Category: Markets

More State, City Jobs Lost in Two Months Than During Recession

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In the past two months, states and cities have cut more jobs than they did after the last recession.

Even as businesses hired employees back as much of the nation started reopening, the number of workers on state and local government payrolls fell by 571,000 to 18.3 million in May, according to U.S. Bureau of Labor Statistics data released Friday. That pushed the number of job cuts to about 1.5 million over the past two months, roughly twice as many as were ushered in after the last economic contraction over a decade ago.

Many of the job losses may be reversed when idled employees are called back as states reopen schools and their economies. But the steep cuts underscore the deep financial strain on usually slow-to-act states and cities, which are facing massive budget deficits after surging unemployment and business closures decimated their tax collections.

“The main take away is that this is happening because of intense shortfalls on the state and local levels,” said Wesley Tharpe, deputy director of state research at the Center on Budget and Policy Priorities. “A lot of the decline we may be seeing may be furloughs, but without additional aid from federal policy makers a lot of those furloughs will become permanent layoffs because states have to balance their budgets.”

Most of the public sector losses where from schools with 373,200 jobs cut last month, which are likely to reverse when students return to classrooms. Outside of education, states cut 20,700 jobs and local governments eliminated 176,900 positions.

Such job cuts, if maintained, could exert a drag on the recovery. States alone are expected to face a $765 billion shortfall over the next three years based on projections by the Center of Budget and Policy Priorities. U.S. cities and towns are projected to lose about $360 billion of revenue through 2022, according to the National League of Cities.

Michigan is requiring state employees to take two days off every two weeks from May 17 to July 25, in order to cut payroll costs by $80 million. The state is expecting a budget gap twice what it suffered during the last recession. New Jersey may have to cut half of its 400,000 state and local employees if the federal government doesn’t help make up a $10.1 billion revenue shortage through June 2021, Governor Phil Murphy said.

Congress hasn’t passed direct aid to states and cities to address their budget shortfalls, with a Democrat-backed plan to provide some $1 trillion stalled.

“It’s going to be a very incomplete recovery, even at the end of 2021, if we don’t deal with the state and local sector,” said Josh Bivens, director of research at the Economic Policy Institute, in an interview this week.

— With assistance by Amanda Albright

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U.S. Hiring Rebounds, Defying Forecasts for Surge in Joblessness

America’s labor market defied forecasts for a Depression-style surge in unemployment by rebounding in May, signaling the economy is picking up faster than anticipated from the coronavirus-inflicted recession.

A key gauge of payrolls rose by 2.5 million, trouncing forecasts for a sharp decline following a 20.7 million tumble the prior month that was the largest in records back to 1939, according to Labor Department data Friday. The jobless rate fell to 13.3% from 14.7%.

U.S. stocks jumped after the report, adding to weeks of gains in equities since mid-March. The figures were so astonishing that President Donald Trump said he would hold a news conference at 10 a.m. in Washington to discuss what he called a “Really Big” report.

Read more: Bloomberg’s TOPLive blog on the jobs report

While the overall picture improved, one key number in the report deteriorated. Unemployment rates declined among white and Hispanic Americans, but the level ticked up among African Americans to 16.8%, matching the highest since 1984. That comes amid nationwide protests over police mistreatment of African-Americans, which have drawn renewed attention to black people’s economic plight.

The unexpected improvement wasn’t limited to the U.S. figures. North of the border, Canadian employment rose 290,000 in May, compared with forecasts of a 500,000 slump, its statistics office reported Friday.

The data show a U.S. economy pulling back from the brink as states relax restrictions and businesses bring back staff, while supporting a rebound in the stock market. At the same time, the lack of an effective treatment for Covid-19 — which has already killed more than 100,000 in the U.S. — means infections may persist and possibly surge in a second wave, with the potential to further shake the labor market and extend the economic weakness.

“Clearly the labor market turned the corner in late April, early May. We’re seeing a rebound of labor-market activity,” said Michael Englund, chief economist at Action Economics, who had estimated a payrolls decline of 2 million, the second-closest estimate. He expects June economic and labor-market data to show further improvements and plans to revise up his forecast for second-quarter gross domestic product.

