May 19, 2021 | Yup, it’s Here

Have you noticed value stocks are hot lately? WFH ones are not. There’s a reason for this. The pandemic is ending.

The reopening trade has pushed equity markets into record territory for months now. About 160 million Americans have been jabbed and this week Canada passed the 50% mark. Once vaccinations hit 70% or above, politicians will have a hard time convincing people current states of emergency, lockdowns, quarantines, restrictions, travel bans and border closures can stay in place. We’re close. A month or two? Maybe just weeks.

Investors always knew the pandemic would end, which is why financial markets have been in recovery mode since last summer (despite recent inflation-wary slides). The course of the next year is clear: reopening, bringing more employment, the unleashing of a torrent of household savings ($200 billion in Canada, $1.6 trillion in the US), expanding GDP, rising commodity prices, more inflation, increasing interest rates, surging corporate profits (a 50% jump) and market gains. Oh, and an end to WFH. Or close.

It’s coming. Quebec laid out is reopening timetable yesterday, with that cursed curfew being the first thing to go. Three-quarters of that province will be dosed by June 15th, they say.  Ontario will open outdoor facilities in a few days. Already downtown Toronto condo sales have lit up in anticipation. NYC will be fully open in a few weeks and the subways just resumed full service. In several US cities there are massive crowds at sporting events and concerts. Mask mandates are being dropped. Despite Wave Three keeping hospitals in Toronto full and the threat of a lurking Indian variant, there’s no mistake where this is all headed.

For five million of us little beavs (about a quarter of the workforce) this means a grand experiment in working-from-home will be reassessed by employers. Some will want to dump commercial real estate overhead and keep a remote workforce. Others will desire the creativity and culture of workplaces be restored. Some will go hybrid. Others will struggle with the issue of safety and mandatory vaccination. We haven’t had a public health emergency like this for a century, and never in an environment where everybody is online and connected. There are no rules.

For employees, this is a vexing time. Some are totally happy being home, flexible, unsupervised and self-disciplined. Plus you can live in sweats and indulge your dog. Others miss friends, colleagues and the social web of the workplace. Many are deathly sick of Zoom meetings and crave the collaboration and culture of an office full of peers. Stress, loneliness and a sense of isolation after a year of this have taken a toll. There’s concern that career advancement may be stymied by being distant from management or the formal workplace. But there’s also a universal hatred of commuting, plus the costs involved in trekking by car, train, tram or subway. And how about all those germy people along the way? Is it even safe to go out?

Here’s a new survey (from KPMG) shedding some light on these issues. Most workers, it found, have had enough of WFH and want WFW instead – or, at least, a hybrid model. It’s also interesting that while 60% claimed to be more productive working from home a year ago, that number’s now dropped to half. “People miss their colleagues and just want to come back in and say hello and be a part of the buzz. So I think there is going to be a bit of a rush back into the offices,” says the company, because “many feel overworked and burnt out.”

So, 63% want to go back. Half the respondents say they fear being out of sight means less chance for a promotion or salary increase. Almost 60% think their overlords should force everyone to be vaccinated. It’s a matter of safety, says KPMG, “and that’s going to be the biggest driver of whether people will see themselves as permanently back in the office or not.”

Well, it’s time to slither down to the steerage section of this pathetic blog and see what the rabble thinks about this. Are you ready to put on fresh pants, eyeliner and actual shoes, and venture out again? Will this be a like high school reunion, to see who got fat or still has hair?

Time to fess up…

Garth Turner May 19th, 2021

Posted In: The Greater Fool

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