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The Australian sharemarket notched up its worst week in nearly a year following concerns that stronger than expected economic data in the United States would see interest rates staying higher for longer.

The S&P/ASX 200 index dived 1.7 per cent, or by 121.10 points to a three-week low of 7042.30 . The bourse fell for a second week in a row by 2.2 per cent – its sharpest fall for 2023 and the worst since September 2022.

Tech stocks were the hardest hit as Block dived 5.5 per cent, while Pinnacle Investments lost 5 per cent after the investment group warned that business conditions have remained challenging as it added that performance fees were expected to be $58m for the 2023 financial year.

A leading superfund researcher has warned members to review their investment options in light of the fact that returns are being undercut by high inflation. While super continues to perform well on a long-term basis, SuperRatings says funds will struggle to meet their inflation-adjusted returns over the short term while inflation remains high.

The federal Labor government has proposed limiting its $2bn fund to only large-scale hydrogen projects that use renewable energy to power electrolysers, as Australia looks to kick-start an industry that has split expert opinion. Unveiling for the first time its proposed merit criteria, Federal energy Minister Chris Bowen floated limiting the funding pool to projects over 50MW in size and powered only by renewable energy.

Meanwhile, Commonwealth Bank has decided to leave hundreds of its regional branches open for at least three more years, in welcome news to regional Australia that come ahead of a senate inquiry resuming next month.

The Markets

The Big Read

Despite the reams of breathless reportage about artificial intelligence and the impact it will have on the workplace and life in general, there may be a risk the impact is being underplayed.

Much of the attention has been focused over the past year on the large language model AI ChatGPT and its later iteration GPT4, developed by OpenAI, and for good reason.

Researchers at Microsoft, in a paper published in April this year, document some astounding abilities that GPT4 exhibits, including the ability to “draw” a unicorn, by inputting code into a program called TiKZ, which, given GPT4 is purely a language-based program, was surprising.

GPT4 also exhibits responses which accord with having a “theory of mind” or “the ability to attribute mental states such as beliefs, emotions, desires, intentions, and knowledge to oneself and others’’.

While GPT4 is weak in some areas - it sometimes makes basic mathematical mistakes - its capability in others, and the nuance of its responses, informed the title of that research paper: “Sparks of Artificial General Intelligence: Early experiments with GPT-4’’.

Cameron England, David Swan

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