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Coronavirus latest: Sydney's lockdown extended by four weeks as cases rise

Coronavirus latest: Sydney's lockdown extended by four weeks as cases rise

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Norfolk Southern’s revenue and income rose strongly in the second quarter as the US rail operator was boosted by the easing of Covid-19 restrictions.

Net income at the company, which runs 19,300 route miles in 22 states, jumped to $819m in the second quarter, up from $392m in the same period last year.

Railway operating revenues increased by 34 per cent from the second quarter of 2020 to $2.8bn. The jump was the result of a 25 per cent increase in volumes and a 7 per cent increase in revenue per unit. Adjusted earnings per share also climbed to $3.28 from $1.53.

The results beat analysts’ revenue expectations of $2.75bn and adjusted earnings per share expectations of $2.96, according to Refinitiv.

McDonald’s reported quarterly sales that rose above pre-pandemic levels, as demand for chicken sandwiches and a promotion with K-pop group BTS helped the burger chain cook up strong growth in the US.

The US fast-food group said on Wednesday that the results reflected an acceleration in the business from the first quarter, overcoming a surge in Covid-19 infections that prompted the return of dining restrictions in some markets.

Sales at McDonald’s restaurants open for at least a year rose 40.5 per cent year on year in the second quarter, or 6.9 per cent compared with the same period in 2019.

In the US, comparable sales were up 25.9 per cent from the year before and 14.9 per cent on a two-year basis, boosted by larger order sizes, menu price increases and growth in delivery and digital platforms.

McDonald’s said US customers showed an appetite for its crispy chicken sandwiches and BTS “famous order” meals, which includes chicken nuggets and two dipping sauces inspired by recipes from the chain’s South Korean restaurants.

Both of the company’s two global segments recorded moderate sales growth versus 2019. Meanwhile, growth in the UK and France drove a 75 per cent year-on-year increase in comparable sales for international operated markets amid the easing of coronavirus restrictions. International developmental licensed markets posted a 32 per cent rise on gains in Brazil, Japan and China.

Restaurant chains such as Chipotle and Starbucks have reported strong sales this year. Nearly every corner of the US has eliminated pandemic-era curbs such as limitations on dine-in capacity, and lower levels of Covid-19 cases encouraged people to eat out more during the second quarter. Chipotle last week predicted strong sales in the third quarter, after higher menu prices helped bolster profits amid inflationary pressure in commodities and freight.

McDonald’s net income rose to $2.2bn in the three months to the end of June, up from $484m a year earlier. Adjusted earnings per share came in at $2.37, beating analysts’ estimate of $2.11.

Shares in McDonald’s, which are up about 15 per cent this year, ticked 0.4 per cent lower in pre-market trading.

The UK will this week deliver the first batch from the 100m Covid-19 vaccines Prime Minister Boris Johnson has pledged to send to poorer countries by the middle of next year.

The Covax scheme, which aims to support mainly middle and lower-income nations, will receive 5m doses of the Oxford/AstraZeneca vaccine, with another 4m shared directly with countries in need.

Indonesia will receive 600,000 doses, 300,000 will be sent to Jamaica and 817,000 will go to Kenya “among other countries”, the Foreign Office said on Wednesday.

“We’re doing this to help the most vulnerable, but also because we know we won’t be safe until everyone is safe,” said foreign secretary Dominic Raab.

The World Health Organization-backed Covax scheme has so far shipped 158m doses of vaccine, despite hoping to deliver 2bn by the end of the year.

Quarterly sales at ecommerce company Shopify have surpassed $1bn for the first time, rising 57 per cent year on year as a strong earnings season for the tech sector continues.

Shopify’s $1.1bn in revenue came in ahead of Wall Street’s forecasts, but nonetheless represented a slowdown from the 110 per cent revenue growth the company reported in the first quarter.

“We continue to expect to increase revenue rapidly in 2021, but at a lower rate than in 2020,” Shopify said, as consumers spend more money in restaurants and bars and return to offline stores.

Consumers spent $42.2bn with retailers that use Shopify’s technology to run their online stores and process payments in the second quarter, up 40 per cent over the same period last year when lockdowns had fuelled a massive 119 per cent rise in gross merchandise volume.

Shopify’s shares, which were already up by more than 40 per cent in the year to date, rose by another 3 per cent in pre-market trading as it reported a huge jump in net income to $879.1m, from $36m a year ago.

