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Trump-Touted Drugs Tied to Deaths; Vaccine Trials: Virus Update

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(Bloomberg) — The antimalaria drugs that U.S. President Donald Trump has touted to fight Covid-19 are linked to an increase of death and heart ailments.Oxford University and AstraZeneca started recruiting subjects for advanced human studies of one of the fastest-moving experimental vaccines. Anthony Fauci, who is leading the U.S. infectious disease control effort, said he was “cautiously optimistic” about Moderna’s vaccine, boosting the stock.Brazil had another record day of deaths and its government agreed to the terms of a financial aid package. Beijing abandoned a growth target for 2020 amid the uncertainty caused by the coronavirus, while central banks in Japan and India stepped in to help their economies. Britain posted a record budget deficit in April and retail sales slumped.Key Developments:Virus Tracker: Cases top 5.1 million; deaths around 333,000Coronavirus is a stress test many world leaders are failingMillions face risk of virus contagion in storm-hit South AsiaNobody’s happy about all the contact-tracing apps out nowBankers to the ultra-rich deprived of glamor turn to ZoomScared and sick, U.S. meat workers crowd into reopened plantsSubscribe to a daily update on the virus from Bloomberg’s Prognosis team here. Click VRUS on the terminal for news and data on the coronavirus. See this week’s top stories from QuickTake here.Cyprus Reopens Foreign Flights (10:40 a.m. NY)Cyprus will start allowing direct flights from some European countries on June 9, and it plans to end a mandatory 14-day quarantine for arriving visitors on Monday and reopen hotels on June 1.In the first stage, Cyprus will permit flights from Greece, Malta, Bulgaria, Norway, Austria, Finland, Slovenia, Hungary, Israel, Denmark, Germany, Slovakia and Lithuania. A second phase on June 20 will add Switzerland, Poland, Romania, Croatia, Estonia and the Czech Republic.Malaria Drugs Linked to Death, Heart Risk (9:30 a.m. NY)The antimalaria drugs touted by U.S. President Donald Trump to treat Covid-19 patients were linked to an increased risk of death and heart ailments in a study published in The Lancet medical journal. Trump said Monday that he had taken the drug for about a week.Hydroxychloroquine and chloroquine didn’t benefit the patients either alone or in combination with an antibiotic, according to the study based on records of 15,000 people treated with the antimalarials and one of two antibiotics often paired with the drug. Treatment with any combination of the four drugs was associated with a higher risk of death than seen in 81,000 patients who didn’t receive them, the study found.Puerto Rico Cases Surpass 3,000 (8:14 a.m. NY)Confirmed coronavirus cases in Puerto Rico surpassed the 3,000 mark on Friday, as the Health Department said an additional 117 people had tested positive. This is the third time this month that more than 100 cases were detected in a 24-hour period.According to government figures, the pandemic has now affected 3,030 people and 126 have died. The figures come as the commonwealth of 3.2 million people pushes ahead with plans to reopen the economy after declaring a broad lock-down on March 16. On Tuesday, malls, retail outlets and restaurants will be allowed to resume operations.Russia Tests Covid-19 Vaccine on Researchers (8:10 a.m. NY)A Russian government research institute said it conducted successful unofficial tests on a potential coronavirus vaccine. Laboratory staff who volunteered to receive the vaccine at the Gamaleya epidemiology institute in Moscow had no side effects and are healthy, said its director, Alexander Ginzburg, the state-run Tass news service reported.It didn’t state how many people took part in the trial.Fauci Optimistic About Moderna Vaccine (7:36 a.m. NY)Moderna shares rose after Anthony Fauci, the leading U.S. infectious disease official, said he was optimistic about the company’s vaccine. “Even though there were only eight individuals, we saw neutralizing antibodies at a reasonable dose of the vaccine,” Fauci said on CNN. “Although the numbers were limited, it was really quite good news because it reached and went over an important hurdle in the development of vaccines. That’s the reason why I’m cautiously optimistic about it.”Fauci said on NPR that he expects the full results of a Phase 1 study of the biotech’s experimental Covid-19 vaccine within weeks. Earlier this week, an experimental vaccine from the company showed signs that it can create an immune-system response to fend off the new coronavirus. In 25 people who got either of the two smaller doses used in the study, researchers reported that the levels of antibodies equaled or exceeded the levels of antibodies found in patients who had recovered from the virus.The second test, evaluating the quality of those antibodies, was only available for eight of the people because it takes longer to perform. But in all eight people, the vaccine successfully stimulated the body to create antibodies capable of neutralizing the virus in the test tube, so it can no longer infect cells.Alibaba Growth Slows; Deere Tractor Sales Hold Up (7:15 a.m. NY)Alibaba Group Holding Ltd. reported its slowest pace of revenue growth on record after China’s economic contraction drove down spending across its online marketplaces. The results demonstrate the