The latest figures may give a boost to Trump, who has fallen behind Democratic challenger Joe Biden in polls amid the pandemic, recession and now nationwide protests over police mistreatment of African-Americans. The numbers also come amid a debate over the timing and scope of additional stimulus, with Democrats and Republicans at odds following record aid approved by Congress to cushion the downturn.

Economist forecasts had called for a decline of 7.5 million in payrolls and a jump in the unemployment rate to 19%. No one in Bloomberg’s survey had projected improvement in either figure.

One caveat noted by the U.S. Labor Department: the unemployment rate “would have been about 3 percentage points higher than reported” if data were reported correctly, according to the agency’s statement. That refers to workers who were recorded as employed but absent from work due to other reasons, rather than unemployed on temporary layoff.

The broader U-6, or underemployment rate — which includes those who haven’t searched for a job recently or want full-time employment — fell to 21.2% in May from 22.8%. In February, it was 7%, with the main unemployment rate at a half-century low of 3.5%.

Read more:

  • U.S. Jobless Claims Slow While Underscoring Persistent Weakness
  • Fed Vow Boosts Debt Binge While Borrowers Cut Thousands of Jobs
  • One-Third of America’s Record Unemployment Payout Hasn’t Arrived
  • Next Wave of U.S. Job Cuts Targets Millions of Higher-Paid Workers
  • What Pandemic’s Toll Reveals About Jobs in America: QuickTake

The employment-population ratio rose to 52.8% from 51.3%. The participation rate — or the sum of employed and unemployed Americans as a share of the working-age population — advanced to 60.8% from 60.2%.

Hiring in May was broad-based, with hard-hit restaurants rebounding along with retail and health care. But state and local government workers were hammered for a second month, with 571,000 job cuts.

“The bounceback started earlier than most expected, but don’t get too excited about this one month of data,” said Nick Bunker, an economic-research director at jobs website Indeed. “Sectors hit hardest by the coronavirus are the ones seeing the largest bounceback in employment.”

Manufacturing payrolls rose by 225,000, following a 1.32 million decline in April.

The share of the unemployed on temporary layoff fell to 73% from a record-high 78.3%. Goldman Sachs Group Inc. economists said before the report that if job losses remain concentrated in furloughs, “it would increase the scope for a more rapid labor market recovery.”

Average hourly earnings for employed private workers rose 6.7% in May from a year ago, following 8% in April, as the return of low-wage workers skewed pay figures back downward a bit.

— With assistance by Edith Moy, Chris Middleton, Elizabeth Dexheimer, and Benjamin Purvis

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Even Stock Optimists Grow Nervous About Rally

The most vocal optimists are getting skeptical of the never-ending stock rally.

What once seemed sensible is starting to baffle even them. The S&P 500 is up 39% in 50 days and in the midst of its longest winning streak since February. A flattening virus curve, Federal Reserve stimulus and reopening plans explain a lot of it, they say. But with $7 trillion in value created and the Nasdaq 100 near a record, many big bulls are sounding distinctly…bearish.

The S&P 500 rose 1% as of 12:15 in New York. Here’s what a few investors who believed in the rally now have to say:

Stranger Things

Peter Tchir’s bullish pronouncements amid the recent rebound have largely borne out. But for the head of macro strategy at Academy Securities, explaining why stocks keep going up is getting harder. Though the S&P 500 hasn’t yet breached 3,200 — Tchir’s near-term target for the index, which he raised from 3,000 just last week — he’s considering throwing in the towel nonetheless. His list of concerns include the escalating tiff between the U.S. and China, which is likely to escalate, the likely arc of of re-openings, and diminishing prospects for new stimulus. Tchir remains bullish but is reducing risk, he said on Wednesday.

“Normally I’m right there alongside whoever suggested tequila shots at midnight, but today, I’m going to quietly grab my jacket and leave before anyone notices I’m gone,” he wrote in a note. “Today has that feeling in the market. Bears capitulating left, right and center. I am not going to be fully short, but I am strongly in favor of reducing risk positions across equities and credit.”