The profit increase was driven largely by an unrealised gain in the value of unspecified equity investments that Shopify had made in partners such as Stripe and Affirm. But even without this, its net income would still have more than tripled year on year to $101m.

In its outlook, Shopify said that revenues were higher and expenses lower than it had previously expected.

Boeing plans to cut 10,000 fewer jobs than it forecast during the depths of the coronavirus pandemic as the market’s recovery accelerates.

The US aircraft manufacturer is at present hovering with around 140,000 employees and expects to stay at that level.

Boeing had said in October that it aimed to reduce staff from 160,000 to 130,000 through lay-offs, voluntary departures and attrition, as the Covid-19 crisis and travel restrictions devastated airlines’ demand for new jets.

“We’re now seeing more stability in our staffing levels, as the commercial market recovery accelerates, our defence and government services business target growth opportunities, and we increase investments to further strengthen engineering,” chief executive David Calhoun said on Wednesday in a memo to employees.

He added that the pace of the commercial market’s recovery, as well as trade relations with China and Boeing’s financial performance, would be the main factors in determining future employment levels.

GlaxoSmithKline has beaten earnings and revenue expectations on the back of strong sales in its vaccine business, bolstering chief executive Emma Walmsley’s case that she can transform the UK drugmaker.

The pharmaceutical company reported second-quarter revenue of £8.1bn — above the average analyst estimate of £7.6bn — up 6 per cent year on year, or 15 per cent on a constant currency basis. Sales of its meningitis vaccine soared 46 per cent and established vaccines such as those for hepatitis and diphtheria rose 28 per cent, as demand rebounded from the disruption of the coronavirus pandemic.

GSK reported adjusted earnings per share of 28.8p, higher than the consensus forecast. Total operating profit was £1.7bn.

Walmsley said it was an “excellent performance” in the second quarter.

“We expect this positive momentum to continue through the second half of the year, driving us towards the better end of our earnings guidance range for 2021 and meaningful performance improvement in 2022,” she said.

Over 13m British people have skipped routine health check-ups in the past six months due to Covid-19 fears, according to insurance broker LifeSearch.

A survey conducted by the firm found four in 10 were still fearful of medical environments, despite growing confidence in the NHS. Just under half of all survey participants said they now felt more confident in the UK’s health service.

The research also revealed that almost a fifth of 18 to 24 year olds had switched to private healthcare in order to avoid NHS waiting times. Two thirds of people have had to wait longer to see a GP this year.

Pfizer has raised its full-year revenue projections for its coronavirus vaccine by nearly a third after the shot helped the drugmaker to almost double its sales in the second quarter.

The US group, which markets a widely used Covid-19 vaccine made with Germany’s BioNTech, upgraded its revenue forecast for the jab for 2021 to $33.5bn, from the $26bn it had predicted in the previous quarter.

Second-quarter sales rose 92 per cent to $18.98bn, while earnings per share climbed 58 per cent to 98 cents, the group said on Wednesday.

The company, which shares profits on sales of the Covid-19 jab evenly with BioNTech, has generated direct sales of $7.8bn from the vaccine.

A treatment for type-2 diabetes is set to be included in the world’s largest clinical trial of treatments for patients hospitalised with Covid-19.

The effects of empagliflozin, which has been found to help people with chronic kidney disease or heart failure, will be investigated in the University of Oxford’s Recovery trial.

The treatment works by reducing inflammation, improving heart and blood vessel function and increasing “blood oxygen transport”. Researchers think it could protect against organ damage and improve the chance of recovery for patients with Covid-19.

At least 2,500 patients in the trial, which has so far recruited 41,000 patients in the UK, Nepal and Indonesia, will be given empagliflozin on top of the usual treatment to assess whether it reduces Covid-19 mortality rates.

“I’m delighted that we are adding empagliflozin, since this will test a new treatment strategy using a class of drugs that are widely available and relatively inexpensive,” said Sir Peter Hornby, co-chief investigator of the Recovery trial.

Spotify blamed the pandemic on slowing user growth in the second quarter, warning that it had to pause marketing campaigns in some regions due to the “severity” of Covid-19.

The audio streaming service hit 365m monthly active users at the end of June, below its guidance for between 366m and 373m. Paying subscribers climbed to 165m, at the high end of forecasts.