world’s second largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items.Deere & Co. shares rose after the world’s biggest tractor maker navigated coronavirus upheavals better than expected in the height of the pandemic. For the three months through April, sales and earnings fell less than analysts projected as agriculture — deemed essential in the lockdown era — proves more resilient than many other industries.U.K. Contact-Tracing App Roll-Out Delayed (6:20 a.m. NY)Britain’s mobile phone app for tracking coronavirus infections has been delayed by bureaucracy and the addition of more symptoms to monitor, according to a person familiar with the matter — who said they expected the government to abandon it in favor of the model backed by Apple Inc and Alphabet Inc.’s Google.The app is being developed by VMware Inc. and Zuhlke Engineering Ltd at a cost of 4.7 million pounds ($5.8 million). There has been controversy about the U.K.’s decision to reject the structure backed by Apple and Google, a move that has been criticized by privacy campaigners.The U.K. has opted for a “centralized” model, where people who test positive for coronavirus upload all their recent contacts to a database, and those people are then contacted and warned. Apple Inc. and Google released their Covid-19 exposure-notification tools on Wednesday. Some governments have criticized the “decentralized” system because it doesn’t let authorities store data on who has the virus and track where it is spreading. Instead, it just notifies individuals if they have been exposed.Germany Plans One-Time Child Bonus (6 a.m. NY)German Finance Minister Olaf Scholz is planning a one-time bonus for families of 300 euros ($327) per child as part of a government stimulus program worth as much as 150 billion euros, Der Spiegel magazine reported, without identifying the source of its information. The bonus could cost the government 5 billion to 6 billion euros. Scholz is also considering vouchers to boost consumer spending.Belgian Virus Spread Remains Under Control (5:54 p.m. HK)A weekly update of Belgium’s infection rate showed the epidemic remains under control in the country after lock-down measures were gradually eased starting May 4. The so-called reproduction factor rose to 0.86 for the 7 days ending May 20 from about 0.8 in the previous week, below the key threshold of 1.0.Belgium reported 276 new infections in the past 24 hours, based on 18,182 diagnostic tests. That’s up from 252 the prior day, which was based on 18,918 tests. New hospital admissions fell to 56 from 71 the day before, as the total number of beds occupied declined to 1,415.U.K. Will Fine Arrivals Who Break Quarantine (5:29 p.m. HK)Passengers arriving in the U.K. will be forced into quarantine for two weeks and face fines of 1,000 pounds ($1,217) if they break the rules. The plan is designed to stop travelers re-introducing coronavirus to the country after becoming infected overseas and is likely to have a major impact on the aviation industry’s attempts to recover after the lockdown.Home Secretary Priti Patel will set out the details of the new quarantine system at the daily government press conference at 5 p.m. on Friday. Her Cabinet colleague, Brandon Lewis, said the measures will be reviewed every three weeks, along with the rest of the government’s coronavirus response.Putin Presses Plan to Extend Rule (4:20 p.m. HK)Thrown off course by the coronavirus pandemic, Vladimir Putin is moving to regain the political initiative for his plan to remain as Russia’s president potentially until 2036. Putin may announce a snap ballot within weeks on proposed changes to the constitution that allow him to sidestep term limits, said four people familiar with Kremlin discussions on the matter. Electronic voting will be used as well as polling stations to boost turnout and the result, the people said.Putin delayed the referendum on constitutional amendments originally scheduled for April 22 when the coronavirus crisis erupted in the spring. What had seemed a formality then now looks a harder sell. Like millions around the world, Russians were thrust into hardship and uncertainty about their jobs after Putin in late March ordered a nationwide lockdown that sparked a 33% plunge in economic activity.While there are signs the Covid-19 epidemic is starting to wane in Russia, which has the world’s second-highest number of infections, the turmoil unleashed by the virus and an unprecedented slump in oil prices continues to rip through the economy. Confirmed cases increased by 8,894 to 326,448 on Friday, while the number of deaths in the past day rose by 150, the most so far, to 3,249.Oxford, AstraZeneca Begin Advanced Trials (3:47 p.m. HK)The University of Oxford and AstraZeneca Plc have begun recruiting more than 10,000 subjects for advanced human studies of one of the world’s fastest-moving experimental Covid-19 vaccines.A smaller part of the trial will expand the age range of testing to children from 5 to 12 years old and adults 56 and older, according to a statement. The other, larger stage will test the vaccine’s effectiveness in volunteers 18 and older.AstraZeneca received a boost in its efforts to get the immunization tested and ready for use when the U.S. pledged as much as $1.2 billion toward development on Thursday.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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Fight Over ‘Predatory’ J.C. Penney Loan Gets Ugly