Aggressive Assumptions

The market’s rally has been surprising but not unthinkable considering the fiscal and monetary measures already unleashed. But stocks have yet to start discounting what’s turning out to be a long list of worries, says Ralph Bassett, head of U.S. equities at Aberdeen Standard Investments, which has about $644.5 billion under management. Exogenous shocks, including a potential second wave of infections, could pose risks. His team is looking at tweaking their allocations but it’s proving difficult: sectors that could benefit coming out of a recession have already gotten expensive, he said in a phone interview.

“It just feels like markets aren’t discounting in risks to the downside at this stage — at least to a meaningful degree,” he said. “You can certainly justify a lot of the rebound, particularly in cyclical stocks, but the assumptions to get there are aggressive in our view.”

Burgeoning Skepticism

Three days before the stock market bottom on March 23, Pacific Life Fund Advisors upped its exposure to risk. The Newport Beach-based money manager has remained optimistic since, but is now growing dubious.

According to Max Gokhman, Pacific Life Fund Advisors’ head of asset allocation, the firm’s “burgeoning skepticism” is a function of two developments. First, while economic indicators including jobless claims and PMIs are indeed improving, they aren’t accelerating at a rate that would back a V-shaped recovery. Also, new negative catalysts have emerged, from riots to U.S.-China tensions.

“Investor’s favorite horror franchise of the last two years is back — Trade Wars: Return of the Tweet,” said Gokhman. “We start to see asymmetric risks to the downside with the S&P above 3,200, or just 200 points off its all-time highs.”

Turning Down the Dial

If bullishness could be mapped out on a scale from one to 10, Neil Dutta just turned down the dial from an 8 to a 7 — or maybe a 6, he said. It’s not a drastic downgrade to his outlook but the head of economics at Renaissance Macro Research says the risks have ticked up a bit in recent days.

To Dutta, the mass protests and gatherings happening around the country heighten the potential for an increase in coronavirus cases, which, in turn, could complicate plans for re-openings. Sure, stocks are going up right now, making everyone feel better, he said, but “we had been thinking we’d open up nicely in the third quarter and that potentially puts that in doubt.”

Dutta added that it’s too early to tell whether protests will cause another wave of infections — and that there are still plenty of things to be upbeat about, including positive trends in housing data as well as an easing in global conditions, particularly in Europe.

— With assistance by Claire Ballentine

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Stock futures rise as traders wait for report on private-sector employment

Stock market sectors that could survive coronavirus

CFRA Chief Investment Strategist Sam Stovall discusses economic recovery amid coronavirus and the sectors that are moving higher as investors actively await a turnaround.

U.S. equity futures are pointing to gains for a fourth day as Wall Street waits for the first of this week's job-related reports.

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The major futures indexes are indicating a gain of 0.6 percent when trading begins on Wednesday.

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The ADP report on private sector hiring will be released before the opening bell, the first of three major job-related reports coming out this week.

Private-sector employment for May is expected to plunge by 9 million, an improvement from the record 20.236 million jobs lost in April.

GOLDMAN SACHS TAPERS CALL FOR STOCK-MARKET DROP

The report on weekly jobless claims will be released on Thursday and the monthly employment report for May will be released by the government on Friday.

In Asian markets on Wednesday, Japan's benchmark Nikkei gained 1.3 percent, Hong Kong's Hang Seng was up 1.2 percent and China's Shanghai Composite added 0.1 percent.

In Europe, London's FTSE added 0.9 percent, Germany's DAX gained 1.5 percent and France's CAC rose 1.4 percent.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 25742.65 +267.63 +1.05%
SP500 S&P 500 3080.82 +25.09 +0.82%
I:COMP NASDAQ COMPOSITE INDEX 9608.374705 +56.33 +0.59%

On Wall Street, the S&P 500 closed 0.8 percent higher, the Dow Jones Industrial Average rose 1.1 percent and the Nasdaq composite added 0.6 percent.

Benchmark U.S. crude added 85 cents to $37.67 a barrel. It rose $1.37 to $36.81 a barrel on Tuesday. Brent crude oil for August delivery gained 69 cents to $40.26 a barrel.

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Investors will also have their eye on a couple of companies set to go public this week. Music company Warner Music Group is set to hold its IPO on Wednesday, while business information services company ZoomInfo Technologies is scheduled to go public on Thursday.

The Associated Press contributed to this article.

