Miller Strategies COVID‐19 – Daily Briefing 14 May 2020 U.S
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Miller Strategies COVID‐19 – Daily Briefing 14 May 2020 U.S. HEADLINES The U.S. Navy hospital ship Mercy has left Los Angeles, ending a seven‐week deployment aimed at easing the burden on the region’s medical system, U.S. Northern Command said. About 60 personnel will remain to work at skilled nursing facilities, according to a statement. Mercy docked at the Port of Los Angeles on March 27. The USNS Comfort spent April in New York City on a similar mission. Abbott Labs slipped 3% pre‐market on Friday after the FDA issued a warning on possible accuracy issues with the device maker’s ID Now test for Covid‐19 infections. Quidel, the maker of a competing test, rose 2.8%. “Although it remains to be seen if there are repercussions from this study’s results, the headlines come at a time when new rival tests are coming online, including QDEL’s rapid antigen Sofia,” JPMorgan analysts led by Tycho Peterson wrote. Department store giant J.C. Penney Co. filed for bankruptcy, punctuating a slow, arduous decline for the once ubiquitous mainstay of America’s shopping malls. While the sudden shock of coronavirus‐related sales losses ultimately undid the company, J.C. Penney has struggled for years under a multibillion‐dollar debt load. Its bankruptcy filing in Houston included $900 million of financing to fund the company through its restructuring, including $450 million of fresh capital. The retailer ‐‐ once a favorite of middle‐class suburban consumers ‐‐ had been seeking solutions to address billions of dollars in obligations after revenue evaporated amid government‐imposed lockdowns to help stem the Covid‐19 pandemic. The chain, based in Plano, Texas, skipped debt payments before the filing, putting it on the path toward a default. Management held talks about bankruptcy financing with lenders including KKR & Co., Ares Management Corp. and Sixth Street Partners, Bloomberg has reported. Founded by James Cash Penney in 1902, J.C. Penney operated 846 department stores in 49 states and Puerto Rico as of Feb. 1, according to company filings. Chief Executive Officer Jill Soltau, the company’s first female head, joined in 2018 and embarked on a lofty turnaround plan. FROM CONGRESS House Speaker Nancy Pelosi is pushing ahead with a vote this evening on a $3 trillion Democratic‐only virus relief bill despite the misgivings of some liberals and moderates in her party and the fact it has no chance of ever getting signed into law. Lawmakers began consideration of the stimulus package and a measure to allow proxy voting under restrictions that have now become common place during the coronavirus pandemic: face covers and limits on the number of members on the floor at any one time. Senate Majority Leader Mitch McConnell said he’s spoken with Trump and Treasury Secretary Steven Mnuchin about the next phase of stimulus but they’ve set no date for getting it done. He dismissed the House Democratic legislation, known as the Heroes Act, as “a $3 trillion left‐wing wish list.” The White House said President Trump would veto it if it ever got to his desk. The chairman of the Senate energy committee says to look for a big bipartisan energy package back on the floor this summer, as GOP leaders put a premium on bills that already have substantial bipartisan backing. The energy bill—which stalled on the floor in March over a single amendment to curb HFCs, a “super” climate pollutant used as a refrigerant—still faces a big hurdle as long as the impasse over that issue remains unresolved. Senate leaders have begun fleshing out the summer floor schedule, which thus far includes plans for taking up some must‐pass bills, including the fiscal 2021 defense authorization bill, before the July 4 holiday. But Energy and Natural Resources Committee Chairman Lisa Murkowski (R‐Alaska) in an interview said she is optimistic opposing sides can break the impasse over phasing down hydrofluorocarbons that sidelined the energy bill (S. 2657) in March. The bill, cosponsored by Sen. Joe Manchin (D‐W.Va.), includes measures to boost battery energy storage, more rapidly deploy more carbon capture and storage and advanced nuclear reactors, and improve energy efficiency. Senate Majority Leader Mitch McConnell (R‐Ky.) “is looking for those measures that are ready to go,” Murkowski said. McConnell put the energy package on pause during the March impasse. That means it can be reconsidered quickly if an HFC deal is reached. FROM THE ADMINISTRATION President Donald Trump on Friday officially introduced a former pharmaceutical executive and a four star‐general who will lead his crash coronavirus vaccine effort. The President named General Gustave Perna, who directs the U.S. Army Materiel Command, as chief operating officer of “Operation