coronavirus:-student-dropout-crisis-looms,-un-says;-india-surpasses-5-million-cases

Coronavirus: Student dropout crisis looms, UN says; India surpasses 5 million cases

OECD sees global growth down 4.5% this year, says outlook ‘exceptionally uncertain’

A general view of a street linking to 9 de Julio Avenue is seen with cars as Argentina extends the curfew till 24th of May, imposed since 20th of March, in an effort to stem the spread of the coronavirus (COVID-19) pandemic in Buenos Aires, Argentina on May 21, 2020.

Muhammed Emin Canik | Anadolu Agency via Getty Images

The Organization for Economic Cooperation and Development expects the world economy to contract 4.5% this year, reflecting an unparalleled fall in output in the wake of the coronavirus pandemic.

The updated prediction for global economic growth comes as sectors such as travel and tourism have been decimated by the global health crisis, and at a time when many countries grapple with an upsurge in the number of reported Covid-19 infections.

As a result, the OECD said its outlook for economic growth remained “exceptionally uncertain.” 

The intergovernmental body had previously estimated the world economy would decline by 6% in 2020. It has predicted global gross domestic product (GDP) will grow by 5% next year. — Sam Meredith

India surpasses 5 million Covid-19 infections

Girls wearing protective face masks wait to pray inside temple premises on the occasion of the annual harvest festival of Onam, amidst the spread of the coronavirus disease (COVID-19), on the outskirts of Kochi, India, August 31, 2020.

Sivaram V | REUTERS

India has become only the second country worldwide to record more than 5 million cases of the coronavirus.

India’s Health Ministry reported a single-day increase of 90,123 Covid-19 infections in the last 24 hours, taking the country’s total number of cases to 5,020,359.

The world’s second-most populous country has recorded 82,066 deaths related to the virus, after reporting an additional 1,290 fatalities in the last 24 hours.

Only the U.S. has recorded more cases of the coronavirus, with 6.6 million infections and 195,942 related deaths, according to data compiled by Johns Hopkins University. — Sam Meredith

Spike in shipping caused by the pandemic fuels strong first quarter for FedEx

FedEx reported strong first-quarter earnings thanks to a boost in shipping during the Covid-19 pandemic. Shares jumped about 8% during extended trading.

Revenue rose 13.5% from a year ago to $19.32 billion during the quarter, Reuters reported, while analysts polled by Refinitiv expected revenue of $17.55 billion. FedEx reported earnings of $4.87 per share while Wall Street expected $2.69 per share.

The company recently announced it was increasing shipping rates beginning Jan. 4 at its express, ground and freight units, according to Reuters. —Chris Eudaily

University of Missouri expels two students for breaking rules

The University of Missouri has expelled two students and suspended another three for “willful and knowing actions” that violated the university’s coronavirus rules, threatening campus safety, according to a campus official. 

Bill Stackman, the university’s vice chancellor for student affairs, said in a letter to students and staff Tuesday that his office has been notified of parties and “other blatant violations” of coronavirus safety guidelines. University officials are investigating 11 student organizations for violating the university’s policies. 

“Let me be clear: The university will not hesitate to hold those flouting the rules accountable,” Stackman said in the letter. He warned additional investigations are pending that he expects “will result in similar outcomes.” — Noah Higgins-Dunn

‘We’re at a critical moment,’ Bill and Melinda Gates Foundation CEO warns

Bill and Melinda Gates Foundation CEO Mark Suzman told CNBC’s Meg Tirrell that while there will likely be an approved coronavirus vaccine by early next year, it’s not clear whether the drug’s manufacturing and distribution will be adequate enough to “tackle” the global pandemic. 

“We’re at a critical moment where the research is going well, but we’re not clear yet whether we’re going to have the manufacturing and distribution we need to really tackle this pandemic,” Suzman told CNBC. The Bill & Melinda Gates Foundation is a founding partner and donor to vaccine alliance Gavi, which is leading the Covid-19 Vaccines Global Access Facility, or COVAX, alongside the World Health Organization and the Coalition for Epidemic Preparedness Innovations, or CEPI.

In a new report on Monday, the foundation calls for nations across the globe to aid in Covid-19 vaccine and therapeutic research, scale the manufacturing for doses to the largest extent possible and deliver vaccines to those most in need, regardless of their nationality. 

“This is a classic global crisis that can only be solved with a global set of solutions,” Suzman said. “There are no national solutions where everyone turns into an island and focuses on their own populations because we’re not going to shut down international trade, we’re not going to shutdown all international travel.” —Noah Higgins-Dunn 

At least 24 million students could drop out of school, UN says

The coronavirus pandemic could prompt more than 24 million students to drop out of school, Henrietta Fore, executive director of the United Nations Children’s Fund, said.

192 countries have shuttered schools, leaving 1.6 billion students without in-person learning, Fore said. Only about half of the world’s students now have access to in-person learning and many of those whose schools remain shuttered don’t have resources to access virtual learning, she said.

