The Australian sharemarket has fallen to its lowest close since early June, as surging oil prices and expectations of higher interest rates put investors on edge.
The S&P/ASX 200 dropped 0.9 per cent to 8672 points, with Brent crude climbing to $US107 a barrel as hostilities in the Middle East threatened global energy supplies.
Higher oil prices are adding to inflation concerns and pushing bond yields sharply higher. US 10-year yields briefly topped 5 per cent for the first time in three years, while Australian 10-year yields reached a 15-year high of 5.40 per cent.
Some of the market’s biggest companies are taking the brunt of the sell-off. BHP has dropped 12 per cent in three weeks, while Commonwealth Bank is down 16 per cent from its peak six weeks ago. Macquarie, Rio Tinto and Woodside also fell yesterday.
The exception is CSL, which has surged almost 90 per cent from its June low, while defensive names including Woolworths, Coles and Telstra have also held up better.
Almost every home resold in Brisbane, Adelaide and Perth in the June quarter made money for its owner, according to Cotality. Brisbane led the capitals, with 99.8% of resales turning a profit and a median gain of $525,000, while Melbourne had the lowest profitable resale rate at 89%. But the property downturn is starting to eat into profits - nationally, 95.4% of resales delivered a nominal profit, down from a 21-year high of 96.1% in March.
City
Profitable sales %
Median profit $
Brisbane
99.8
525,000
Adelaide
98.9
480,400
Perth
98.8
470,000
Hobart
97.6
340,000
Sydney
92.7
403,945
Canberra
91.7
319,500
Darwin
90.7
180,500
Melbourne
89.0
278,000
Source: Cotality
Fear & Greed Q+A today
Last month SCX.ai became the first pure-play sovereign AI infrastructure company to list on the ASX. David explains why he sees 'inferencing' as the next AI boom, and why Australia needs to have its own sovereign AI capability:
“I think a lot of people are using AI today and they're using it in some kind of a chatbot, right? But they're not sure what happens once they ask the question.
“What's actually happening is you ask the chatbot to analyse – could be your X-ray, could be anything you're putting in there, some personal information – and you ask it a question. That information you've put in is sent to a machine somewhere that is processing that information and sending back tokens that then become the words that stream across your chatbot screen.
“That is being performed somewhere. And for millions of Australians today, they're sending their most sensitive data overseas just to use AI without even thinking about it.
“We're giving people a real alternative. I'm a big believer that our relationship with the United States and with China are critical to the future of Australia and those relationships are important. But I think many Australians don't want to send all their intelligence to the Americans or the Chinese.”
OpenAI: OpenAI says Australia’s copyright laws are an obstacle to discussions about building major AI training infrastructure here, creating a difficult trade-off between attracting investment and protecting creators.
Retail: Cue Clothing and sister brand Veronika Maine have collapsed into administration after nearly six decades, adding to a growing list of Australian retailers under pressure.
Super: A record 52,000 self-managed super funds were established last financial year, with Gen X and Millennials accounting for almost 90 per cent of new SMSFs.
Apple: Australians will have to prove they’re over 18 to download adult-rated apps or switch off certain Apple safety features, using identification or an eligible credit card.
Champagne: France’s record-breaking heat has produced unusually sugary grapes, prompting authorities to temporarily allow Champagne made from this year’s harvest to reach 15 per cent alcohol. Climate change is coming for happy hour.
Fear-o-meter
RBA Chief Economist Sarah Hunter on why productivity is so important:
"Go back to 1901. At that time, the average worker would have to work for about 18 minutes to be able to afford a loaf of bread in Australia. Now, that number is more like four minutes. So that's a near five-fold increase in living standards.
"The other 16 minutes that you work, you can then spend that money on everything else, and you can still buy your loaf of bread.
"That's why productivity matters. It lifts people's living standards. It makes all of our lives better off. That's why economists get so excited about it.
"And by … lifting living standards … we as a country, as a community, can decide what services that we provide [and] who we provide them to. We all can afford to purchase more goods and services. It's not the be-all and end-all. I don't want to suggest that. But it is, I do think, pretty important, and hopefully that sort of stylised fact shows it."
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