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(Bloomberg) — The fight over who gets to fund J.C. Penney Co.’s bankruptcy is heating up.The U.S. retail giant filed for Chapter 11 protection last month with a $900 million financing package lined up from senior lenders including H/2 Capital Partners LLC and Silver Point Capital LP, according to a presentation at the time. Another set of lenders has lambasted the deal, calling the terms “predatory” in court documents and accusing the other group of strong-arming J.C. Penney.The firms opposing the loan have offered a similarly structured, cheaper financing package that gives Plano, Texas-based J.C. Penney more discretion in bankruptcy, the group said. The retailer’s current loan proposal requires the company go through with an agreed-upon restructuring and gives lenders the ability to veto the plan, according to court papers.“This court and the debtors should not be bullied into yielding to the threats of predatory lending terms that come at the expense of employees, customers, vendors and other creditors,” attorneys for opposing lenders wrote in court papers. The “only answer” as to why J.C. Penney won’t embrace the alternative loan is that the proposed lenders “threatened to use their 75% position in the first lien debt to force the debtors into a liquidation if they don’t get their way,” they write.Commitment FeeJ.C. Penney entered Chapter 11 protection last month having already paid a $45 million commitment fee on the proposed financing package. The loan is contingent on a plan to, among other things, get approval from senior creditors on a new business plan by July 14 and spin some of its properties into a real estate investment trust.Financing tied to a specific Chapter 11 strategy is increasingly common in corporate bankruptcy. Such deals can help companies cut costs and exit bankruptcy quickly, but concerns have been raised about whether they may trample the rights of smaller creditors or lead to suboptimal deals.A J.C. Penney representative declined to comment. The company has said in previous court filings that its proposed bankruptcy financing was “instrumental” in arriving at its plan for exiting bankruptcy, one it says will save thousands of jobs and maximize recoveries for creditors.Attorneys for the proposed bankruptcy lenders didn’t immediately respond to a message seeking comment on Wednesday.A hearing on the bankruptcy loan is set for June 4.The case is J.C. Penney Company Inc., 20-20182, U.S. Bankruptcy Court for the Southern District of Texas (Corpus Christi)(Correction removes reference in third paragraph to GoldenTree Asset Management and Contrarian Capital Management, members of the opposing lender group named in a court document, as one or more of the firms is no longer a member of the group.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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Walmart pushes forward with new HQ plans to help staff collaborate post-pandemic

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In contrast to the many tech CEOs seeing work-from-home as remaining the norm after the pandemic eases, Walmart’s chief executive says face time at the office will remain crucial to how the retailer’s corporate employees function when things get back to normal—and once its new campus opens.

