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The attention recession

Good morning! It was a relatively quiet day on the pandemic front yesterday, with every state now out of lockdown except for New South Wales, where 18 new community cases were discovered (only 7 that weren't already isolating).

All eyes will now be on NSW Premier Gladys Berejiklian, who is expected to announce that the Greater Sydney lockdown will be extended for an additional week from Friday. 😞

Markets

Daily % change

AUD/USD

74.9

-0.7%

10Y Bond

1.39

-4.8%

ASX200

7,262

-0.7%

Brent (bbl)

74.9

-3.0%

Gold (oz)

1,797

+0.3%

Iron ore (t)

208.9

+0.1%

Bitcoin

33,961

+0.4%

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

In the first day of trading following a long weekend, the US S&P500 was largely flat, snapping its 7-day winning streak with a small decline of 0.20%. Locally the ASX200 fell 0.73% following the RBA's relatively hawkish statement (see below), with the monetary easing cycle over and a tightening phase inching into the equation.

Holding the line, sort of: The RBA Board decided to keep the cash rate on hold yesterday and committed to maintaining its government bond buying programme at a slightly reduced rate "of $A4 billion a week [down from $A5 billion] until at least mid November". It also maintained its view that inflation "sustainably within the 2 to 3 per cent target range... will not be met before 2024", despite conceding that the economic recovery "is stronger than earlier expected and is forecast to continue", and "an increase in the cash rate depends upon the data, not the date".

OPEC indecision: The price of Brent crude oil briefly hit its highest level since 2018 after OPEC+ (an oil cartel representing over 50% of global oil supply) failed to come to an agreement on increasing oil production. The disagreement was with the UAE, which was pushing to increase its share of production in line with its higher output capabilities. Prices subsequently fell after people realised that no deal means many OPEC members, including the UAE, will probably go rogue and increase production anyway.


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Feature

The attention recession

Chart showing the correlation between the Economist's normalcy index and vaccination rates.
Activity in many countries is normalising with vaccinations. The Economist

The latest edition of the Economist magazine had a feature on the so-called attention recession. By that it means the inevitable come-down for businesses that profited from a year of people being "glued to screens" and the accompanying increased "consumption of everything from books and podcasts to music and video games".

Stepping back: According to the Economist, the average full-time worker gained about 15% more spare time during the pandemic at the same time as spending on recreational activities such as sports, theme parks and holidays fell by 30%. So what did people do with their spare time? They gamed (an extra hour per week), watched videos (+80 minutes a week) and listened to music (+5%) or podcasts and audiobooks (+25%). Four in ten people also spent more time reading books, especially young people.

Why this matters: The Economist notes that many of the attention boom sectors have started to fade lately as "governments in many rich countries are starting to lift stay-at-home orders, and people are venturing back out". Cable TV viewing is falling faster than ever and even streaming services such as Netflix and Disney+ disappointed in the first quarter of the year.

Looking forward: The big question is how many of the attention boom sectors will become "sticky habits"? The Economist believes the stickiest "appears to be gaming", which is "showing no sign of falling away as life gets back to normal". Social media also appears to be well-placed, and "with people able to meet more in person, it may indeed increase". Finally there's online dating, which suffered during the depths of the pandemic but this year sign-ups are 10% higher than they were before the pandemic, with Match Group (the owner of dating app Tinder) telling investors to look forward to a "summer of love".


The Wrap Up

  • 🏎️ In the latest blow to Melbourne, the October Moto GP and November Formula 1 GP were cancelled "after long negotiations over a quarantine hub for drivers broke down". Australia could lose all of its major events to vaccinated countries this year.
  • 🏅 It's now just 16 days until the Tokyo Olympics, with about 90,000 international athletes, support teams and journos expected to arrive soon. Over 110,000 local volunteers will also take part, along with accommodation staff, drivers and media. Yet just 23% of the Japanese population have received a first dose of a COVID-19 vaccine. This could get very interesting 🍿.
  • 💉 From Alabama: 94% of patients hospitalised with COVID-19 are unvaccinated.
  • 😴 Brewing giant Coors experimented with "targeted dream incubation" to trigger "refreshing dreams" of Coors. Why not just make a decent beer?
  • 🕵️‍♀️ The Australian government will not release details of its agreement with AstraZeneca because doing so would apparently cause "real and substantial risk" to national security.
  • 🆓 From 19 July the UK will abolish mask mandates and social distancing requirements, with stadiums returned to full capacity.

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