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Latest news

  • A rapid coronavirus test developed in the UK is close to gaining approval for use by health authorities in England

  • Ukraine said it would impose a stricter lockdown after Orthodox Christmas holidays in January

  • Campbell’s sales have risen as lockdown increased appetite for soups and other grocery staples

For the latest coronavirus news, visit our live blog

Japan launches third fiscal package; Russia emphasises targeted spending

Worrying data on coronavirus infections have added a new sense of urgency to policymakers’ search for solutions to the economic damage wrought by the pandemic. 

In the US, where a surge in cases has been followed in some states by record levels of hospitalisations and fatalities, the outgoing Trump administration made an effort to break the impasse in bipartisan talks to publish its own stimulus proposals worth $916bn. Congressional Democrats will take some persuading: the detail includes slashing funding for unemployment benefits from $180bn to $40bn. 

In Europe, where Germany and France are struggling to contain the second wave of the virus, the European Central Bank is likely to amplify its rescue efforts by increasing its bond-buying programme and helping banks keep credit flowing. The FT Editorial Board has come out strongly against the idea of cancelling governments’ debts, as pushed by member states such as Italy. Here are four things to watch at tomorrow’s ECB meeting.

Separately, an EU summit on Thursday and Friday — as well as discussing the outcome of Brexit talks between the UK and the EU — will try to finalise a deal over the bloc’s budget and its coronavirus recovery fund.

Japan, meanwhile, has launched its third stimulus programme of the year. The ¥30.6tn ($294bn) package — worth 6 per cent of gross domestic product — would also include money for “post-corona” investments in digital and green technologies.

But size isn’t everything, as a Russian minister was at pains to explain to the Financial Times in an interview. Vladimir Kolychev said his country’s targeted spending package made it much more efficient in handling the coronavirus crisis than its peers, despite it being one of the smallest in the G20 in terms of share of GDP.

Russia’s stimulus package one of the smallest in the G20

Markets

Exchange traded funds are on course for a record year, thanks to vaccine-derived economic optimism and Joe Biden’s US election victory. The surge of new ETF business comes as fears grow over valuations for US equities, which have hit a record despite the country’s rising number of coronavirus infections.

The surge in interest in Chinese healthcare stocks was highlighted by a 75 per cent jump in shares of JD Health on its trading debut in Hong Kong — the market’s biggest IPO of the year. JD and other online healthcare platforms have benefited from the switch to virtual consultations for patients as the pandemic took hold.

Big commodity traders have been very successful at taking advantage of pandemic chaos affecting the prices of oil and other raw materials. Trafigura today reported the best performance in its 27-year history, with record profits, earnings and cash flows — and big payments for its traders.

Business

British American Tobacco said demand for cigarettes had held up during the pandemic despite the closure of outlets such as airport stores and a smoking ban (now lifted) in South Africa.

Despite the serious downturn in visitors during the pandemic, Starbucks chief Kevin Johnson told the FT he was confident of their return as offices reopened. “People will be back in Starbucks stores at a rate far beyond what they were pre-pandemic,” he said. Smaller competitors look likely to be less fortunate: Euromonitor says the US alone will lose almost 2,000 coffee shops this year after a long period of expansion.

Column chart of Starbucks’ annual earnings per share ($) showing Wall Street forecasts rapid rebound from pandemic

Can innovations from luxury retailers such as mobile stores and “Dial-a-Santa” rescue the crucial Christmas shopping season — a period that generates up to half of annual sales for non-food businesses? Discounts in some stores have been brought forward to early December. As a Harrods chief explains: “We’ve got to make sure we get rid of the stock in case there is another lockdown.”

Louis Vuitton’s mobile store is travelling to US customers in New York, New Jersey and Connecticut © Louis Vuitton

Global economy

Kuwait may have a $550bn sovereign wealth fund, but it is struggling to pay its workers thanks to the slump in oil prices (which account for 90 per cent of its revenues) and parliament’s refusal to renew a debt law that elapsed in 2017, shutting off the option of tapping global markets. Government jobs account for 80 per cent of the Kuwaiti workforce and their salaries take up 52 per cent of state spending.

Shanghai correspondent Thomas Hale examines China’s export performance in our Trade Secrets newsletter. Strong sales of pandemic-related goods such as PPE have driven spectacular growth but how will this be affected by the introduction of coronavirus vaccines?

The young may be the hardest hit by unemployment during the pandemic, but older workers are also disproportionately affected and may struggle to find re-employment, writes economics correspondent Delphine Strauss. International business editor Peggy Hollinger says businesses need to ensure there are incentives for valued workers to stay in the workforce, a move that would also benefit companies and the wider economy.

Bar chart of Re-employment rates in the UK by age, three quarters to September 2019 (%) showing Over-50s are struggling to find employment after redundancy

Have your say

Coronavirus vaccines mean light at the end of the tunnel at last. But there’s a long way to go before the world can say goodbye to pandemic disruptions. Can governments roll out vaccine programmes swiftly, efficiently and fairly? And who should have priority? Please share your views with us — email us at covid@ft.com. Thanks

Polaris comments on Cinema will survive the pandemic apocalypse

I have my doubts about what has been concluded here as it overlooks two important trends. Firstly that home theatre technology is getting better and better. Larger, thinner and cheaper TVs, all with smart TV software built in, 4K as standard (for now, soon 8k) and high refresh rates. Coupled with great sound technology (eg Sonos). The home theatre experience can be legitimately better for a lot of people.

Secondly, if cinema is to survive, it will be in a different form. It will follow a recent trend of the movie and TV industry as a whole — it will become a feature to complement a product, not a product in its own right. Within 10 years, expect Disney or Amazon to purchase a large multinational chain and have it as a means to complement their Prime and Disney+ offerings eg exclusive, advanced or discounted showings for members.

The essentials

Stream chart showing 7 day moving average of Covid deaths in global regions. A recent resurgence in Europe means the global daily average has now eclipsed the global figure of 6,800 from the spring peak now hitting 10,615

Germany is the latest country to sound the alarm about rising infections, today reporting 20,815 new cases and 590 deaths, along with 4,257 people in intensive care, compared with 352 at the end of September.

In the US, the seven-day average of cases topped 200,000 for the first time, with 20 states experiencing their highest rate of daily cases since the start of the pandemic. New York City restaurants are facing a clampdown while Chicago correspondent Claire Bushey suggests avoiding airports and driving home for Christmas.

Get the latest data and compare country-by-country indicators with our interactive tool.

Final thought

“Never has our need for stories and the art of storytelling been greater than in the time of Covid,” says the author Elif Shafak. Read our series on the little bookshops that came to the rescue and literary editor Frederick Studemann on how they proved resilient through the lockdowns of 2020.

© Getty Images

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