Back to normal
By Justin Pyvis – Delivered on 27 Oct 2021

Good morning! South Australia's Premier Steven Marshall unveiled his state's detailed reopening plan yesterday, confirming prior statements that domestic border restrictions will be removed on 23 November for those fully vaccinated. Once the state reaches a 90% double vaxxed rate – which Marshall hopes to "achieve before Christmas this year" – the "vast majority" of restrictions in SA will be removed.

Moving on, another week, another COVID-19 scare in Queensland. This time it was an unvaccinated 17-year-old from the Gold Coast who reported to an emergency department complaining a headache but was in fact COVID-19 positive. The teenager was a close contact of a traveller from NSW, with Premier Annastacia Palaszczuk not sure "how that person arrived in Queensland".

The Queensland border seems to have been especially porous of late – better get that vax rate up!

P.S. You can now click a state or territory's vaccination bubble below for a quick link to their respective reopening plans.

Fully vaccinated population (aged 12+)

ACT
NSW
VIC
TAS
SA
NT
QLD
WA
Markets

Daily % change

AUD/USD

75.0

0.0%

AU Yield (%)

1.80

+1.9%

US Yield (%)

1.62

-1.0%

ASX200

7,443

+0.0%

S&P500

4,575

+0.2%

Brent (bbl)

86.4

+0.6%

Gold (oz)

1,796

-0.7%

Iron ore (t)

121.7

+3.0%

Bitcoin

62,290

-0.7%

Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries.

The US S&P500 added 0.18% overnight to hit a new record high as positive corporate earnings results continued to support valuations, the latest being UPS (+6.8%) which performed "better than anticipated" with a 9.2% increase in revenue and 23.4% rise in operating profit. Markets were also buoyed by a rise in US consumer confidence in October, which picked up despite short-term inflation concerns rising to a 13-year high.

Locally, the ASX200 inched up 0.03% as tech followed Wall Street's lead higher to finish up 1.3%.

The day's worst performer was Mineral Resources (-7.0%), which erased almost all of its gains from the day before after it disclosed rising costs, lower lithium shipping volumes and an average iron ore price of $US78.3 per tonne in the three months to September, "a massive slump from the $US178 per tonne average received price in the three months to June". Mineral Resources sells relatively low grade ore, which tends to be discounted more heavily when demand eases.

Economy

Housing rebound: Sales of new US homes hit a six-month high in September, rising 14.0% from the prior month but down 17.6% from a year ago when the COVID-19 stimmy was in full force. Median new house price growth accelerated to 18.7% from a year ago, hitting a new record of $US408,800.

"The Australian Way": ScoMo released a somewhat light-on-details plan that he'll take to the Glasgow COP26 climate summit, claiming that Australia will "exceed our 2030 target with emissions reduction of up to 35% by 2030 [up from 26 to 28%]", before reaching net zero emissions by 2050.

Another one bites the dust: Just how contained is China's property crisis? Another developer, Modern Land China, missed a payment due on a $US250 million bond due to "unexpected liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment, the real estate industry environment and the COVID-19 pandemic faced by the group".

Restrictions bite: South Korea's economy grew by just 0.3% in the September quarter as the government's COVID-19 restrictions limited activity, causing private consumption to fall 0.3%. South Korea was slow in its vaccine procurement process but has already overtaken Australia with 70.2% of its population fully vaccinated, versus 60.4% in Australia. The government will transition to "living with COVID-19" in November, which should improve growth.

Feature
Back to normal

Australia may be reopening but what will life look like when this pandemic is but a distant memory? According to a new survey from the Committee for Sydney – "a think tank that represents organisations including universities, hospitality, construction and entertainment" – 'back to normal' might look quite different than it did pre-coronavirus.

Breaking it down: Committee for Sydney surveyed bosses of 130 organisations employing around 640,000 people across Australia (~5% of the total workforce). A full 87% of those surveyed said that "in the future" they expected people to work from home at least one day a week, with the most common response (51%) being three days working from home. Just 7% of employers wanted people back 5 days a week and another 5% were unsure.

Why this matters: An economy is basically just the word used to describe the various patterns of specialisation and trade between people in a country. A large disruption – e.g. a financial crisis – can render many of those patterns and specialisations obsolete.

If, as looks likely, the pandemic caused a lasting change to the work week then that will require a potentially costly adjustment for many businesses that were dependent on the pre-existing structure. Think corporate office space, public transport, coffee shops – not as much of it will be needed if there's a 40% decline in the Monday to Friday inner city workforce. Conversely, more services will probably be needed in the suburbs.

Looking forward: While technological advances and cultural shifts (e.g. the gradual retirement of the Baby Boomer generation) saw the pre-COVID trend slowly moving towards permitting flexible working options, the pandemic really accelerated the process. Such a rapid shift means governments will need to be careful they don't throw good money after bad supporting businesses and public services that were only sustainable under pre-existing patterns of exchange and specialisation.

The Wrap Up
    👨‍🚀Space tourism is a thing in part because the US "Federal Aviation Administration is prohibited from creating safety regulations for private spaceflights until October 2023".
    ✈️The US will lift its travel ban on Europe on 8 November but will require either proof of COVID-19 vaccination (mandatory for non-citizens) or a negative test within 24 hours of travel (currently 72 hours).
    👽Facebook CEO Mark Zuckerberg responded to the 'Facebook Files' for the first time, calling it "a coordinated effort to selectively use leaked documents to paint a false picture of our company".
    🦠This is just what the world needed: A flesh-eating donovanosis STI that causes "beefy red" ulcers has been steadily growing in the UK (although remains relatively rare).
    🏡According to Moody's, "Sydney will reach its worst housing affordability in 10 years if prices increase by 4.6% or if average mortgage lending rates rise by just 0.42 percentage points".
    👷‍♀️According to the US National Association of Business Economics, nearly half of respondents to a recent survey reported a shortage of skilled workers in the third quarter, up from an already-high 32% in the second quarter.
    🃏A Victorian royal commission found that the conduct of Crown Resorts was "disgraceful" but that it can keep its Victorian casino licence so long as it proves, over the next two years, "that it has reformed itself".
    ⛓️Victoria's proposed 120-page Pandemic Management Bill 2021 would see people jailed for up to 2 years if caught breaching health orders but "fails to distinguish between offence seriousness, meaning breaking a mask rule or breaking curfew is considered in the same way as failing to isolate".
    🙅‍♂️WA Premier Mark McGowan said "We'll get to a reunion with people in NSW and Victoria sometime in the first half of next year."
    🦗South Africa's former captain and current wicketkeeper pulled out of the team's T20 match last night over a dispute with Cricket South Africa's board after it issued "a directive to the national team for all players to kneel before the team's remaining T20 World Cup matches".
    🏙️Viruses would never leave: "The largest hotel in the world, with a staggering 10,000 rooms, is currently under construction in Saudi Arabia."
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