“The longer children remain out of school, the less likely they are to return,” she said. “At least 24 million children are projected to drop out of school due to Covid-19. That’s why we are urging governments to prioritize reopening schools when restrictions are lifted.” —Will Feuer

Starbucks says U.S. same-store sales fell just 11% in August as recovery continues

Starbucks‘ U.S. same-store sales fell 11% in August, showing sequential signs of improvement as it looks to bring back customers.

The global coffee chain’s recovery in China, its second-largest market, has been rockier. After same-store sales fell 8% in June, they shrank to 10% the following month. However, August saw flat same-store sales growth, the company said during a presentation at a JPMorgan conference.

Starbucks brought back its pumpkin spiced latte earlier than ever before this year on Aug. 25. Consumers’ daily routines remain disrupted by the pandemic, hurting Starbucks’ business as fewer venture out for their daily cup of coffee. —Amelia Lucas

Deaths in young people are disproportionately among minorities

At least 121 people under the age of 21 have died of the coronavirus, and nearly two-thirds of them were Black and Hispanic people, according to a new study published by the Centers for Disease Control and Prevention.

Among the 121 young people who died of Covid-19, 45% were Hispanic and 29% were Black, the study said. About 4% were American Indian or Alaska Native people, the study added. Altogether, the groups represent 41% of the U.S. population, the researchers said, but account for more than 75% of Covid-19 deaths among people below the age of 21.

“Among infants, children, and adolescents hospitalized with laboratory-confirmed COVID-19 and cases of MIS-C, persons from racial and ethnic minority groups are overrepresented,” the researchers wrote. —Will Feuer

Americans aren’t ready to return to movie theaters

A recent report from data firm Morning Consult indicates that only around 18% of U.S. consumers feel comfortable returning to cinemas.

While international box offices have thrived, the U.S. has been sluggish since Hollywood began releasing new, big-budget films in August. Films like “Tenet” haven’t quite garnered the ticket sales that the industry was expecting.

For the last 12 weeks, public attitudes about leisure activities, like going to the movies, haven’t moved significantly according to Morning Consult, a warning that consumer habits are not returning to pre-pandemic normalcy. —Sarah Whitten

Pelosi renews call for large Covid stimulus package

House Speaker Nancy Pelosi said that she is still opposed to Republican efforts to pass a smaller version of her party’s stimulus plan despite the upcoming 2020 elections.

Asked by CNBC’s Jim Cramer if she’d be willing to pass a “skinny” deal now and work with the GOP on outstanding issues later, Pelosi fired back that “there is no later with this administration.”

“This is the opportunity. And the skinny deal is a Republican bill: That’s not a deal at all,” Pelosi said.

Her insistence on a larger deal, however, may put fellow Democrats in a tough position since many members of the House who won seats from Republicans in 2018 face tough reelection battles. —Thomas Franck

Delta won’t furlough its workers — except for pilots

Most Delta Air Lines employees won’t face furloughs when a $25 billion federal aid package for the industry expires at the end of this month, thanks to thousands of volunteers who took buyouts and leaves of absence. Delta also reduced schedules by 25%, another cost-saving measure. 

Airlines have scrambled to cut costs and, in particular, reduce labor expenses as the pandemic forced them to slash flights.

The group safe from job cuts now includes flight attendants, mechanics and other front-line workers. But Delta is still negotiating with the union that represents its pilots to potentially avoid more than 1,900 job cuts as early as Oct. 1.

Southwest Airlines also has said it expects to avoid involuntary furloughs this year. American and United have said they could cut as many as 35,000 jobs combined when federal aid runs out. Executives, labor unions and bipartisan members of Congress have pushed for more aid for the ailing industry to preserve jobs until the end of next March, but so far lawmakers have failed to reach a new coronavirus stimulus bill that could include the extra airline relief. —Leslie Josephs

Palihapitiya says give money direct to Americans, not zombie companies, in next relief bill

Social Capital CEO Chamath Palihapitiya believes the next coronavirus relief bill should focus primarily on giving money directly to Americans, telling CNBC earlier the effort to help businesses “wasn’t functionally useful.” 

“We know this economy is always consumer-led. It’s consumption that drives growth in the United States. It drives jobs and capital allocation, and the more money in individuals’ hands the better they can be to support businesses, buy different products,” the venture capitalist said on “Squawk Box.”

The U.S. economy is currently in a “slow grind back to normalcy,” Palihapitiya said, but providing more support to consumers “how we grow ourselves out.”  He added, “The more money we waste and give to zombie companies, we’re just going to push the can down the road and it’s all unnecessary.” —Kevin Stankiewicz 

With national search, Lowe’s aims to give small business a boost

Marvin Ellison

Jim Spellman | WireImage | Getty Images

Many small businesses have been battered by the coronavirus pandemic. Lowe’s CEO Marvin Ellison said the retailer wants to give them a hand by offering a path to get products on its shelves and website.