The Swedish group, like Netflix, added record subscribers last year as the pandemic kept people at home seeking entertainment. However the company has issued conservative guidance for 2021, warning that it faced “substantial uncertainty” surrounding the Covid-19 crisis.

User growth was slower than expected but the Stockholm-based company is “seeing that trendline reverse”, chief executive Daniel Ek told investors on Wednesday. “We are back on track,” he added.

Total revenue in the quarter was up 23 per cent from a year ago to €2.3bn, at the high end of forecasts.

Smurfit Kappa, Europe’s largest cardboard box maker, has eliminated shifts at its factories because workers are self-isolating, despite surging demand for paper-based packaging to meet the sustained surge in online shopping.

Tony Smurfit, chief executive of the FTSE 100 group, said on Wednesday that he feared the labour shortages would deepen as the industry starts gearing up from September to meet demand for Christmas.

“We’ve had to close down shifts. Thankfully our customers are also affected so our loss of production and availability of production hasn’t killed us,” he said in an interview with the Financial Times. “I think they’ll get worse. We’re going into the busy period of the year.”

He said the company was not willing to go through the paperwork required to release workers who have been told to self-isolate. “We have exemptions but it’s a lot of bureaucracy to unping people.”

A shortage of truck drivers was affecting the company’s ability to manage its supply chain, he added, and he became the latest executive to call on the UK government to offer short-term visas to hauliers based in the EU.

“I think there’s going to be even more problems unless they let drivers come into the UK,” he said.

Half of people living with a disability in the UK have found it difficult to pay for their usual living expenses during the pandemic, while two-thirds reported struggling to manage their own care, a government survey has found.

More than 16,000 people, 74 per cent of whom have a disability and 18 per cent of whom are carers, were questioned during the first half of the year about how the coronavirus crisis had affected their lives.

More than eight in 10 carers said that all the work they did was unpaid, while 86 per cent said it was difficult to provide support during the pandemic, from 65 per cent before the crisis struck.

A separate survey, also published on Wednesday, found that the coronavirus pandemic had “magnified” social inequalities and injustices experienced by people living with disabilities.

Chief among the complaints was a lack of clear government guidance: “Participants generally felt confused about Covid-19 rules, and the support and information available to them during the pandemic,” the researchers said.

Most of nine respondents interviewed by Policy Lab between July and September last year said Covid-19 had made it harder for them to access healthcare services. Almost all said they felt stigmatised for not wearing a mask, while others experienced loneliness due to extended periods of self-isolation.

Reinsurance group Scor took another €377m hit from the Covid-19 pandemic in the first half, some way above expectations, as business interruption and mortality claims continued to rise.

Scor took €268m of Covid-related losses in its life insurance business, mostly due to mortality claims in the US. But analysts were surprised by an extra €109m of pandemic-linked claims booked in Scor’s property and casualty business, mostly for business interruption.

The reinsurer pointed to “adverse court decisions” in France and the UK, where businesses continue to pursue Covid payouts in court, and insurers filing claims to it for separate pandemic lockdowns.

That gave the division a net combined ratio — claims and expenses as a proportion of premiums — for the second quarter of just above 97 per cent, a profitable level but weaker than the 94 per cent expected by analysts. Scor’s shares dipped in morning trading, against a flat market for European stocks.

At the statutory profit level, the Covid effects were offset by a big one-off boost after the company resolved a bitter legal dispute with rival Covéa. The two companies buried the hatchet last month, and the settlement meant a one-off gain of €311m in Scor’s second-quarter net income of €335m, against a consensus expectation of €126m.

ITV has called on the UK government to exempt some television workers from self-isolation rules as the “pingdemic” disrupts production.

Carolyn McCall, chief executive, said ITV had been talking to the Department for Digital, Culture, Media and Sport about an exemption for “certain aspects” of television on the grounds that broadcasters have a public service remit, including to provide news coverage. “We do some vital services,” she said.

Companies in sectors from retail to manufacturing have been plagued with labour problems as employees who have been in contact with someone with coronavirus are contacted or “pinged” by NHS Test and Trace and told to quarantine for 10 days. Some “critical” workers, including in emergency services and transport, have been exempted.

While there was no risk for now that TV shows would come off air, McCall added: “You have people on set, you’ve got crew and cast, and you don’t want to lose anyone to isolation.

“I would be lying if I said it was not a difficult situation from a production point of view because clearly it is,” she told reporters at the company’s results briefing on Wednesday. “It is a worry, but so far we’re managing it.”

