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About those self-driving cars

Good morning! Yesterday the Commonwealth stumped up some cash for workers affected by Victoria's two-week lockdown, unveiling a scheme called the Temporary COVID Disaster Payment.

Seems reasonable to us, given that Victoria is only in a lockdown because the Commonwealth botched the vaccine rollout and opted out of its constitutional obligation to quarantine arrivals, forcing states to persist with poorly ventilated inner city hotels.

Please note that this will be our last update until Tuesday, as we're taking Monday off for WA Day.

Markets

Daily % change

AUD/USD

76.6

-1.2%

10Y Bond

1.62

-1.3%

ASX200

7,260

0.6%

Brent (bbl)

71.4

0.1%

Gold (oz)

1,873

-2.0%

Iron ore (t)

200.8

1.4%

Bitcoin

38,616

2.4%

Note: Brent oil, gold bullion and iron ore prices are the second futures contract.

US stocks fell overnight, with the S&P500 down 0.36% and the tech-heavy Nasdaq dropping 1.03% following Big Tech losses, with Apple, Google, Facebook, and Amazon all down at least 1% and Tesla falling 5.3%.

Local markets set a fresh record high, with the ASX200 rising 0.59%. However, the Aussie dollar plunged over 1% last night on the back of US dollar strength, with positive US jobs data "renewing chatter that the US Federal Reserve may be forced to tighten monetary policy... sooner than it has been messaging".

Retail unchanged: Retail sales data for April were released yesterday but were unchanged from the preliminary release, so if you're interested you can check out our thoughts on that here.

US jobs: US initial jobless claims fell to 385,000 last week (down 20,000), the first time they've been below 400,000 since the pandemic began. In further positive news, a monthly payroll report produced by ADP showed businesses added 978,000 jobs through May, well above the 680,000 estimated. The all-important official non-farm payroll data are due to be released tonight.

China services slowdown: Business confidence dipped to a four-month low in China's services sector, with the expansion slowing to 55.1 in May from 56.3 in April, according to the Caixin China services PMI. A reading above 50 indicates expansion. The survey also noted inflationary pressures, after "input costs rose at the steepest pace since November amid reports of higher prices for raw materials, energy, staff and transport. As part of efforts to alleviate cost burdens, the firms raised output prices at the steepest rate this year".


Analysis

About those self-driving cars

The five levels of automation.
We're barely half way. United States Department of Transportation

Germany has started creating designated lanes for robotic vehicles with no drivers onboard. This is the future of automated driving, as we're still a long way off full automation.

Stepping back: We've been promised self-driving vehicles for decades (and flying cars!). But there are 5 levels of automation, from level 1 (assisted) all the way to level 5 (full automation). We're not even close to level 5.

Despite claims to the contrary made by a certain eccentric billionaire, tech such as Tesla's Autopilot is only at level 2-3 (partial or conditional automation). It could be a long time before we see anything approaching level 5, then several more years before that goes mainstream.

Time to build: That means there's plenty of time to construct infrastructure such as designated highway lanes for autonomous (level 3) vehicles. As Matt Beane wrote on twitter, it's far "easier to engineer the environment - socially and physically - for a robot than the other way around".

Designated highway lanes don't require robots to be able to improvise on the spot like a Musk robotaxi might, and transport planners have plenty of experience designing similar spaces for buses and trains. Other areas where automated vehicles show promise are in warehouses and on mining sites, because the environment is largely controlled unlike on a metropolitan road.


The Wrap Up

  • The Commonwealth government will support Victoria's planned 500-bed purpose-built quarantine facility at Mickleham in Melbourne's north.
  • The WA government is considering using Rottnest island as a quarantine facility once again, following Tuesday's infection in the Pan Pacific Hotel. The WA president of the Australian Medical Association said even dongas in his backyard would be preferable to the existing quarantine hotel system. 😂
  • Moderna – producer of one of the two currently available mRNA vaccines – said a 50-microgram version of its vaccine (half the current 100-micrograms) helped protect against emerging virus variants.
  • [Long read]: How Amateur Sleuths Broke the Wuhan Lab Story and Embarrassed the Media.
  • The UK has "started commercial negotiations with AstraZeneca to secure a variant vaccine: future supplies of the Oxford/AstraZeneca vaccine that have been adapted to tackle the B.1351 variant first found in South Africa".
  • Canada approved the use of Pfizer or Moderna as the second dose for people who have already received a single AstraZeneca dose (~2 million Canadians before usage was halted).
  • The United States will donate 75% of its spare COVID-19 vaccine doses to Covax, with 25% shared directly with countries experiencing surges.
  • Following the release of Anthony Fauci's emails via a freedom of information act request, Donald Trump wrote: "China should pay $10 trillion to America, and the World, for the death and destruction they have caused! There are a lot of questions that must be answered by Dr Fauci".
  • Apple employees will have to work in the office three days a week starting in early September.
  • According to the Washington Post, "Biden's actual spending plans are nearly double those outlined in his budget — which is already the highest level of proposed spending since the Second World War."
  • Alex Tabarrok on Twitter: "You would have done much better investing in Dogecoin this year than in Pfizer. I can't tell you how depressing this is."
  • Huawei has officially replaced Android with its new HarmonyOS, which has a "nearly identical code base" to Android (+Chinese government spyware).

About those self-driving cars was brought to you by Justin Pyvis. Forwarded this issue? Click here to subscribe.