Ellison said on CNBC’s “Squawk on the Street” that it will search across the country for standout entrepreneurs as part of a new initiative dubbed “Making It… At Lowe’s.” It has enlisted help from Daymond John, a star of ABC’s “Shark Tank,” to mentor entrepreneurs and whittle down the pool of contenders. A small group will participate in a one-day virtual pitch competition, judged by Lowe’s executives and hosted by John.

During the pandemic, Lowe’s committed $55 million towards grants for minority- and women-owned small businesses and rural small businesses. Ellison said it’s received more than 800,000 applications, which illuminated the great need and inspired the pitch contest. 

“The demand from this program led us to understand that there’s a lot more that we should be doing,” he said. —Melissa Repko

The United Arab Emirates approves Chinese vaccine for emergency use

The United Arab Emirates approved a Chinese coronavirus vaccine for emergency use for its frontline health workers, state officials have announced.

“The vaccine will be available to our first line of defense heroes who are at the highest risk of contracting the virus,” the UAE’s National Emergency Crisis and Disaster Management Authority said in a tweet Monday night.

NCEMA said that 31,000 volunteers have already participated in clinical trials of the vaccine, including 1,000 volunteers with chronic diseases. The phase three trials, which began in the Gulf country of 10 million in July, are for the Covid-19 vaccine developed by Chinese state-owned pharmaceutical company Sinopham. 

Phase three trials of the vaccine are ongoing, but UAE health authorities said that no unexpected side effects have so far been detected. —Natasha Turak

Dow opens up more than 200 points as Wall Street builds on Monday’s comeback

U.S. stocks built on the strong gains from the previous session in light of solid economic data, reports CNBC’s Fred Imbert and Jesse Pound.

The Dow Jones Industrial Average traded 225 points higher, or 0.7%. The S&P 500 gained 0.8% and the Nasdaq Composite advanced 1.2%. —Melodie Warner 

Deloitte forecast holiday spending to rise 1% to 1.5%, hinging on gap between rich and poor

Holiday retail sales this year are forecast by Deloitte to rise between 1% and 1.5%, amounting to between $1.147 trillion and $1.152 trillion during the November-to-January time frame. That’s compared with growth of 4.1% in 2019, when sales were nearly $1.14 trillion. The firm is also calling for holiday e-commerce sales to surge by 25% to 35%, amounting to between $182 billion and $196 billion, compared with year-over-year growth of 14.7% in 2019. 

But Deloitte’s expectations for the 2020 holidays hinge on how much splurging high-income consumers do, and how much belt-tightening takes place throughout lower-income households, through the remainder of the coronavirus pandemic

“This year, one of two holiday scenarios will play out,” said Rod Sides, a vice chairman at Deloitte and its retail and distribution sector leader. “History would tell us… we are going to see groups of consumers recover differently.” 

A sign of just how different the holidays are going to look during a pandemic: A number of retailers and mall operators are announcing plans to close on Thanksgiving Day this year. Recently, it had become a tradition to open even earlier, ahead of Black Friday, so that people could kick off their shopping after a nice turkey dinner. The biggest U.S. mall owner Simon Property Group announced Monday evening its plans to stay dark on Thanksgiving. —Lauren Thomas

Bill Gates says ‘the next big question’ is how to distribute a vaccine

Although a coronavirus vaccine will likely become available in 2021, the “next big question” is how to manufacture and distribute the doses to lower-income groups, particularly in less developed countries, billionaire philanthropist Bill Gates said. 

The Bill and Melinda Gates Foundation noted in a new report that the pandemic is having a disproportionate impact on women, racial and ethnic minority groups, as well as people living in extreme poverty. When it comes to distributing a vaccine, the report cites modeling from Northeastern University that predicts twice as many people could die from Covid-19 if richer countries hoard the first 2 billion vaccine doses rather than distributing them equitably.

“It shouldn’t just be the rich countries winning a bidding war,” Gates said on a conference call on Friday ahead of the report’s release. “Misallocating the vaccine would cause dramatic additional deaths.” —Noah Higgins-Dunn

Top economists predict how the coronavirus will impact globalization

Top economists offer diverging predictions of how the coronavirus will affect the global economy. Some foresee an end to globalization while others believe it may foster new practices of international collaboration. —Hannah Miao

Global coronavirus deaths rose last week, WHO says

Funeral directors William Beresford, 26, and Michael Doyle, 49, prepare a body to be shipped to Africa at Beresford Funeral Service in Houston, Texas, U.S.

Callaghan O’Hare | Reuters

The number of deaths caused by the coronavirus rose last week, compared to the week before, WHO data showed Monday — although the number of new cases around the world fell slightly.

In the week ending Sept. 13, WHO data showed that the number of deaths increased by 8% compared to the previous week, with over 40,600 fatalities reported. New cases of Covid-19 rose by 1.8 million, a 3% decline in new cases compared to the previous seven days.

The data comes after WHO reported a record one-day increase in coronavirus cases Sunday, with the total rising by 307,930 in 24 hours. The biggest increases in new cases were seen in the U.S., India and Brazil. —Holly Ellyatt

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