Gottlieb sees colleges in fall, EU to reopen

Investors and health officials appear to grow increasingly worried about a potential second wave of Covid-19 cases and further economic downturn as states and foreign governments move ahead with lifting restrictions. Stocks sold off  Tuesday, with the Dow shedding roughly 400 points in the final hour of trading and the Nasdaq Composite and S&P 500 falling more than 2%. Early data out of U.S. states that are most aggressively reopening indicate heightened virus spread, according to former FDA Commissioner Dr. Scott Gottlieb.  

This is CNBC’s live blog covering all the latest news on the coronavirus outbreak. All times below are in Eastern time. This blog will be updated throughout the day as the news breaks. 

  • Global cases: More than 4.2 million
  • Global deaths: At least 292,316
  • US cases: More than 1.3 million
  • US deaths: At least 82,389

The data above was compiled by Johns Hopkins University.

9:51 am: Mexico reopening auto industry

A potential parts shortage from Mexico for automakers reopening U.S. plants is expected to have been diverted.

Mexican President Andres Manuel Lopez Obrador is expected to lay out a road  map for the country to reopen its economy, with a focus on the automotive sector, according to Reuters. Some Mexican auto factories are due to open as soon as Monday, in line with large U.S. assembly plants for the Detroit automakers.

Despite President Donald Trump’s “America First” policies and signing of the USMCA trade deal, which goes into effect July 1, the American auto industry relies heavily on Mexico for parts and vehicle production. At $93 billion, vehicles were the top import to the U.S. from Mexico in 2018, according to federal data. The Center for Automotive Research reports $60.8 billion, or 39% of auto parts used in the U.S., were imported from Mexico in 2019. —Michael Wayland

9:36 am: Dow falls 200 points as Powell sees ‘significant downside risks’ 

Stocks opened lower as investors digest downbeat remarks from Federal Reserve Fed Chairman Jerome Powell. The Dow Jones Industrial Average dipped 220 points, or 0.95%. The S&P 500 traded 0.8% lower while the Nasdaq Composite slid 0.5%. Powell’s remarks came after the Labor Department reported last week that a record 20.5 million jobs were lost in April.

Read updates on market activity from CNBC’s Fred Imbert and Maggie Fitzgerald. —Melodie Warner

9:30 am: Economists predict coronavirus will reverse globalization and create regional supply chains

The coronavirus crisis will fundamentally reshape global trade as businesses look to reduce their dependence on Chinese manufacturing, according to the Economist Intelligence Unit.

In a new report, the EIU predicted globalization would be reversed after the pandemic, with regional supply chains becoming the norm. Companies would be inclined to relocate their supply chains closer to home following the supply shock from the Covid-19 outbreak, analysts said.

Because of the difficulties surrounding establishing or moving of supply chains — particularly in the automotive sector — the EIU said it was likely that any major shifts would be permanent. —Chloe Taylor

9:11 am: April US producer prices see largest annual decline since 2015

U.S. producer prices declined 1.3% in April after slipping 0.2% in March, bolstering some economists’ predictions for a brief period of deflation as the coronavirus pandemic depresses demand.

The Labor Department said Wednesday its producer price index for final demand declined 1.2% in the 12 months through April. That was the biggest decline since November 2015 and followed a 0.7% increase in March.

Economists polled by Reuters had forecast the PPI falling 0.5% in April and falling 0.2% on a year-on-year basis. —Melodie Warner, Reuters

8:53 am: Hot spots of new cases predominate East Coast 

8:32 am: Former FDA chief sees colleges reopening in the fall

Former FDA Commissioner Scott Gottlieb told CNBC he believes colleges and universities in the U.S. could welcome students back to campus for the next academic period.

“I think we’ll be in a position where we’re going to give a try at opening schools, opening residential college campuses in the fall because I’m hopeful that coming off of July and August, we’re going to see some declines in cases in the summer,” he said on “Squawk Box.”

White House health advisor Dr. Anthony Fauci on Tuesday cautioned higher education leaders against believing that a Covid-19 vaccine or effective therapeutic would be available by the fall. —Kevin Stankiewicz

Disclosure: Scott Gottlieb is a CNBC contributor and is a member of the boards of Pfizer and biotech company Illumina.

8:12 am: LabCorp CEO on ramping up production of at-home tests

7:25 am: Merkel urges Germans not to jeopardize progress

German Chancellor Angela Merkel speaks at the 100-years anniversary celebration of prosthesis maker Ottobock SE in Duderstadt, Germany, February 18, 2019.

Ralph Orlowski | Reuters

Chancellor Angela Merkel urged Germans not to jeopardize progress the country has made in beating back the outbreak, warning that the virus will be present for longer, Reuters reported.

Germany and some other European countries have begun to ease restrictions and reopen nonessential businesses.

The coronavirus has infected more than 173,274 people in Germany and killed at least 7,755, according to Johns Hopkins University.

“It would be depressing if we have to return to restrictions that we want to leave behind us because we want too much too soon,” Merkel told the Bundestag lower house of parliament, according to Reuters.

Germany has managed to maintain a low mortality rate compared with some other European countries such as Spain and Italy, due in part to Germany’s decision to implement widespread testing of people suspected to have the virus. Italy and the U.K., for example, only test symptomatic cases. —Will Feuer

7:18 am: Europe eager to reopen borders to salvage tourism in time for summer

The European Union is eager to reopen borders within the 27-country bloc as soon as possible in order to help the region’s lucrative tourism sector recover in time for the summer season.

The bloc is due to present draft proposals on Wednesday that will urge a return to “unrestricted free movement,” although it is wary of a second wave of infections in the region, according to Reuters.

Airlines and airports would insist that passengers wear masks, but there is no need to leave the middle seat empty on planes, the draft proposals said. People should be able to stay in hotels, eat in restaurants or go to beaches safely, the draft added.

It is not clear whether non-Europeans would be allowed to visit this summer, with the European Commission reportedly saying: “Domestic and intra-EU tourism will prevail in the short-term.” —Holly Ellyatt

Read CNBC’s coverage from CNBC’s Asia-Pacific and Europe teams overnight here: Spain daily death toll slow to decline; Tui travel firm plans up to 8,000 job cuts

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