Walmart last year heralded a new 350-acre home office project expected to open in its hometown of Bentonville, Arkansas in stages and be completed by 2025, updating an outdated facility with a goal to more easily attract and retain talent for which it has to compete with the likes of Amazon, Google, and Apple.

But the plan was announced well before anyone could imagine a pandemic like COVID-19 would have people work from their homes for months on end. Yet despite that, Walmart chief executive Doug McMillon firmly believes the value of in-person collaboration with colleagues will endure and says it won’t change the future home office’s design much.

“As this crisis has gone on, we’ve noticed things that were missing,” McMillon said on a webcast of Walmart’s annual shareholder meeting on Wednesday. “How do you get to know people? How do you get a sense for what the culture is like? Culture inside a company is such an important aspect.”

The future Walmart headquarters will boast features of modern-day office life including mass timber construction, ample biking paths (the company wants 10% of employees to commute by bike), green space, and outdoor meeting rooms to position itself as a high-tech, cutting-edge company worthy of today’s biggest tech and retail talent, not just a mammoth discount chain.

Walmart, the largest private U.S. employer with 1.4 million workers, has a staff of about 14,000 at its headquarters. The current campus is made up of a decentralized series of 20 nondescript buildings, many with one floor only in deference to founder Sam Walton’s aversion to flash. The new campus will be made up of offices and cafes with smart building design, solar panels, and regionally sourced materials, surrounded by outdoor spaces.

Still, the pandemic has led countless companies to rethink whether they really need people come into the office as much. Shopify CEO Tobi Lütke recently told Fortune that most the Canadian e-commerce company’s employees would work from home from now on.

“One thing we’re not going to get back to, at least in the tech industry, is office centricity,” Lütke said. Twitter and Square have also given employees the option to work from home permanently, while Facebook’s CEO Mark Zuckerberg thinks half of his employees could be working remotely in five to 10 years.

Walmart’s executive vice president of corporate affairs, Dan Bartlett, said the new office project was still in the design stages, so changes could be made to reflect any longer lasting impacts of the pandemic and how Americans like to work without “disrupting the overall timeframe of the project.”

The company was long afflicted by a silo culture in which different divisions didn’t work together well enough. That was notably the case with its e-commerce and retail divisions for years. But now Walmart has emerged as a strong No. 2 to Amazon, and the retailer is benefiting from more harmony across its divisions, something crucial in the retail and e-commerce wars.

“In a post-vaccine world we’re going to need office space and people are going to collaborate,” McMillon said. “Being present with each other is going to matter over time.”

More must-read retail coverage from Fortune:



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Corporate tax cut by July unlikely

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By Charmaine A. Tadalan and Jenina P. Ibañez Reporters

AN IMMEDIATE REDUCTION of the corporate income tax rate to 25% by July is unlikely, as the Senate prioritized other measures over the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill on Wednesday.

“We focused on the Bayanihan (2) bill,” Senate President Pro Tempore Ralph G. Recto said in a mobile phone message on Wednesday.

The CREATE bill is the revised version of the Corporate Income Tax and Incentives Rationalization Act, which now provides for an outright 5% reduction of the corporate income tax to 25% from 30%, as well as flexible tax and nontax incentives for investors.

Finance officials earlier hoped the lower tax would take effect by July, as part of efforts to stimulate an economy battered by a coronavirus pandemic.

The Department of Finance (DoF) earlier estimated the 5% tax reduction will cut government revenues by P42 billion in the second half if CREATE is implemented by July, and by another P625 billion in the next five years. The DoF hopes these foregone revenues will drive economic activity and allow businesses to continue funding their operations and keep their employees.