The DCMS was “considering” the matter but there was unlikely to be a decision before mid-August, she said.

Removing quarantine rules on EU and US tourists is “reckless” following the spread of the Delta variant, a leading UK politician has said.

The UK government is expected to remove travel restrictions for double vaccinated travellers from the EU and the US on Wednesday.

However, the deputy leader of the opposition Labour party attacked the proposed move.

“Everybody wants to go on holiday and get back to normal as quickly as possible, but this is reckless,” Angela Rayner told Sky News on Wednesday.

“We know that the Delta variant came into this country and delayed the lifting of some of the restrictions,” she said. “We need to make sure that we’ve got proper data-driven analysis and that we look at an international passport for vaccines.”

Rio Tinto, the world’s biggest iron ore producer, has reported record half-year profits that topped its total for all of 2020 as the price of its key commodity hit an all-time high on the back of booming demand from China.

The strong earnings growth enabled the Anglo-Australian company to reward its shareholders with the biggest half-year payout in its history — dividends of $9.1bn, or $5.61 a share.

The profits and dividend highlight the huge amounts of cash being generated by the mining industry, which has been one of the biggest beneficiaries of China’s rapid economic recovery from the coronavirus pandemic and huge stimulus packages announced by governments worldwide.

Rio’s peers, which include Anglo American, BHP, Glencore and Vale, are also expected to deliver blockbuster results and cash returns when they report over the next month. 

Based on production and commodity price forecasts, PwC expects the world’s top 40 miners to record after-tax profits of $118bn in 2021, up 68 per cent from the previous year.

Read more here.

Profits at Barclays rebounded in the second quarter as an improving economic outlook allowed the UK bank to cut the amount set aside to cover coronavirus-related loan losses.

The bank reported net income of £2.1bn, up from £90m in the same period last year and easily beating analysts’ expectations of £1.4bn. Revenues for the period rose 1 per cent to £5.4bn, slightly more than the £5.3bn estimate.

The outperformance was mainly down to a larger than forecast release of provisions built up last year to cover potential loan losses as the coronavirus pandemic swept the UK. The bank on Wednesday said it had cut those provisions by £797m, reflecting an improved outlook for its consumer operations.

Jes Staley, Barclays chief executive, said the move demonstrated an “improved macroeconomic outlook and benign credit environment”. In the same period last year, the lender took £1.6bn of loan impairment charges.

Staley also announced a £500m share buyback programme after a ban on payouts was lifted by the Bank of England earlier this month.

Read more here.

The number of UK companies in significant financial distress has fallen from a record high earlier in the year, with the hospitality, leisure and retail sectors boosted by the gradual reopening of the economy from Covid-19 lockdown measures.

The number of companies reporting financial difficulties fell by 10 per cent to 650,000 in the second quarter compared with the first three months of 2021, according to Begbies Traynor.

The insolvency specialist’s red flag alert, which has measured the health of small and medium-sized companies across the UK since 2004, said that some had been able to pay down debt as coronavirus restrictions were lifted and business returned.

It warned, however, that real estate and construction, financial services, and travel and tourism sectors all reported a rise in the number of businesses in distress. Despite the improvement in the second quarter, the number of businesses facing financial difficulties remains 24 per cent higher than during the same period last year.

Ric Traynor, executive chair at Begbies Traynor, cautioned that “businesses still have a very long way to go before they can return to a sound financial footing, with many facing a legacy problem of managing significant debt for many years to come”.

Many companies were struggling with high demand and shortages of materials and staff, he added. “Hidden risks abound for UK businesses and all represent a real threat to corporate survival in the short term.”

Wizz Air expects to return to near pre-pandemic levels of flying by the end of the summer as European demand for travel returns.

The low-cost carrier on Wednesday said it planned to operate 100 per cent of its pre-pandemic flight schedule in August, up from an expected 90 per cent this month.

“We have now entered a busy part of the summer, ramping up our operations to meet increased demand,” chief executive József Váradi said.

Aircraft are returning to the skies across Europe in significant numbers as border restrictions ease, and easyJet and Ryanair have also laid out plans to increase their flight schedules.

But, while confidence is returning to the industry, Varadi said Wizz was maintaining “operational flexibility” in case travel restrictions change again.

“We remain cautious with making predictions for the winter period amid unpredictable government decision making,” he added.