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The Buy-Side Trader Is Getting Outsourced in Coronavirus Crisis

A once-in-century disruption to securities trading is intensifying a revolution in how some investment firms conduct business.

With at-home traders navigating the wildest market swings in history, more money managers are tapping outsourcing companies to buy and sell financial assets on their behalf. With their employees at risk of falling sick or losing regular access to market venues, the buy side in lockdown is turning to a booming industry that’s drawing big-gun entrants including State Street Corp., AllianceBernstein Holding LP and Wells Fargo & Co.

In so doing, the largest providers are reporting a surge in revenues as transaction volumes jump and new clients sign up.

Outsourced traders essentially act as a middleman between the buy side and sell side in handling trading flows. Some outsourced trading divisions are run inside bigger financial services firms, like Jefferies Financial Group Inc., while others operate as small, standalone shops. Their pitch to asset managers: Ensuring best execution with an extensive network of brokerages and high-speed technology, which can be expensive for smaller funds to maintain on their own.

20,007 in U.S.Most new cases today

-11% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​073 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-4.​8% Global GDP Tracker (annualized), April


“We’ve seen folks add our outsourced trading team just to be able to say that they have systems in place and a set-up in place should their traders get sick with Covid,” said Bobby Croswell, head of U.S. outsourced trading at Cowen Inc. The firm’s outsourcing revenue more than doubled in the first quarter compared with the same period in 2019.

As the pandemic unleashes unprecedented operational risks, asset managers are joining peers who have flocked to these services in recent years to keep up with new technologies and to cut costs -- while liquidity gets ever-more fragmented.

Among the more established names, Outset Global LLP says its client list has grown 45% in the year through April. Tora Trading Services Ltd. says sales increased 105% in the first three months of the year from the prior period, as existing clients expanded usage and new ones signed on. Tourmaline Partners LLC, an outsourcing firm based in Stamford, Connecticut, just clinched a majority investment from a private equity firm that will help expansion plans.

Read More: The Buy-Side Trader Is Latest Job to Be Outsourced as Costs Rise

While some smaller funds opt to outsource entirely, many larger managers use such services to supplement their own operations, like buying and selling Asian stocks when their traders in New York are asleep.

Unlike agency or prime broking, outsourced players conduct relationships with the sell side on behalf of the client and offer more comprehensive services including monitoring exposures and providing market color.

“It does appear there has been increased interest in outsourced trading,” said Shane Swanson, an analyst at consultancy Greenwich Associates. “That does go hand-in-hand with the explosion in technology we’ve seen across the past 10, 15 years -- in particular in how that has been utilized as part of this response to the Covid crisis.”

He calls the recent turmoil a “proof of concept” for outsourcing for a host of new managers.

In a sign of the growing demand, larger financial firms including Cantor Fitzgerald LP and Jefferies have expanded their industry offerings over the past year.

Octavio Marenzi, co-founder of consultancy Opimas, suspects that the boom will ease as the buy side adapts to working from home, but the long-term pressure to cut costs is still in favor of the business. Opimas has estimated that a fifth of investment managers overseeing more than $50 billion will outsource at least parts of their trading by 2022.

“Global equity trading is a bit like a melting ice cube; it’s structurally challenged and will remain that way,” said Raymond McCabe, the London-based founder of Outset Global. “To have your own trader depending on what size you are or how you trade is, for some, a luxury.”

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Stocks turn higher after weekend riots, China cuts US ag purchases

Grasso: NYSE protecting people while giving them access to money

Former NYSE Chairman Richard Grasso on the New York Stock Exchange floor closing due to the coronavirus.

U.S. equity markets were higher Monday after riots over the weekend left a trail of destruction across America and China ordered state-run companies to stop the purchases of some U.S. products.

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The Dow Jones Industrial Average gained nearly 50 points, or 0.18 percent, after falling by as many as 162 points in the opening minutes of trading. The S&P 500 and the Nasdaq Composite were higher by 0.17 percent and 0.34 percent, respectively.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 25460.86 +77.75 +0.31%
SP500 S&P 500 3048.17 +3.86 +0.13%
I:COMP NASDAQ COMPOSITE INDEX 9524.570862 +34.70 +0.37%

Riots erupted across the country over the weekend, causing the deployment of 5,000 National Guard members in at least 15 states. The reinforcements were unable to prevent rioters from destroying property, setting fires and looting stores nationwide.

