🚨 Code red

Delivered on By Justin Pyvis

Good morning! Surely today is the day; the day that the government finally makes a decision on the future of “Novax” Djokovic, who is now being investigated in multiple countries for various immigration and COVID-19 violations.

The long-running drama took yet another turn yesterday after Spanish media reported its government was investigating how Djokovic entered their country before flying to Australia, only for the Spanish government itself to state “the news is false”, clearly wanting to play no part in the mess surrounding the world #1 (smart move).

But Djokovic is being investigated in his home country of Serbia, where as a public figure he may have to serve community service (instead of jail or a fine) after the Serbian Prime Minister “warned his behaviour appeared to be ‘a clear breach’ of the rules”.

Meanwhile Djokovic was officially drawn in the Australian Open, creating a situation where if his visa is cancelled again and his lawyers file an injunction (as they likely would) to set up a trial next week, a decision against the Serb “would result in his deportation mid-way through the Australian Open”.

Riveting stuff. Incidentally, punters aren’t too fazed – bookies still have Djokovic as the favourite to take out the tournament.


Markets

Daily % change

AUD/USD

72.9

0.0%

AUD/CNY

4.63

0.0%

AU Bond

1.81

-1.6%

US Bond

1.71

-0.8%

ASX200

7,474

+0.5%

S&P500

4,677

-0.9%

Brent (bbl)

83.9

-0.8%

Gold (oz)

1,821

-0.3%

Iron ore (t)

127.6

-3.6%

Bitcoin

42,594

-2.6%

Ethereum

3,260

-3.5%

Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries. The S&P500 is a snapshot 30 minutes before close.

At the time of writing theΒ US S&P500Β was down 0.9% after initial jobless claims unexpectedly jumped to 230,000, the most since mid-November. State-based job insurance claims also increased for a second consecutive week to the highest in two months, “suggesting that the recent surge in Covid-19 cases could be leading to dismissals”.

Tech was hit particularly hard (-2.2% at the time of writing), after dovish Fed governor Lael Brainard signalled that interest rate hikes could come “as soon as” its bond purchasing programme winds down, which is due to occur in March.

Locally, theΒ ASX200 gained 0.48% with materials (+2.6%) the star thanks to iron ore prices hitting a 3-month high on the back of heavy rains in southeastern Brazil, which have hampered iron ore giant Vale’s ability to produce ore in the region.

A notable mover was Crown Resorts, which had a solid day (+8.8%) after Blackstone increased its takeover offer by nearly 5% and the board unanimously recommended that it be accepted.


Food for thought

Sigh... The toilet paper crisis is happening all over again.
Sigh... The toilet paper crisis is happening all over again. Source

Supply chain issues, worker shortages, empty shelves at the supermarket (yep, toilet paper is being rationed again)… it has all officially arrived in Australia, with the managing director of Melbourne’s Chapel Street Precinct calling it “a code red for retail right now”.

Burger joints are reporting over 35% of their staff either have or have had COVID-19, homebuilders are experiencing staff shortages of up to 25%, and logistics operators are claiming between a third and half of their workforce are missing each day due to COVID illness or isolation requirements. Job openings hit an all-time high 396,100 in November 2021, an increase of 18.5% from August 2021 – and that was before the πŸ’© really hit the fan.

Then there’s the shortage of rapid antigen tests (RATs), which in September 2021 the federal government said was “an important additional protection for Australians”, but… didn’t think to order any?*

We wrote about how important RATs would be back in August 2021, but that “Unless the ‘medical-regulatory complex’ gets a political kick up the backside and starts considering trade-offs as part of its decision making process, Australia will remain several steps behind the virus.”

That kick never happened and so here we are, chasing our own tail yet again.

The good news is that the cause of these ailments is quite simple: demand has been juiced by strong government spending, relatively easy money and the usual panic buying of certain essentials. But at the same time supply has been curtailed by people voluntarily withdrawing from the workforce due to fear of Omicron, along with forcible withdrawals due to government testing and isolation rules, including for those deemed close contacts.

While the problems were entirely foreseeable by anyone looking at what happened overseas, governments rarely change the rules pre-emptively, preferring to wait for chaos to ensue before acting as saviours (“no one could have predicted xyz… but we’re here to help”).

And that’s exactly what happened at yesterday’s national cabinet, with the isolation exemption expanded from front-line health and food distribution workers to include transport and freight workers, along with “all non-public facing healthcare and support workers, emergency services, teachers and childcare workers and energy and waste management workers”.

By the end of the month it could well be that everyone except bureaucrats and politicians will be exempt from isolation rules. πŸ™ƒ

* In Western Australia RATs were only legalised earlier this week, which meant pharmacies weren’t permitted to order any in preparation for the state’s reopening. Good luck with that!


Still hungry?

πŸ›‚ WA’s government will introduce the nation’s broadest vaccination passport on 31 January, requiring it to visit hospitals, aged care, all hospitality venues (e.g. restaurants, cafes, bars, pubs, clubs, nightclubs), museums, the zoo, gyms, bottle shops and the casino.

🧳 Queensland’s border restrictions will be removed on Saturday with the state expected to hit 90% fully vaccinated next week.

🎾 The Victorian government capped attendance at the Australian Open to 50% of capacity but will honour any tickets sold to a session that has already sold above that level.

πŸ¦— Australia dropped struggling opener Marcus Harris for the in-form Usman Khawaja ahead of today’s fifth and final Ashes test in Hobart.

πŸ›’ Woolworths joined Coles by introducing product limits across the country as a “precautionary move”. Those in ‘COVID-free’ WA were hit with additional restrictions on meat products “due to signs of excessive buying”.

🦠 Bernard Tomic tested positive to COVID-19 after his first-round exit from the Australian Open qualifiers, during which he told the umpire “For sure in the next two days I will test positive… I will buy you dinner if I don’t test positive in three days. Otherwise you buy me dinner. I cannot believe nobody is getting tested.”

🌑️ Onslow, WA hit 50.7C yesterday, the equal hottest temperature ever officially recorded in Australia, tying the record set by Oodnadatta, SA on 2 January 1960.

πŸ’° Billionaire investor Bill Miller now holds 50% of his net worth in Bitcoin and related investments in major industry firms, describing it as an “insurance policy against a financial catastrophe”.

πŸ’³ China’s leading digital payment firms, Alipay and WeChat Pay, are banned from use at the Beijing Olympics, with only cash and the e-CNY accepted. Visitors will have to use vending machines to exchange currency for e-CNY loaded onto temporary debit cards.

πŸ’‰ Canada’s government ditched a planned vaccine mandate for truck drivers crossing the border from the US, after people worried “it could result in driver shortages, disrupt trade and drive up inflation”.

πŸ₯ France’s Senate voted to transform the country’s health pass into a stricter “vaccine pass”, which “will be required… to access restaurants and bars, cultural venues, or interregional public transport”.

πŸŽ– Prince Andrew was stripped of his military titles and royal patronages and will defend the sexual assault charges made against him “as a private citizen”.

😷 The British government cut its isolation requirements from 7 to 5 days, “as a way to reduce staffing pressures in some sectors”.

πŸ‘©β€βš–οΈ The US Supreme Court ruled against President Joe Biden’s vaccination-or-testing mandate for large businesses, “while allowing his administration to enforce its separate vaccine requirement for healthcare facilities”.