Wizz flew 33 per cent of its normal schedules in the three months to the end of June, and posted a net loss of €118.7m over the period.

Shareholders on Tuesday backed a board plan to pay Varadi up to £100m if Wizz’s shares rise by about two-and-a-half times over the next five years, underlining the carrier’s ambitions to emerge strengthened from the pandemic.

ITV plans to reinstate its dividend after advertising revenues rebounded from the biggest drop in the UK broadcaster’s history, although shareholders will need to wait several more months for the payout.

Reporting a 27 per cent recovery in first-half revenues from the year ago period to £1.55bn, ITV said it would not pay an interim dividend but planned to make a final payout for the year “assuming the economy continues to recover”.

The UK’s biggest commercial free-to-air broadcaster scrapped its dividend a year ago when a freeze in ad budgets at the onset of the pandemic hit hard.

Advertising revenue improved 29 per cent in the six months to June 30, led by a 55 per cent jump on its video-on-demand platforms such as ITV Hub, the group said in its earnings statement on Wednesday. The summer had started well, ITV said, helped by the Euro 2020 football tournament and return of Love Island.

However, the easing of lockdown restrictions during the period encouraged more viewers to leave the house. Viewers watched 8.1bn hours of ITV in total during the period, a year-on-year decline of 6 per cent. Online viewing, however, improved 6 per cent and 34.6m users subscribed to ITV Hub.

Employer confidence in the UK has “shot upwards” to a five-year high as Covid-19 restrictions have eased but coronavirus-related staff shortages are likely to affect the figures.

Confidence from employers to hire new staff and make investment decisions improved in the three months to June, with a rise to 33. This was the highest level recorded in a survey from the Recruitment & Employment Confederation, which began in 2016.

Business confidence rose 6 percentage points to 17, the second rolling quarter of a positive score, said the organisation that represents the recruitment industry on Wednesday.

Growing confidence has led to more job adverts while recruiters are working harder to make the right hires, the REC’s head said.

But the Delta variant has sparked severe staff shortages as thousands isolate after coming into contact with someone infected with the coronavirus. Nearly 620,000 people in England and Wales were asked to quarantine in the week to July 14.

Many workers are hesitant to move jobs after an unpredictable 18 months.

“Businesses will have to think hard about their offer if they want to attract staff, not just in terms of pay but also benefits, working conditions and work-life balance,” said Kate Shoesmith, REC chief executive.

Hiring intentions for temporary workers rose 4 percentage points to 28 in the three months to June, the REC said.

Annual UK house price growth cooled in July after buyers rushed to take advantage of a tax break the previous month, but remained in double digits following a year of rapid increases.

Annual house price growth measured by the Nationwide house price index slowed to 10.5 per cent in July from 13.4 per cent the previous month, and seasonally-adjusted prices fell 0.5 per cent month on month, bringing the average price of a home to £244,229.

The fall followed a surge in activity in June, as buyers rushed to take advantage of the stamp duty holiday on property transactions, creating the biggest jump in the index since 2004.

The stamp duty holiday will now taper before ending completely in October, after a frenzied year of transactions that pushed house prices close to a record high relative to incomes.

Nationwide figures showed the “savings” from the tax break were in fact dwarfed by price increases. The price of a typical UK property increased by £24,500 between July 2020 and June 2021, while the stamp duty saving was £1,900.

Robert Gardner, Nationwide’s chief economist, said demand was likely to “remain solid” beyond the end of the holiday as borrowing costs remain low.

“This, combined with a lack of supply on the market, suggests continued support for house prices,” he said. “But, as we look toward the end of the year, the outlook is harder to foresee.”

Tokyo 2020 Olympics authorities reported 16 new positive tests for Covid-19 on Wednesday, including four visitors from abroad. None were athletes or residents in the Olympic village.

The positive tests included nine Japanese-resident contractors, one volunteer, four officials and two members of the foreign media. The cases take the total among those accredited for the Games to 174.

Tokyo 2020 has pointed to the low rate of positives in airport testing, at 0.08 per cent, and daily screening tests, at 0.02 per cent, as evidence that Olympic visitors are following precautions.

A number of athletes have also been forced to train in isolation because they came into proximity with someone who later tested positive.

Singapore has identified a new cluster of Covid-19 cases in a migrant worker dormitory, the south-east Asian city-state’s health authority has reported. 