Meanwhile, China on Monday ordered state-run agriculture buyers to temporarily halt purchases of U.S. products including soybeans and pork, according to a Bloomberg report confirmed by FOX Business.

The decision, which puts the partial trade agreement in jeopardy, comes after President Trump on Friday ordered his administration to punish Beijing for passing a national security bill that bypassed Hong Kong’s legislature, effectively ending the “one country, two systems” governing principle that was guaranteed for the 50 years following Great Britain’s 1997 handover to China.

The major averages trimmed their early losses after the May reading of ISM Manufacturing climbed to 43.1 from last month's 41.5. Wall Street analysts surveyed by Refinitiv were expecting a reading of 43.6.

Retailers were in focus after a weekend of looting swept stores in major shopping areas across the country. Target, Walmart and Nike are among the companies that have temporarily shuttered locations due to the violence.

Ticker Security Last Change Change %
TGT TARGET CORP. 119.98 -2.35 -1.92%
WMT WALMART INC. 122.94 -1.12 -0.90%
NKE NIKE INC. 99.25 +0.67 +0.68%

Gun-related names also garnered attention amid the riots with gun makers Sturm, Ruger & Co. and Olin Corp., ammunition maker Vista Outdoor and police body cam and Taser stun gun maker Axon Enterprise all seeing gains.

Ticker Security Last Change Change %
RGR STURM RUGER 65.00 +2.66 +4.27%
OLN OLIN CORP 12.67 +0.64 +5.32%
VSTO VISTA OUTDOOR INC 10.95 +1.24 +12.77%
AAXN AXON ENTERPRISE 89.95 +13.99 +18.42%

Elsewhere, drugmaker Eli Lily dosed patients in a phase one study of its potential COVID-19 antibody treatment. Rival Gilead Sciences said its phase three study of experimental COVID-19 treatment remdesivir showed promise in five- and 10-day treatment groups.

Ticker Security Last Change Change %
LLY ELI LILLY & COMPANY 152.63 -0.32 -0.21%
GILD GILEAD SCIENCES INC. 74.78 -3.04 -3.91%

Coty shares soared after the beauty products maker reached a deal to sell a 60 percent stake in its hair business to private-equity firm KKR for $2.5 billion in net cash and a $1 billion direct investment.

Ticker Security Last Change Change %
COTY COTY INC. 4.39 +0.76 +20.93%

West Texas Intermediate crude fell 2.56 percent to $34.58 a barrel while gold slipped 0.52 percent to $1,743 an ounce.

U.S. Treasurys slid, running the yield on the 10-year note up by 2.5 basis points to 0.669 percent.

In Europe, France’s CAC was higher by 1.26 percent while Britain’s FTSE advanced 1.23 percent. Germany’s DAX was closed for a holiday.

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Hong Kong’s Hang Seng paced the advance in Asia, climbing 3.36 percent, while China’s Shanghai Composite and Japan’s Nikkei gained 2.21 percent and 0.84 percent, respectively.

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Lowe's CEO responds to George Floyd killing as 'father of a young black male'

Former NYSE CEO: Riots will delay economic recovery from coronavirus

Former NYSE chairman and CEO Dick Grasso argues protests over George Floyd’s death will impact economic recovery from coronavirus and Chinese companies must meet accounting standards to be listed on U.S. exchanges

Lowe's president and CEO Marvin Ellison shared his response to the death of George Floyd from his perspective "as the father of a young black male."

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LOOTERS WHO SNAG IPHONES LIKELY WON'T BE ABLE TO USE THEM

"My wife [and] I feel tremendous sadness as our hearts [and] prayers are with the families of George Floyd, Ahmaud Arbery, Breonna Taylor [and] all communities ripped apart by violence," Ellison wrote on Twitter. "As the father of a young black male, I can only imagine their pain [and] emptiness."

He also shared the message he sent to employees that Lowe's "is a company with zero tolerance for racism, discrimination, hate, insensitive behavior or violence of any kind."

Ellison has led Lowe's since 2018.