Congress was scheduled to adjourn sine die on Wednesday, but decided to hold another session today.

Asked whether the measure may still hurdle the Senate before the year ends, Mr. Recto said “yes, with amendments.”

Senate President Vicente C. Sotto III last week said the proposed CREATE was among the priorities of the chamber, but the Senate’s session agenda for Wednesday did not include the bill.

Under CREATE, the tax will be further reduced by 1 percentage point annually beginning 2023 until 2027. In its previous version, the bill proposed to gradually reduce the rate until it reaches 20% in 2029.

Albay Representative and House Ways and Means Committee Chairman Jose Ma. Clemente S. Salceda said in a separate message the measure might still be tackled in a “special session.”

“It’s up to the Executive, which we await,” Mr. Salceda said.

Finance Assistant Secretary Ma. Teresa S. Habitan said the DoF may request for a special session for the passage of the CREATE bill.

“We’re hoping it will be part of what is passed in the regular session. Otherwise, we might request for a special session,” she said in a mobile phone message.

The CREATE bill was among the recommendations of state economic managers to revive the economy. More than 30 local and foreign business groups have also supported the passage of the bill.

Mr. Sotto, however, said he doubts the measure would be taken up in a special session. He also said the Constitution bars Congress from holding sessions 30 days before the opening of the next regular session on July 27. This gives them only until June 8, should a special session be called.

Mr. Sotto said they can hold a session as late as June 8, but others are saying the latest they can do it is on June 11, taking into account some holidays. “To play safe… the last is June 8,” he said in an online briefing.

Meanwhile, the Philippine Ecozones Association (PHILEA) is backing the retention of the current incentives system for an additional 5 to 10 years, aligning itself with foreign and export groups.

PHILEA in a letter addressed to the Finance department and Senator Pilar Juliana S. Cayetano said retaining the incentives system during the pandemic or a specified and “reasonable” period would help the country be competitive in attracting investments from companies moving operations out of China.

The position of PHILEA, along with foreign and export groups, stand in contrast with other business groups that have supported the immediate passage of CREATE. The bill also rationalizes tax incentives, granting a transition period of up to nine years.

PHILEA, which represents 12 member companies and 20 industrial estates, said the Finance department must release a statement that existing incentives under the Philippine Economic Zone Authority should be retained for at least five years and ideally ten years.

“The statement must be forceful and irreversible in order to erase doubts that have been created in the minds of many companies both about the removal or reduction of incentives and the image that the Philippines is mercurial in its policy-making,” the association said.

PHILEA added that incentives timelines should be improved, noting that the Philippines is behind some neighboring countries in terms of the number of years incentives are offered.

The Joint Foreign Chambers of Commerce of the Philippines, along with an outsourcing industry group and electronics and wearables export groups, had said in their own position paper that incentives allowing companies to pay 5% tax on gross income earned in lieu of other national and local taxes should be retained for five years prior to sunset provisions.

The same groups back the immediate reduction of corporate income tax to 25% and pushed for accelerating reduction to 20% by 2025.

But PHILEA said that this reduction would be a welcome development for domestic manufacturers, but for exporters, it is more important to retain the existing tax incentives.

PEZA said it would recommend amendments for CREATE to apply only to domestic companies and small businesses, retaining status quo incentives for export companies.

PHILEA also asked that the Finance and Trade departments appoint a private sector counterpart in efforts to attract companies moving factory production out of China.

“This should preferably be a Philippine entity that can represent the country as a knowledgeable citizen. The assignment of the investment house would be to mobilize the players in the ecozone industry, coordinate with the relevant Government agencies, and identify and organize other factors that will give the country an advantage over its competitors,” the association said.

PHILEA added the government should create a major public relations program and to streamline industrial parks applications for ecozone approval to accelerate a “tedious and slow moving” process.

“A deadline for processing in each agency should be established and rigorously followed.”



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