The number of active clusters in Singapore jumped from 25 at the weekend to 39 on Tuesday, when four new outbreaks were announced.

The new cluster discovered in one of the city’s many worker dormitories — which last year were responsible for Singapore’s worst outbreak — includes nine cases. 

Singapore’s worst Covid-19 outbreak of 2020 occurred in its migrant worker dormitories
Singapore’s worst Covid-19 outbreak of 2020 occurred in its migrant worker dormitories © REUTERS

The number of new locally transmitted infections hit 967 in the past week, up from 642 a week earlier, the health ministry said. “We are likely to continue to see high number of cases in the coming days as we step up efforts to detect them to contain their spread in the community,” it added.

With 902 cases, the largest active cluster in Singapore is linked to an important fishing port that has been shut until the end of the month.

An infection group linked to karaoke lounges is Singapore’s second largest, counting 245 cases.

The writer is global chief investment strategist at the BlackRock Investment Institute

Market sentiment has been swinging between extremes: one day the concern is runaway inflation; the next, the gloomy prospect of a deflationary spiral.

That financial markets are struggling to find their footing should be no great surprise: the world’s worst pandemic for 100 years shut down much of the global economy for close to a year. As it restarts, the question markets are grappling with is: what comes next?

There are no case studies that provide anything close to a working hypothesis. So much in financial markets and global trade has changed since the 1918 influenza pandemic that there is little to be gleaned from that experience — beyond, perhaps, the influence of a similar psychological trauma on our behaviour.

The extraordinary fiscal and monetary response to Covid-19 in many economies also makes forecasting harder. For example, BlackRock estimates that the US has had more than four times the stimulus of the global financial crisis for less than one quarter of the shock: a more than 16-fold difference.

Read more here

Big Tech profits have surged to unexpected heights, even as the global economy has started to emerge from the coronavirus pandemic that gave a boost to the biggest technology companies last year.

Earnings announced by Apple, Alphabet and Microsoft on Tuesday showed that demand for digital services and gadgets has continued to soar, making tech the biggest beneficiaries of this year’s gradual recovery, just as it proved to be one of the most resilient sectors during the Covid-19 downturn.

The three US tech groups brought in combined after-tax profits of almost $5bn a week during the latest quarter. At $56.8bn, the total was almost double the year before and 30 per cent more than Wall Street had predicted.

The figures were “absolutely stunning”, said Jim Tierney, a portfolio manager at AllianceBernstein, adding that “digital advertising is just on fire”, as advertisers race to follow audiences who have turned to online services in huge numbers.

Read more here

LG Display is bracing for lower display panel prices in the second half of the year as economic reopening around the world damps demand for TVs and other electronic products.

The world’s second-largest electronic display maker swung to an operating profit in the second quarter on pandemic-induced demand for TVs and laptops, but its profit is expected to fall from the fourth quarter as people spend less time at home as many countries lift Covid-19 restrictions.

The South Korean company reported an operating profit of Won701bn ($607m) in the quarter to the end of June, compared with an operating loss of Won517bn a year earlier. Sales jumped 31 per cent to Won7tn.

“IT demand is likely to remain strong in the second half . . . but demand for small to mid-size TVs is falling,” a company executive told analysts after announcing the results. “We are preparing [for it], seeing a fall in LCD [liquid crystal display] prices as a possible scenario.”

The better than expected results come as South Korea struggles to contain the latest surge in coronavirus infections driven by the highly infectious Delta variant.

The country reported 1,896 new cases on Wednesday, its highest daily increase, as the virus spreads beyond the capital during the summer holidays. 

Australian authorities have extended Sydney’s lockdown for at least another four weeks, or until August 28 at the earliest, because of a worsening Covid-19 outbreak.

There were 177 new daily infections reported on Wednesday, the highest number recorded since the outbreak began in mid-June. At least 46 were considered infectious in the community — an important gauge that the government has said must fall close to zero before the lockdown of the nation’s most populous city can be lifted.

“We can’t open up and live freely unless we have the number [of people infectious in the community] close to zero or unless we have high rates of vaccination,” said Gladys Berejiklian, premier of New South Wales.

Sydney, a city of 5m people, was placed into a strict lockdown five weeks ago after an outbreak of the highly infectious Delta variant. This has forced most businesses and schools to close and brought construction work to a halt, with more than 2,000 active cases reported since mid-June.

