The response could be longer than expected, if new data and forecasts from the travel and energy sectors are any indication. (For the latest information on the recovery in America, see our dashboard here.)
First, energy: the International Energy Agency on Thursday reduced its forecast for global oil demand in 2020 by 140,000 barrels per day.
The agency said its first downgrade in several months reflected the stagnant travel recovery, high number of coronavirus cases and weakness in the aviation sector. The demand outlook for next year has also been reduced.
Consumption is rebounding in China, the agency said, but transport activity is down in places where the virus continues to spread rapidly, such as India and Latin America.
“By December 2021, global oil consumption will still be 2% lower than at the end of 2019,” the IEA said.
Large producers see the same trend. OPEC on Wednesday said it expects global oil demand growth to decline by 9.1 million barrels per day in 2020, 100,000 barrels per day more than its previous forecast.
Now travel: TUI shares fell 6.3% on Thursday after the German tourism company said it lost 1.1 billion euros ($ 1.3 billion) in the three months ending in June.
The world’s largest tour operator has secured a second line of credit from the German government, a necessary step to “secure our liquidity in the event of further restrictions and long-term travel disruptions via COVID-19.”
The company operates cruise ships, five airlines and more than 400 hotels, employing approximately 70,000 people worldwide.
TUI ( has already announced plans to reduce its global operations and cut up to 8,000 jobs. It reduced the size of its German fleet, restructured its activities in France and closed 166 travel agencies in the United Kingdom. )
Although some travel activity has resumed, the company said it still cannot forecast its financial performance for this year due to the pandemic.
More bad news: With the further increase in coronavirus cases in Europe and the reintroduction of travel restrictions, the situation could worsen even more. The International Air Transport Association warned on Thursday that 7 million jobs in Europe supported by aviation are now at risk – a million more than expected in June.
“It is desperately worrying to see a further decline in the outlook for air travel this year, and the repercussions on jobs and prosperity,” said Rafael Schvartzman, IATA Regional Vice President for Europe.
Alibaba could be the next target in tech warfare
The United States has taken on some of the biggest tech champions from China, Huawei and TikTok from ByteDance to WeChat from Tencent. Alibaba, one of the world’s largest retail and internet conglomerates, could be next.
My colleague Sherisse Pham reports from Hong Kong that Alibaba could be targeted as President Donald Trump seeks to undermine Beijing’s growing technological prowess by forcing global players to choose between China and the United States.
Alibaba ( operates very popular e-commerce platforms, primarily available in China and Southeast Asian markets. It also launched Alipay, one of the most dominant payment apps in China alongside Tencent’s WeChat Pay. )
The company has yet to be threatened with the same kinds of sanctions that are proposed by Trump or imposed on other Chinese tech companies. But Secretary of State Mike Pompeo verified Alibaba’s name last week when he urged US companies to remove “untrusted” Chinese-owned technology from their digital networks.
Any action by Washington would likely not affect the company’s e-commerce and retail activities in China, which account for nearly 80 percent of its 509.7 billion yuan ($ 73.5 billion) in annual revenue.
But the general decree issued against WeChat last week indicates that Washington may be preparing to cast a wider net. This order could cut WeChat off from all US technology, including the software and semiconductors it needs to keep running.
“If they do something like this with Alibaba, that would also be a big blow,” said Dan Wang, a Beijing-based technology analyst at research firm Gavekal Dragonomics. Alibaba has significant cloud operations in China and “needs US semiconductor and software to continue these operations,” he said.
Stores need to pay more attention to the air we breathe
During the coronavirus pandemic, supermarkets and retail stores added a variety of safety features. The workers had to mask themselves and, more recently, most of the customers too. But most have yet to tackle what could be another important safety measure – changes to the systems that keep warehouses hot and cold, and which can potentially recirculate the air carrying the virus.
My colleague Nathaniel Meyersohn reports that the air in stores is now under closer scrutiny. Some epidemiologists, engineers and union leaders hope that changing the air filtration in stores during the pandemic will help protect against the spread of the coronavirus.
Better filtration in stores would be “an extra layer” of protection for workers, Marc Perrone, president of the United Food and Commercial Workers Union, said in an interview with CNN Business.
Some channels have already started to upgrade their filters.
“In light of COVID-19 and the latest CDC guidelines, we are also upgrading hospital filtration systems to MERV 13 or higher whenever technically possible,” a spokesperson for the German channel said. Lidl discount grocery store, which has approximately 100 stores in the United States.
Baidu is expected to report earnings after the US markets close.
- Netease ( results are before the opening bell. )
- Initial jobless claims in the United States will be released at 8:30 a.m. ET.
Coming tomorrow: US retail sales data will provide a snapshot of consumer activity in July. Data on industrial production and consumer sentiment are also available.