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British pub chain vows to stay open with social distance between drinkers

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A Wetherspoons pub in central London in September 2017

Robert Alexander | Getty Images

Major British pub chain J.D. Wetherspoon plans to stay open in defiance of government advice amid the coronavirus pandemic, but has vowed to implement social distancing between drinkers.

U.K. Prime Minister Boris Johnson has advised the public to avoid pubs and restaurants, but the government has so far stopped short of an enforced lockdown. The country has now confirmed 2,716 cases of coronavirus, according to Johns Hopkins University.

Wetherspoon Chairman Tim Martin told CNBC that the government’s guidance was “ambiguous” and likened the closure of pubs to the shutting down of Parliament.

“I don’t think pubs and restaurants should be shut down completely. I think there should be social distancing, people shouldn’t stand at the bar, and there are various measures you can put in place for safety, but I don’t think it is right to close them,” Martin told CNBC’s “Squawk Box Europe,” adding that such a move would be “too disruptive.”

“If we can stay open and tick over with a few staff, distance between the tables and so on, I think that is a sensible thing for us and it is better for the country,” Martin said.

Martin suggested that if trade falls by 50%, he would be able to retain more than half of his staff. Wetherspoons reported first-half profit before tax of £57.9 million on Friday morning, up 15% from the previous year, but canceled its dividend and warned that earnings will suffer as a result of the coronavirus.

‘Herd immunity’

Martin also backed the controversial “herd immunity” approach to tackling the outbreak adopted by Dutch Prime Minister Mark Rutte.

“The reality is that in the near future a large part of the Dutch population will be infected with the virus,” Rutte said in a national address Monday. “We can slow down the spread of the virus while building controlled group immunity.”

The same approach was originally preferred by the British government, which has since reversed course.

“They know that some people are going to get the virus, we don’t have a vaccine, and as people build up immunity, particularly young people who are very low threat, the next time the virus comes back which it will do once the lockdown finishes, you’re in a better position,” Martin argued.

The World Health Organization has questioned the evidence supporting the “herd immunity” tactic, since COVID-19 is too new among the population to understand its immunological behavior.

Another concern would be the human cost. Based on available confirmed diagnoses, the U.K.’s death rate from the virus sits at around 5%. Britain’s chief scientific officer Patrick Vallance has suggested that 60-70% of a population would need to contract the virus in order to develop this immunity.

Based on the assumption that 60% of the U.K.’s 66.44 million people, according to 2018 figures from the Office for National Statistics (ONS), will contract the virus, and the current death rate, almost 2 million people in the U.K would have to die as part of the initial herd immunity effort.

However, testing is still somewhat limited and the case total is widely believed to be much higher. As of Thursday, 64,621 people in the UK had been tested for coronavirus, but the government aims to be testing 25,000 people a day within four weeks.

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Asia Pacific stocks set to jump as U.S.-China tensions ramp up

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U.S. Secretary of State Mike Pompeo told Congress on Wednesday that Hong Kong was no longer autonomous from China, raising questions over the special administrative region’s favorable trade relationship with the U.S.

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Huawei CFO loses major battle in extradition fight

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Meng Wanzhou, chief financial officer of Huawei Technologies Co., leaves the Supreme Court in Vancouver, British Columbia, Canada, on Tuesday, Oct. 1, 2019.

Trevor Hagan | Bloomberg | Getty Images

Huawei’s chief financial officer Meng Wanzhou lost a major legal battle in her fight against extradition to the U.S. to stand trial on fraud charges.

In the Wednesday ruling, the Supreme Court of British Columbia found that the case against Meng meets a standard called “double criminality,” where the acts the U.S has accused her of are also illegal in Canada. The next phase of proceedings will begin next month. 

Diplomatic tensions are rising as Meng, who is the daughter of Huawei founder Ren Zhengfei, will have to remain in Vancouver on bail during a lengthy extradition process. 

Shortly after the court’s decision, the Chinese Foreign Ministry urged Canada to release Meng immediately and ensure her return to China. The Global Times, which is aligned with the Communist Party of China, blamed the U.S. for the ruling, saying Canada’s judicial and diplomatic independence has fallen to “U.S. bullying.” 

Huawei, the world’s largest telecommunication supplier, has been a flashpoint for the Trump administration’s trade battles with China. Shortly after Meng was arrested in December 2018, President Trump weighed in on the extradition case, telling Reuters he might consider “intervening” in the case if it would help the U.S.- China trade war. On Wednesday afternoon, legislation calling for sanctions against China passed both houses of Congress; President Trump has not said whether he intends to sign it into law.

The U.S. Commerce Department has also targeted Huawei. It blocked shipments of semiconductors to the company from chip-makers. That followed the administration’s move to keep Huawei on the U.S. Entity List, a blacklist that restricts American firms doing business with the company. The ban is hitting Huawei’s bottom line. The company reported it saw slowing revenue growth in 2019

Huawei said it was “disappointed” in the ruling and maintained Meng’s innocence.

Meng is due back in court June 15.

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Dow futures point to modest gains after index pops back above 25,000

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A trader walks by the New York Stock Exchange (NYSE) on the first day that traders are allowed back onto the historic floor of the exchange on May 26, 2020 in New York City.

Spencer Platt | Getty Images

Futures contracts tied to the Dow Jones Industrial Average and S&P 500 ticked higher Wednesday evening as investors looked to add to Wall Street’s robust gains so far this week.

Dow Jones Industrial Average futures rose 57 points, indicating an opening gain of about 92 points when regular trading resumes on Thursday. S&P 500 futures also pointed to a 0.2% advance on Thursday; Nasdaq-100 futures dipped into negative territory.

The overnight moves Wednesday evening promised to add to sharp rallies in the major stock indexes so far this week.

The Nasdaq Composite, S&P 500 and Dow all extended week-to-date gains during Wednesday’s regular trading session and finished the day up 0.77%, 1.48% and 2.2% respectively. The broad S&P 500 closed at its highest level since March, above 3,000; the Dow jumped 553 points to finish Wednesday’s session north of 25,000, its own highest close since March.

The S&P 500, Nasdaq Composite and Dow are up 2.7%, 0.9% and 4.4% since the start of the holiday-shortened week. The Dow is on track for its best week since the week ended April 8.

Traders say this week’s rally is in large part thanks to optimism about the reopening of the U.S. economy.

Equity of companies that stand to benefit the most under reopenings, such as the airlines and retailers, led the major indexes higher Tuesday and Wednesday. Kohl’s, Nordstrom and Gap all rose at least 14% on Wednesday while airlines Delta, American, Alaska and United rose 2.6%, 7.5%, 2% and 3.8%, respectively.

Meanwhile, those stocks that outperformed as stay-at-home orders went into effect in March have lagged in recent sessions. Zoom Video dropped 1.2%; Shopify, Amazon and Teladoc Health fell 2.3%, 0.6% and 1.1%, respectively. 

Thursday’s forthcoming update to the U.S. unemployment claims threatened to keep the week’s optimism in check.

The Department of Labor is scheduled to release the latest update to initial jobless claims at 8:30 a.m. ET Thursday morning. Though economists polled by Dow Jones expect the government to announce yet another deceleration in the pace of claims, the consensus estimate predicts another 2.05 million Americans filed for insurance during the week ended May 23.

Last week, the Labor Department reported another 2.44 million Americans had filed claims in the week ended May 16, which brought the coronavirus crisis total to some 38.6 million, by far the largest loss in U.S. history.

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