Ticker Security Last Change Change %
LOW LOWE’S COMPANIES INC. 129.14 -1.21 -0.93%

Lowe's locations didn't escape the looting that affected other retailers, including Target and CVS throughout the country. A Lowe's in West Philadelphia was looted on Sunday night, The Philadelphia Inquirer reported.

Protesters demonstrate in front of Dallas City Hall in downtown Dallas, Saturday, May 30, 2020. (AP Photo/LM Otero)

Merck CEO Kenneth Frazier, who is black, spoke about the barriers that black Americans face in a CNBC interview on Monday.

"What the African American community sees in that video tape… is that that African American man — it could be me… is being treated as less than human," Frazier said according to CNBC's Meg Tirrell.

Former Minneapolis Police Officer Derek Chauvin was fired after video emerged showing him detaining Floyd and kneeling on Floyd's neck. Chauvin was charged with third-degree murder and second-degree manslaughter after protests that began in Minneapolis and spread throughout the country.

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Three other officers are in a video of the incident.

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Hong Kong Stocks Rally After Trump Holds Fire on Retaliation

Hong Kong stocks rose, with the benchmark index capping its best day in more than two months, on speculation the U.S. administration won’t take extreme steps in response to China’s crackdown on the city.

The Hang Seng Index closed 3.4% higher, led by real estate firms, after falling almost 7% last month. Shares on the mainland also climbed, with the CSI 300 Index advancing 2.7%. News that China is halting some U.S. farm imports tempered the optimism late in the day, sending the offshore yuan down 0.2%.

While the U.S. President Donald Trump’s speech Friday was heated in rhetoric, it lacked specifics around measures that would directly impact the city. 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.

“Trump’s comments gave no immediate measures on Hong Kong and leave room for negotiations with Beijing,” said Castor Pang, head of research at Core Pacific-Yamaichi International. “Trump’s comments have eased investors’ concern about the impact of potential sanctions on the Hong Kong economy.”

Traders had increased their hedges at the end of last week due to concern over what Trump might announced in his speech. Short selling volume on Hong Kong’s main board climbed to 21% of total turnover Friday, the highest proportion in data going back more than two decades.

Sun Hung Kai Properties Ltd. surged the most since September, adding 6.1% while Swire Pacific Ltd. jumped 6%. Elsewhere, Sino Biopharmaceutical Ltd. rose 6.7%. The MSCI Hong Kong Index rose 4%.

The Hang Seng Index is trading below its price-to-book value, near a record low, after being pummeled by concern over the health of the economy, U.S.-China ties and the city’s future as a financial center. The measure’s drop in May was the biggest relative to the MSCI All-Country World Index since the Asian financial crisis in 1998.

The offshore yuan last traded at 7.1437 per dollar. Chinese government officials told major state-run agricultural companies to pause purchases of some American farm goods including soybeans as Beijing evaluates the ongoing escalation of tensions with the U.S. over Hong Kong, according to people familiar with the situation.

— With assistance by Ken Wang

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Russian Health Ministry Approves Anti-Coronavirus Drug Avifavir

Russia’s Health Ministry granted a temporary registration certificate to the country’s first Covid-19 medicine, a generic version of the Japanese flu drug Avigan, the country’s wealth fund said in statement.

As the coronavirus continues to spread, upending economies and life around the world, drug companies have been racing to develop treatments and vaccines. Avifavir, developed by a joint venture of the Russian Direct Investment Fund and ChemRar Group, is designed to disrupt the novel coronavirus’s ability to reproduce and has proven effective in clinical trials.

While an international researcher of the drug has sounded a note of caution — joining scientists around the world who have tried to manage expectations of new treatments until they’ve been thoroughly tested — the head of the wealth fund said it was a potential breakthrough.

“Avifavir is not only the first antiviral drug registered against coronavirus in Russia, but it is also perhaps the most promising antiCovid-19 drug in the world,” Kirill Dmitriev, CEO of the Russian Direct Investment Fund, said in the statement late Saturday. “It was developed and tested in clinical trials in Russia in an unprecedentedly short period of time, enabling Avifavir to become the first registered drug based on Favipiravir in the world.”

