The ASX has held mostly steady today, gaining quickly in early trading before falling back off to slip just 0.05% or 5.20 points below yesterday’s close, now 7,230.80 points.
Healthcare (+0.82%) and Communication Services (+0.79%) valiantly attempted to hold the ASX up as Energy (-0.77%) and Materials (-0.71%) weighed it down.
Precious metals and crude oil were also on the up today, although base metals languished, all falling more than 1% except for lead, which held steady with a 0.07% lift.
The bottom-performing stocks for the ASX200 were Magellan Financial Group Limited and Lynas Rare Earths Limited, which fell 4.98% and 4.68%, respectively.
Magellan shares took a dive after the manager’s funds under management (FUM) fell by $2.2 billion, with overall net outflows of $3.9 billion over March - not a particularly promising sign.
Lynas’ shares first took a hit more than a month ago, when Tesla (NASDAQ:TSLA) announced it would be phasing out most rare earth minerals from its production process.
New restrictions to the company’s licence in Malaysia also mean any lanthanide concentrate will need to be produced in the company’s planned Kalgoorlie Rare Processing Facility post-July this year.
The company’s shares have yet to recover but analysts are bullish on the stock as it represents the largest rare earth miner outside of China, a significant factor given the current state of geopolitics.
Bell Potter had this to say:
“Whilst the near-term risks are undeniable, we fundamentally believe Lynas to be the sector leader in the rare earth space, with a sound balance sheet, multiple long-term growth pathways underpinned by arguably the best rare-earth deposit at Mt Weld.”
RBA says variable mortgage rates gave rate hikes greater impact
RBA governor Philip Lowe addressed the National Press Club on the topic of monetary policy today, outlining the factors that led to the RBA’s decision to pause further interest rate hikes for now.
Lowe said the decision to pause rate hikes would give the RBA more time to assess Australia’s economic outlook, especially given how volatile international markets have been in recent months.
“It is increasingly clear that the higher interest rates are having an impact on aggregate household spending,” Lowe said.
“Consumption growth has slowed considerably from the very fast rates during the COVID bounce-back and it is now below average.
“On the positive side of the ledger, unemployment is low and households, in aggregate, saved a lot more than usual during the pandemic.
“Wages growth is higher than it was a few years ago and this is a welcome development. It is also noteworthy that the recent high inflation has not been driven by excessive wages growth," Lowe continued, putting the wage-price spiral rhetoric to bed.
“The unemployment rate is around the lowest that it has been since 1974 – that is nearly 50 years ago – and underemployment is at a multi-decade low.
"Since interest rates started rising, the average mortgage rate that Australians pay has increased more quickly than average mortgage rates paid in other countries,” he said.
“The predominance of variable-rate mortgages in Australia means that this is a more powerful transmission mechanism of monetary policy than in many other countries.
"This increase in mortgage rates has had a significant effect on household budgets and we anticipate that required mortgage payments will reach a new record high of almost 10% of household disposable income by the end of next year.”
While that will be painful news for many, it seems the RBA is confident a path forward can be found with careful consideration.
“Our central view remains that economic growth will be below trend for a while, that unemployment will increase later this year and that inflation will decline gradually over time,” Lowe explained.
“It is a narrow path, though, and there are other plausible scenarios.
“Before we take our next interest rate decision in Perth in early May, we will conduct a full review of the forecasts and scenarios for the economy and inflation.”
What the generative AI arms race means for email security
While Italy bans ChatGPT and the EU considers strong generative AI regulation, cyber defence specialists Darktrace are raising the alarm on AI’s threat to email security.
Darktrace research highlighted a 135% increase in ‘novel social engineering attacks’ across thousands of Darktrace/Email customers from January to February 2023 – in tandem with the widespread adoption of ChatGPT.
Darktrace says these novel social engineering attacks use “sophisticated linguistic techniques, including increased text volume, punctuation, and sentence length with no links or attachments” suggesting that AI is enabling more sophisticated and targeted attacks.
The cyber defence specialist company presents a chilling possible scenario:
Your CEO emails you to ask for information.
It’s written in the exact language and tone of voice that they typically use. They even reference a personal anecdote or joke.
Darktrace’s research shows that 61% of people look out for poor use of spelling and/or grammar as a sign that an email is fraudulent, but this email contains no mistakes.
The spelling and grammar are perfect, it has personal information and it’s utterly convincing.
But your CEO didn’t write it.
It was crafted by generative AI, using basic information that a cyber-criminal pulled from social media profiles.
This new era of targeted cyber attacks is especially concerning given protective tools are trailing so far behind.
79% of respondents to Darktrace’s survey say their email security filters stop important legitimate emails from getting to their inbox, and 70% of global employees have noticed an increase in the frequency of scam emails and texts in the past six months.
Innocent human error is difficult to plan for; almost 2 in 5 respondents admitted to sending an important email to the wrong recipient – rising to 51% in the finance industry and 41% in the legal industry – and that’s with no nefarious interference whatsoever.
Darktrace says the issue has gone beyond the realm of normal security tools.
“Defenders are up against Generative AI attacks that are linguistically complex and entirely novel scams that use techniques and reference topics that we have never seen before,” Darktrace researchers said.
“In a world of increasing AI-powered attacks, we can no longer put the onus on humans to determine the veracity of communications.
“This is now a job for artificial intelligence.”
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