Bad News Everywhere, But Not A Care In The World.

The trickle of disconcerting headlines continued virtually unabated during the first day of the third quarter.

But nobody seemed to notice (or care) during a sleepy session punctuated by decent data.

Notably, the US is finally set to move forward with sanctions on Chinese officials under the Magnitsky Act in connection with human rights abuses in Xinjiang. The measures “are likely to target Communist Party members responsible for the internment and persecution of minorities”, Bloomberg said, citing a pair of unnamed sources who “cautioned that Trump would still need to give final sign-off for any sanctions to go ahead”.

Congress has pressed relentlessly for action. Although Trump did finally sign bipartisan legislation green-lighting the sanctions, John Bolton claims the president indicated to Xi last summer that the White House did not intend to intervene in any way to protect Uighurs who are detained in “re-education camps”.

Earlier this month, Trump told Axios he held off on sanctions in an effort to ensure the trade deal could advance. The prospective measures would come during the same week the US officially revoked Hong Kong’s special status. The administration notified businesses on Wednesday that supply chains running through Xinjiang are at risk.

The market continues to ignore the escalations between Washington and Beijing. Hong Kong began arresting locals on Wednesday under the new national security law.

At this point, you’d be a fool to say the trade deal is still on. There is no sense in which that is a tenable position at this juncture. The administration can say whatever it wants, but the US and China are in open conflict over virtually every foreign policy issue that matters. There’s no agreement on anything. Sino-US relations are the worst they’ve been under Trump. And that is really (really) saying something.

The virus situation worsened on a number of fronts in the US. Apple is closing another 30 stores, bringing the total to 77. The last two open locations in Florida will be shuttered, as will stores in Alabama, California, Georgia, Idaho, Louisiana, Nevada and Oklahoma. The announcement came with the same boilerplate “abundance of caution” language the company used last month when closing dozens of stores in hotspots around the country.

Meanwhile, California Governor Gavin Newsom is unveiling fresh lockdown protocols for Los Angeles County. Restaurants will be forced to re-close their dining rooms for at least three weeks, Eater said. Establishments will thus go back to being takeout and delivery services.

Here’s a quick summary from The New York Times documenting the latest notable news on re-openings (or not):

New York City reversed course Wednesday and decided not to let its restaurants resume indoor service next week as originally planned. Miami-Dade County, which had already decided to close its beaches over the sweltering July 4 weekend, said that hotel pools and their lively outdoor bars would be forced to close each night at 8 p.m. And California shut down bars and halted indoor dining at restaurants in 19 counties that are home to more than 70 percent of the state’s population.

California reported its largest-ever daily rise in cases at 9,740. The jump was nearly double the seven-day average. Arizona too reported a record number of new cases at 4,878. Pennsylvania is mandating residents wear masks.

In the Houston area, there were 1,350 patients in ICU wards on Tuesday evening. The system has a capacity of 1,330 ICU beds. That math doesn’t work.

As ever, the main question is whether these demonstrably large spikes presage a rise in fatalities. Deutsche Bank notes that “on some metrics, the coronavirus death rate has halved since mid-April in the US. To wit, from a note dated Tuesday:

We focus on the deaths / currently hospitalized (7-day lead) ratio. Outside of China, the median time spent in hospitals due to COVID is 5 days with an interquartile range of 3-9 days. To reduce the potential week-end distortions, we allow for a 7-day lead between “currently hospitalized” and deaths. While, “currently hospitalized” in TX, NY and CA have diverged materially, the deaths / currently hospitalized (7-day lead) ratio is similar across the 3 states. South Carolina and Arizona also exhibit a similar death rate. The population weighted average over the states that have provided consistent statistics since mid-April is currently in a 1-2% range vs. 3-4% range in the second half of April.

Late Wednesday, a hodgepodge of headlines from a mostly farcical Fox interview with Trump hit the tape.

He claimed the economy is coming back “in a strong fashion, with a ‘V'”. “Retail sales are at a record number, especially when you talk about increase”, the president stammered, employing his awkward brand of English.

“I think we’re gonna be very good with the coronavirus”, he remarked. “I think that at some point that’s going to sort of just disappear, I hope”.

“You still believe so?”, the interviewer asked. “Well, I do”, Trump responded.

That approach is probably not viable.

Trump also said he’ll be meeting with Mitch McConnell to talk about next steps on more relief spending. He repeated that he supports more direct aid for families and individuals. In fact, he suggested he wants to send out more money than Democrats.

On Jerome Powell, the president said that while he was “not happy with him at the beginning”, he’s now “very happy with his performance”. Powell has really stepped up to the plate, Trump gushed.

As for Joe Biden, the president said stocks would crash if the former vice president wins in November.