The metaverse
By Justin Pyvis – Delivered on 01 Nov 2021

Good morning! Today's the day – Australia's international border is officially open once again, although if you're planning a trip you'll only be able to return to New South Wales and Victoria.

Speaking of borders, the Hermit State (WA) tightened restrictions further by requiring travellers from NSW, VIC and the ACT to be fully vaccinated, "with other states likely to follow suit... once borders come down and other states start allowing Victoria, NSW and the ACT travellers to enter".

Perhaps as a sign of how the vaccine shortage has quickly moved to surplus, WA also made Pfizer booster shots available from today (no appointment required) for those who had their second dose over 6 months ago, with NSW to do the same from next week.

Speaking of NSW, the state government is reportedly considering "pushing back the reopening date for unvaccinated people in a bid to boost the state's inoculation coverage, with senior ministers now eyeing a potential double-dose rate of 95%".

No doubt everyone is eyeing off the ACT, which has an enviable 99.3% first dose take-up (people aged 12+).

Fully vaccinated population (aged 12+)

ACT
NSW
VIC
TAS
SA
QLD
NT
WA
Markets

Daily % change

AUD/USD

75.3

-0.1%

AU Yield (%)

1.95

-0.3%

US Yield (%)

1.56

-0.7%

ASX200

7,324

-1.4%

S&P500

4,605

+0.2%

Brent (bbl)

84.4

-0.2%

Gold (oz)

1,785

-0.9%

Iron ore (t)

104.0

-6.1%

Bitcoin

60,966

-1.4%

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 0.19% on Friday despite falls to Apple (-1.8%) and Amazon (-2.2%), which dropped on disappointing earnings reports. Amazon also warned that its entire fourth-quarter profit could be wiped out due to "labour supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs".

Locally, the ASX200 plunged 1.44% with every sector finishing in the red as the risk of a rate hike being pulled forward increased after the RBA again failed to defend its 0.1% target on the April 2024 bond, which shot up to 0.775%. A notable mover was ambitious lithium play Vulcan Energy, which fell 16.5% after it emerged from a trading halt induced by a short seller calling it the "God of Empty Promises".

Economy

Spending freedom: Retail sales in Australia increased 1.3% in September, the first rise since May "as some restrictions were eased or lifted" in NSW, with only locked-down VIC and the ACT reporting declining sales.

China still slowing: The official gauge of factory activity in China, the NBS PMI, showed a second straight monthly contraction in October. At just 49.2, it was the lowest reading since the outbreak of the pandemic in February 2020 (a reading under 50 indicates a contraction from the prior month).

Officials at the statistics bureau blamed "the power shortage and soaring raw material prices" for the decline, as China's government continues to meddle in the sector to achieve energy-efficiency targets and to clear the skies ahead of the Beijing Winter Olympics.

Red, red hot: Prices in the euro area rose 4.1% in October from a year earlier, with core inflation (which excludes energy and food) hitting 2.1%, the highest in nearly two decades. ECB President Christine Lagarde insists it's still "transitory", despite revising "its inflation projections upward the last five times" it met.

Speaking of transitory...: It seems some of that "transitory" inflation might be becoming stickier, as US employers boosted wages by the most on record in the third quarter. Meanwhile, consumer spending jumped 0.6% in September and the core PCE index, the Fed's preferred inflation measure, increased 3.6% for a fourth straight month.

Already in recession?: A new paper by professors at Dartmouth College and University College London argues that "downward movements in consumer expectations in the last six months suggest the economy in the United States is entering recession now (Autumn 2021) even though employment and wage growth figures suggest otherwise".

Feature
The metaverse

Last week, Facebook – the scandal-ridden company that owns Facebook, Instagram and WhatsApp – renamed itself "Meta", to better reflect its goal of being "a company that builds technology to connect people and the metaverse is the next frontier, just like social networking was when we got started".

Stepping back: The 'metaverse' is straight out of science fiction – Neal Stephenson's 1992 novel Snow Crash, to be precise – and describes "a virtual reality-based successor to the internet... where humans, as avatars, interact with each other and software agents, in a three-dimensional virtual space that uses the metaphor of the real world".

Why this matters: A lot of money is being thrown at the metaverse. Facebook (now Meta) has committed to spend at least $US10 billion this year alone, and both Microsoft and the creator of Fortnite, Epic Games, are also investing in this space.

Looking forward: Expect to get blasted with advertising spruiking the metaverse as the greatest thing since sliced bread (and more cringe videos of Mark Zuckerberg living in it), but really it's just parts of the internet (say, Zoom meetings) experienced through virtual/augmented reality instead of a computer monitor.

However, a metaverse built by Facebook sounds like a living nightmare to us. Virtual offices, meetings, gatherings that you can't escape, all under the watchful eye of Mark Zuckerberg who will ensure it's overflowing with product placements to help pay for it all (or a hefty monthly subscription).

If Meta creates the metaverse, you can count us out.

The Wrap Up
    🚗Australia's shadow attorney-general Tim Smith resigned from the shadow cabinet on Sunday after being caught drink driving.
    🦗England embarrassed Australia in the T20 World Cup, chasing down a meagre total of 125 with 50 balls to spare and eight wickets in hand.
    👮‍♂️You can take the player out of Collingwood... Jordan De Goey was charged with assault and forcible touching by the New York City Police Department over an alleged incident that took place early on Saturday morning.
    🏡Australia will increasingly look to treat COVID-19 patients at home rather than in the hospital, with most cases expected to be less severe now that the national vaccination rate is approaching 80%.
    🕊️Australian television icon Bert Newton died on the weekend and will receive a Victorian state funeral.
    🥝Anyone in New Zealand is now allowed to travel to Australia quarantine-free "to jurisdictions that are ready", provided they have been there for 14 days prior to departure.
    🌐Every G20 government signed off on a global minimum corporate tax rate of 15%.
    🏉A pitch invader managed to sneak onto the field and line up with the All Blacks for the start of the national anthems.
    🏭The G20 agreed to reach carbon neutrality by "around mid-century", and to also end public financing for coal-fired power generation abroad.
    ☢️Asked if he believed ScoMo lied to him over the submarine deal, France's President Emmanuel Macron said "I don't think, I know".
    🗳️US President Joe Biden's approval rating has fallen to 42%, lower than any other modern first-year president's approval at a similar point in time, excluding Donald Trump.
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