A Sydney health official checks the temperature of a man at a Covid-19 vaccination centre on Tuesday
A Sydney health official checks the temperature of a man at a Covid-19 vaccination centre on Tuesday © AFP via Getty Images

Until last month, Australia had received international praise for its ability to suppress the spread of Covid-19 and limit deaths to less than 1,000 people during the pandemic. But a slow vaccine rollout — less than 15 per cent of the population have received jabs to date — has left the country vulnerable to outbreaks.

Authorities have said lockdowns will be required until a large proportion of the population is vaccinated, which is not expected until October at the earliest.

The state of Victoria lifted its fifth lockdown on Wednesday following an earlier outbreak in Melbourne.

More than 600m children in countries not on an academic break are still affected by school closures, the UN children’s fund said on Tuesday, with reports of teenage pregnancy and violence rising.

Speaking at a press conference in Geneva, Unicef spokesman James Elder said there had been “triple-digit increases” in calls to child helplines across all continents, which he called “a good precursor to understanding kids who are reporting violence”.

In Uganda among other countries, Elder added, the pandemic had led to a “20 per cent spike in the last 15 months in teen pregnancies”.

Unicef estimated that 40 per cent of all children aged five to 18 were currently out of school in eastern and southern Africa. In nearly half of countries in Asia and the Pacific region, schools had been closed for about 200 days, it said.

Latin America and the Caribbean have seen some of the longest closures with 18 countries and territories affected by either full or partial closures.

Elder said that if Unicef’s figures “did not resonate with those in power, then a World Bank report estimates a loss of $10tn in earnings over time” for the current generation of students.

Starbucks offered an upbeat sales outlook for the quarter ending in September, as Covid-19 vaccinations and the reopening of offices in the US send customers back into coffee shops.

Sales in the three months to the end of June hit a record $7.5bn, an increase of 78 per cent over the same period a year ago, which was hampered by coronavirus shutdowns. Comparable sales, which track revenues in locations open at least a year, were up 73 per cent. Both measures exceeded analysts’ forecasts.

Starbucks expects comparable sales to be 18-21 per cent higher year on year in its fiscal fourth quarter, higher than the 17.5 per cent increase that analysts predict.

Large restaurant chains have benefited as authorities relax limitations on travel and indoor dining, prompting more people to eat out again. Consumers’ growing preference for placing orders online, a trend fuelled by the pandemic, has also helped companies such as Starbucks, Chipotle and Domino’s Pizza to generate higher sales.

The company updated its full-year forecast to call for 20-21 per cent comparable sales growth, compared with a previous range of 18-23 per cent. It raised its forecast for adjusted earnings to between $3.20 and $3.25 a share, up from $2.90 to $3, even as it noted the impact of higher costs in the supply chain and wage increases during its third quarter.

But the outlook in China weakened, with Starbucks estimating comparable sales growth of 18-20 per cent in the current fiscal year. That was down from a prior forecast of 27-32 per cent.

Rachel Ruggeri, chief financial officer, said during an earnings call that “sporadic” resurgences of coronavirus had impaired consumer mobility in some markets.

Starbucks’ results for its third fiscal quarter continued to show a bigger rebound in the Americas, where sales have benefited from the elimination of most Covid-19 restrictions across the US.

The Seattle-based company posted an 84 per cent rise in comparable sales in the Americas. Internationally, comparable sales advanced 41 per cent, including a 19 per cent increase in China.

Starbucks earned $1.15bn compared with a $678m loss in the same quarter last year. Adjusted earnings of $1.01 a share topped Wall Street’s forecast of 78 cents.

Shares in Starbucks fell 3 per cent in after-hours trading on Tuesday.

Alphabet chief executive Sundar Pichai credited a “rising tide of online activity in many parts of the world” for driving profits almost three times higher than in the same period of last year.

Expectations were already high for Alphabet, with last year’s second quarter hit heavily by a sharp pullback in global ad spending as companies reacted to the onset of the pandemic.

As Wall Street had hoped, ad sales on the platform surged in the second quarter, pushing net income to $18.53bn — beating analysts’ estimates by around 10 per cent. Revenue for the period topped $61.9bn.

Read more here

Microsoft ended its financial year on a strong note, posting a 21 per cent jump in revenue as it saw a flood of new business in areas like cloud computing, LinkedIn advertising and business applications.

The US software company’s sales and earnings comfortably topped most official Wall Street estimates, though its shares slipped back 2 per cent after a near-20 per cent rally in the last two months took its stock price to a record high.