Warp Speed,” likening it to the Manhattan Project effort to develop the atomic bomb. “That means big and that means fast,” Trump said in remarks from the White House Rose Garden. Former GlaxoSmithKline Plc executive Moncef Slaoui will be the project’s “chief scientist,” Trump said, calling him “one of the most respected men in the world in the production and really the formulation of vaccines.” “I’d love to see if we could do it before the end of the year,” he said. “It’s risky, it’s expensive, but we’ll be saving massive amounts of time, we’ll be saving years.” Operation Warp Speed seeks to accelerate a process that is typically years long into a matter of months. Some health experts have cast skepticism at the idea that a vaccine could be ready for emergency use in at‐risk populations by the end of the year, while others like billionaire Bill Gates have said a vaccine could be ready within months. The White House wants Congress to require hospitals and insurers to reveal the prices they negotiate for medical services as part of the next round of coronavirus stimulus, in an effort to short‐circuit a legal battle with the health care industry. The U.S. Health and Human Services department published two regulations last year requiring the prices be made public. The industry challenged the rule in court arguing it’s violates the First Amendment, and delayed its implementation. The White House believes making it a law would end the matter, according to people familiar with the issue. Agriculture Secretary Sonny Perdue, Labor Secretary Gene Scalia, and NIH Dir. Francis Collins are among five new members of the White House Coronavirus Task Force, Vice President Mike Pence’s office said today. Peter Marks, FDA director of the Center for Biologics Evaluation and Research, and Thomas Engels, administrator of the Health Resources and Services Administration were also named to the panel. The task force is entering a new phase focused on “getting Americans back to work and allowing businesses to re‐open,” according to the Office of the Vice President. The Federal Reserve further slowed the pace at which it plans to buy Treasuries under the unlimited program that began in March. The U.S. central bank, which has bought more than $1.5 trillion of Treasuries in daily operations over nine weeks in an effort to restore smooth market functioning during the coronavirus pandemic, on Friday said it would buy securities at a pace of about $6 billion a day May 18‐22, down from around $7 billion a day this week. The Treasury purchase operations began March 13 and peaked in size at $75 billion per day from March 19 to April 1. The pace was subsequently reduced in stages. There will be one or two operations each day, targeting either nominal Treasuries or inflation‐protected securities, according to the schedule. The Federal Reserve in a stark warning said stock and other asset prices could suffer “significant declines” should the pandemic deepen, with commercial real estate being among the hardest‐hit. The Fed’s twice‐yearly financial stability report flagged risks to the banking system and broader economy and highlighted its race to intervene in markets and temporarily dial back rules on financial firms amid the outbreak. The abrupt shutdown of economies triggered market uncertainty that upended trading from Treasury securities to junk bonds and led to dramatic swings in prices. Markets settled as the Fed flooded the financial system with liquidity. IN THE STATES Florida gyms can reopen, and retailers and restaurants will be able to operate at 50% indoor capacity, up from 25%, starting Monday, Governor Ron DeSantis said. The state started reopening last week, with DeSantis saying the Sunshine State had dodged the worst‐case scenarios predicted by some analysts. He said Friday that ventilator use and Covid‐19 patients in intensive‐care units have both declined significantly since the start of Florida’s stay‐at‐home order. “The American people never signed up for a perpetual shelter in place,” DeSantis said. New York City, Long Island and three other regions have failed to meet requirements for reopening, and as a result their lockdowns will remain in effect for at least two more weeks. Five upstate regions ‐‐ the Finger Lakes, Central New York, Mohawk Valley, Southern Tier and North Country ‐‐ met the criteria, according to an executive order signed Thursday night. New York, Long Island and Western New York met four of seven metrics, while the Capital and Mid‐ Hudson regions met five. The metrics include requirements for hospital‐bed capacity, testing and tracing. Coronavirus cases in the U.S. increased 2% compared with the same time Thursday to 1.43 million, according to data collected by Johns Hopkins University and Bloomberg News. The increase was above the average daily increase of 1.7% over the past week.