on side, argued JPMorgan analyst Christyan Malek, while not derailing its long-term strategy to win back market share.

Russia: da or nyet?

A month ago, before the scale of the demand collapse was understood, Russia seemed happy to let prices fall to hurt the US oil sector. Igor Sechin, head of state-backed Rosneft and a close ally of Vladimir Putin, finally won an argument to ditch Opec deals and go for market share.

But Russia is now struggling to find buyers for its crude and the possibility of a prolonged period of oil at $20 a barrel — a third its price earlier this year — has unnerved the Kremlin, even if its economy is more diversified than Saudi Arabia’s. Its own domestic consumption is plummeting, and storage is filling up.

Russian news agencies reported on Wednesday that the country could cut up to 1.6m b/d of supply.

Moscow could still block a deal. If it does join cuts, Russia wants all others involved as well, and rejects the idea that price-induced supply drops — like those under way in the US — should count.

It could also seek an easing of US sanctions or some other bargain with Washington.

“This whole meeting might just be for show,” said Bjarne Schieldrop at Swedish financial group SEB, arguing that Moscow and Riyadh could blame a failure on G20 countries and “get some political heat from President Trump off their backs”.

Why is the G20 involved?

The push to get other countries to cut has come, at least partially, from an unlikely source. The International Energy Agency, a Paris-based club of wealthy countries, was founded after the Arab oil embargo in 1973-74 as a bulwark against Opec’s attempts to raise prices.

But Fatih Birol, the head of the IEA, argued that the scale of the oil collapse poses a risk to global financial stability and is too big for one group to tackle alone. So, with Saudi Arabia’s help as this year’s president, he has enlisted the G20.

“Such a big problem needs a collective response from around the world,” Mr Birol told the FT. “It is a G20 issue.”

Mr Birol has cajoled producers such as the US, Canada and Brazil to join the Opec talks. They intend to say production cuts already made in their weakened oil sectors should count as their contribution to the collective effort.

The IEA argued it is even in the interests of small producers, such as Spain, to help stabilise the market by buying oil for their emergency reserves.

“It gives a strong message to the market that the global community takes this seriously,” Mr Birol said.

But a meeting aimed at effectively boosting oil prices faces hurdles. France, where the Gilet Jaune protests were sparked by rising fuel costs, has yet to confirm its attendance.