Microsoft’s Azure cloud platform, one of the main engines of its recent growth spurt, had seen revenue growth slow in recent quarters as it became a much bigger contributor to the overall business.

But in the three months to the end of June, Azure growth accelerated, reaching 51 per cent. That was up from growth of 46 per cent in the preceding three months, and the fastest expansion rate in five quarters.

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Apple’s profits almost doubled in its latest quarter to $21.7bn, as iPhone sales surged and anticipated component shortages failed to bite.

Apple’s overall revenues grew by 36 per cent compared with the same period last year, including a 50 per cent rise in iPhone sales, driving net income 93 per cent higher for the three months to June 26.

Though the pace of year-on-year growth was slightly slower than in the previous quarter, Apple still stretched far ahead of Wall Street’s targets on almost every metric.

Luca Maestri, Apple’s finance chief, told the FT that the quarter was “very, very strong across the board”, noting that its services revenues had hit a new record.

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Chicago has added nine more states, including Kansas, Tennessee and Wyoming, to its travel advisory list because of their high rates of new coronavirus infections.

The advisory urges unvaccinated travellers from so-called “orange list” states to obtain a negative Covid-19 test result no more than 72 hours prior to arrival in Chicago or undertake a 10-day quarantine.

States are added to Chicago’s travel advisory list if their daily infection rates exceed a threshold of 15 per 100,000 residents. Illinois’ most populous city has averaged 6.1 new cases per 100,000 people a day, according to the health department.

Chicago officials on Tuesday added Alabama, Alaska, Arizona, Kansas, Mississippi, Oklahoma, Tennessee, Texas and Wyoming to the advisory list.

Last week, Florida, Louisiana, Nevada and the US Virgin Islands were added, and the week before that, Missouri and Arkansas became the first states in the orange tier since early June.

The additions mean unvaccinated travellers from more than a quarter of US states now face travel restrictions in Chicago.

A pandemic-driven toy frenzy continues to push up sales at Mattel, as parents buy Barbie dolls, Hot Wheels cars and WWE action figures to entertain their children at home. Mattel booked more than $1bn in sales during the second quarter, a 40 per cent increase year on year, surpassing the $879m that most analysts predicted. 

The top US public health agency revised its guidance for vaccinated people on wearing masks indoors, in a significant turnround from a decision it made just two months ago. The US Centers for Disease Control and Prevention now recommends that vaccinated people should wear masks indoors in areas with “substantial and high transmission” of the virus, Rochelle Walensky, its director, announced on Tuesday.

The US Centers for Disease Control and Prevention now advises that vaccinated people should wear masks indoors in areas with “substantial and high transmission” of the virus © AP

Chicago has added nine more states, including Kansas, Tennessee and Wyoming, to its travel advisory list because of their high rates of new coronavirus infections. The advisory urges unvaccinated travellers from so-called “orange list” states to obtain a negative Covid-19 test result no more than 72 hours prior to arrival in Chicago or undertake a 10-day quarantine.

Canada has enough Covid-19 vaccine doses to inoculate everyone who is eligible for the shot two months ahead of schedule, Justin Trudeau revealed. That represents a milestone for the country, which had a rocky start to its vaccine programme and struggled to secure sufficient supply of doses during the early stages of the rollout.

Despite the slow early rollout of its vaccine programme, Canada now has doses to inoculate everyone eligible two months ahead of schedule © Bloomberg

More than a quarter of the UK population would have had to be effectively shielded during the pandemic to prevent about 80 per cent of total Covid-related deaths, a study conducted in Scotland has found. Researchers at the University of Glasgow examined the likelihood of vulnerable individuals contracting or dying from coronavirus, with the findings suggesting the government’s strategy to protect the most vulnerable groups may not have gone far enough.

City officials in São Paulo have moved to crack down on “vaccine sommeliers” with a new law aimed at stopping residents from choosing which jab they receive. Latin America’s most populous city is using multiple vaccines, including BioNTech/Pfizer, Oxford/AstraZeneca and the CoronaVac jab from China’s Sinovac. 

UK prime minister Boris Johnson on Tuesday warned the public against complacency after falling numbers of daily coronavirus infections raised hopes that Britain may have passed the peak of its latest wave. The UK recorded 24,950 new infections on Monday, the sixth consecutive day of falling infections.

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