Delivered on

Falling further behind

Good morning! A vaccine shortage is not longer the reason for Australia's slow rollout (by international standards), with New South Wales Deputy Premier John Barilaro saying that "here in NSW one of my greatest concerns is that people aren't rolling up to get vaccinated... we have capacity and we have more vaccines than demand. And that's because in NSW we are living in a period of normal [because] the reality is there is no virus and there is complacency".

Possibly. Or it's because the government (not just Australia's government, to be fair) undermined the public's confidence in Australia's only available vaccine, AstraZeneca. That and the lack of domestic COVID-19 means many people are probably waiting for the promised Pfizer doses to arrive.

Market Wrap

Daily % change

AUD/USD

77.6

0.5%

10Y Bond

1.68

-0.8%

ASX200

7,029

0.0%

Brent (bbl)

67.5

1.1%

Gold (oz)

1,793

1.4%

Iron ore (t)

183.6

-0.4%

Bitcoin

56,975

0.1%

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

The S&P500 (+0.27%) started May the right way, after April finished up as the best performing month since November. Locally, the ASX200 closed marginally higher after a big earnings report from Westpac (see below).

Housing boom: According to CoreLogic, every capital city and regional market continued to see prices rise over April. Property values were up 1.8% through the month, down from 2.8% in March (which was the biggest increase since 1988). The RBA's rate cuts are doing their job: the 0.5 percentage point decline in mortgage interest rates since February 2020 effectively gave buyers an extra 14.5% in borrowing power. However, with the cash rate at 0.1% it's hard to see mortgage rates going much lower, meaning the growth party may be close to petering out (especially if supply responds and the population continues to decline).

Not your usual recession: Westpac reported a 189% increase in first-half net profit (from a low base), with cash earnings tripling. It cut $2.6 billion worth of new mortgages over the past 6 months, driven entirely by owner-occupiers.

Crypto rising: The price of ether – the cryptocurrency used by the Ethereum blockchain, the second-largest by market cap – broke $US3,000 for the first time ever yesterday. It now has a market cap of about $US350 billion, which is more than Bank of America or Disney.


Corona Wrap

Falling further behind

We thought we'd provide an update on how Australia is tracking in terms of vaccinating the population against COVID-19. TL;DR: Not well.

Falling further behind: Australia ranks 80th in the world and daily vaccinations have plateaued to around 40-60,000 per day. If we split the difference and assume 50,000, it would take roughly 755 days to administer two doses to every remaining Australian adult (around 18.9 million). In other words, at this rate Australia's adult population will not be fully vaccinated until May 2023.

The rate will increase: Despite the many, many inefficiencies in the vaccine rollout, it will speed up with time. The US now has more vaccines than it needs and late last week Pfizer – for the first time – started exporting doses from its US plant. Given the government's decision to recommend against administering the AstraZeneca vaccine to people aged under 50 and lack of orders for other vaccines, Australia's rollout is now largely out of its control, at least until Victoria's mRNA facility is up and running.


The Wrap Up

  • Budget 2021-22: "Friday's [iron ore] spot price of $US191.60 would add $36 billion to budget forecasts if continued over the 18 months that Vale needs to rebuild from catastrophic dam disasters."
  • China's digital currency is only a threat if you're Chinese – "[China's] digital currency is going to allow for a lot more collection of data, which goes with the Chinese Communist Party's desire to have a more data-driven economy, to collect more data and to use it for monetary policy, but to also to use it for analysis and even surveillance."
  • Billionaire Gerry Harvey (the founder of Harvey Norman), who has previously called Amazon a "parasite" that "contributes nothing to society" due to its tax-dodging ways, will not repay approximately $20 million in JobKeeper subsidies that his company did not need.
  • New Zealand is "grappling with" the issue of China, with Prime Minister Ardern saying the differences between the two countries were becoming "harder to reconcile".
  • This is old news now (sorry) but billionaire investor Warren Buffet highlighted a few risks during Berkshire Hathaway's annual meeting on the weekend, noting that "It's almost a buying frenzy. People have money in their pocket and they're paying higher prices." He added that many firms, including Berkshire, have started raising price as there is more inflation "than people would have anticipated six months ago".
  • Defence Minister Peter Dutton confirmed that he asked his department to "come back with some advice" regarding a contentious lease to a Chinese company of the Darwin port, which is located close to a US Marines base.
  • Taiwan became the latest country to ban travel to people who have been to India over the past 14 days (except for Taiwanese citizens).
  • Downloads of Clubhouse continue to fall, with just 922,000 in April. Clubhouse recently raised money at a $US4 billion valuation.
  • Bill and Melinda Gates are getting divorced after 27 years of marriage.

Falling further behind was brought to you by Justin Pyvis. Forwarded this issue? Click here to subscribe.