Avifavir is a generic version of Fujifilm Holdings Corp.’s Avigan, which in a non-randomized Chinese study in March resulted in the faster clearance of the virus than when using an anti-HIV drug. Companies around the world are considering producing it, with Glenmark Pharmaceuticals currently conducting Phase 3 clinical trials in India that might be completed as early as July.

Yohei Doi, the lead researcher on a trial of the Japanese antiviral Avigan to treat Covid-19, said it’s too early to make a call on whether the drug works or not, and patients are still being enrolled.

Russia has recorded the world’s third-highest number of Covid-19 infection cases, according to Johns Hopkins University’s research center. Russian cases exceeded 405,000 on Sunday, while the reported death toll remains relatively low among some of the world’s largest countries, at 4,693.

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Trump announces new actions against China over Hong Kong, coronavirus

Trump: China’s actions against Hong Kong are a ‘tragedy’

President Trump vows he will protect America’s financial security from China and says Hong Kong has been mistreated by the Chinese government.

President Trump announced new actions against China on Friday related to the passage of a new Chinese security law that weakens Hong Kong’s autonomy, calling it a treaty violation.

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The president said the U.S. will crack down on Chinese companies listed on American exchanges. He directed the Presidential Working Group on Financial Markets to examine the practices of those businesses.

“Investing firms should not be subjecting their clients to the hidden and undue risks associated with financing Chinese companies that do not play by the same rules,” Trump said. “Americans are entitled to fairness and transparency.”

President Donald Trump speaks in the Rose Garden of the White House, Friday, May 29, 2020, in Washington. (AP Photo/Alex Brandon)

STOCKS SLIP AS TRUMP PUTS CHINA ON ALERT

The U.S. is also revising its travel advisory for Hong Kong, warning that Americans could be spied on or arrested by the Chinese government, Trump said. And Chinese and Hong Kong city officials could face direct U.S. sanctions for “smothering” Hong Kong’s freedom.

Hong Kong has been an autonomous Chinese territory since 1997 when the U.K. returned its former colony via a treaty. The city was to remain an autonomous city for 50 years governed differently than mainland China under a “one country, two systems” deal, per that treaty.

The U.S. and other countries granted favorable treatment to Hong Kong as a result, helping it grow into a major financial hub. Hong Kong was the U.S.'s 10th largest goods export market in 2018. There were 1,300 American companies with business operations in Hong Kong, with $82.5 billion in U.S. foreign direct investment. American-Hong Kong trade was estimated at $66.9 billion that year, according to the U.S. Trade Representative’s Office.

A man wearing a protective face mask walks past a Chinese national flag on a street in Hong Kong. (AP Photo/Vincent Yu)

US-CHINA TENSIONS MAY POSE RISK TO CHINESE GRAD STUDENTS

"Hong Kong is no longer sufficiently autonomous to warrant the special treatment that we have afforded the territory since the handover," Trump said. "China has replaced its promised formula of 'one country, two systems' with 'one country, one system.'"

The move by Chinese officials to exert greater control over Hong Kong has also prompted a new wave of protests in the city.

Protesters march on a road in Mongkok, Hong Kong, Wednesday, May 27, 2020. (AP Photo/Kin Cheung)

TRUMP SIGNALS CHINA-US TRADE DEAL IN CROSSHAIRS AS TENSIONS RISE

Hong Kong residents stand to lose significant civil liberties under closer Chinese rule, according to critics of the new law. Several pro-democracy advocates in Hong Kong have reportedly already been arrested.

“This is a tragedy for the people of Hong Kong, the people of China, and indeed the people of the world,” Trump said.

Trump also announced the U.S. is “terminating” its relationship with the World Health Organization, blaming it on a disparity in funding paid by the U.S. and China, as well as the spread of the coronavirus.

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“Chinese officials ignored their reporting obligation to the World Health Organization,” he said.

The funds the U.S. normally pays to the WHO – more than $450 million last year – will instead be directed to other public health groups, according to Trump.

More than 1 million people have died from COVID-19, including more than 100,000 in the U.S. Trump blamed Chinese officials for the virus’s spread.

“The world is now suffering as a result of the malfeasance of the Chinese government,” he said.

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Check back for more on this developing story.

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