ASX shares are ‘vulnerable to further falls’: expert
Investors may still be in for a bumpy ride yet as a leading Australian economist forecasts that more volatility in global markets is likely over the coming months
3 min
Investors are nervous and “sensitive to weaker economic data”, with more volatility likely ahead for the Australian share market despite its stabilisation in recent days, says AMP chief economist Dr Shane Oliver. A dramatic global sell-off at the start of the month saw the ASX 200 plunge 465 points or 5.73 percent over two trading sessions, with other share markets around the world also tumbling.
A weak jobs report and manufacturing report out of the United States sparked the sell-off due to fears the world’s biggest economy may be slowing faster than thought and a recession may be imminent. Major ASX 200 companies were caught up in the sell-off, with shares in our biggest technology company, Wisetech, falling 12.58 percent over the two days. ASX 200 bank shares were also hit hard, with NAB shares dropping 8.52 percent and CBA shares shedding 8.35 percent.
Other major fallers included the ASX 200’s largest property stock, Goodman Group, with its share price diving 11.86 percent over the two days. Shares in the market’s biggest retail stock, Wesfarmers, fell by 6.19 percent, and the ASX 200’s biggest energy company, Woodside, lost 5.5 percent. Shares in the ASX 200’s biggest mining company, BHP, slipped 3.25 percent.
Another contributor to the global sell-off was the winding back of the Japanese yen ‘carry trade’. A carry trade is where global investors borrow money in a low-rate currency and invest in other currencies and assets, such as bonds and shares, that offer a higher rate of return. Japan had zero or negative interest rates for almost 14 years before the Bank of Japan raised rates in March to a range of 0–0.1 percent and again last month to 0.25 percent. This prompted investors to begin selling their investments, which are spread across share markets all over the world, to reduce or end their carry trades.
The threat of a recession in the US was somewhat quelled last week when the latest US initial jobless claims report showed the number of workers claiming welfare was lower than expected. Comments from the Bank of Japan’s deputy governor indicating the bank would not raise rates further while markets are unstable also calmed investors’ nerves. As a result, some losses were clawed back. The ASX 200 finished 2.08 percent lower last week, with Japanese shares down 2.5 percent and US shares down 0.04 percent.
Dr Oliver said ASX shares could rebound a little more but they remain “vulnerable to further falls over the next few months”. Dr Oliver said this was due to stretched valuations and a “very high” risk of recession both in Australia and the US. He said there were indications of deteriorating employment in both economies and share markets had not priced this into company valuations.
Dr Oliver added: “… geopolitical risk is high particularly around the US election and the Middle East with a high risk of escalation between Iran and Israel after the assassination of [a] Hamas’ leader in Iran; and we have only just started in the seasonally weak period of August and September which can sometimes extend into October/November in US election years”.
Dr Oliver said the Reserve Bank was “surprisingly hawkish” last week, with Governor Michele Bullock saying the board considered a rate rise at its meeting before deciding to keep rates on hold. She also said a rate cut was unlikely over the next six months. The RBA has also pushed out its expectations on the timing for a return of inflation to its target middle of the 2-3 percent band by six months.
“This hawkishness was a bit surprising given that in the last few months economic growth came in weaker than expected and inflation was broadly in line with RBA forecasts, the RBA’s near-term wage growth forecasts have been revised down and uncertainty regarding growth in China and the US has increased,” Dr Oliver said.
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The lunar flyby would be the deepest humans have traveled in space in decades.
4 min
It’s go time for the highest-stakes mission at NASA in more than 50 years.
On April 1, the agency is set to launch four astronauts around the moon, the deepest human spaceflight since the final Apollo lunar landing in 1972.
The launch window for Artemis II , as the mission is called, opens at 6:24 p.m. ET.
National Aeronautics and Space Administration teams have been preparing the vehicles to depart from Florida’s Kennedy Space Center on the planned roughly 10-day trip. Crew members have trained for years for this moment.
Reid Wiseman, the NASA astronaut serving as mission commander, said he doesn’t fear taking the voyage. A widower, he does worry at times about what he is putting his daughters through.
“I could have a very comfortable life for them,” Wiseman said in an interview last September.
“But I’m also a human, and I see the spirit in their eyes that is burning in my soul too. And so we’ve just got to never stop going.”
Wiseman’s crewmates on Artemis II are NASA’s Victor Glover and Christina Koch, as well as Canadian Space Agency astronaut Jeremy Hansen.
What are the goals for Artemis II?
The biggest one: Safely fly the crew on vehicles that have never carried astronauts before.
The towering Space Launch System rocket has the job of lofting a vehicle called Orion into space and on its way to the moon.
Orion is designed to carry the crew around the moon and back. Myriad systems on the ship—life support, communications, navigation—will be tested with the astronauts on board.
SLS and Orion don’t have much flight experience. The vehicles last flew in 2022, when the agency completed its uncrewed Artemis I mission .
How is the mission expected to unfold?
Artemis II will begin when SLS takes off from a launchpad in Florida with Orion stacked on top of it.
The so-called upper stage of SLS will later separate from the main part of the rocket with Orion attached, and use its engine to set up the latter vehicle for a push to the moon.
After Orion separates from the upper stage, it will conduct what is called a translunar injection—the engine firing that commits Orion to soaring out to the moon. It will fly to the moon over the course of a few days and travel around its far side.
Orion will face a tough return home after speeding through space. As it hits Earth’s atmosphere, Orion will be flying at 25,000 miles an hour and face temperatures of 5,000 degrees as it slows down. The capsule is designed to land under parachutes in the Pacific Ocean, not far from San Diego.
Is it possible Artemis II will be delayed?
Yes.
For safety reasons, the agency won’t launch if certain tough weather conditions roll through the Cape Canaveral, Fla., area. Delays caused by technical problems are possible, too. NASA has other dates identified for the mission if it doesn’t begin April 1.
Who are the astronauts flying on Artemis II?
The crew will be led by Wiseman, a retired Navy pilot who completed military deployments before joining NASA’s astronaut corps. He traveled to the International Space Station in 2014.
Two other astronauts will represent NASA during the mission: Glover, an experienced Navy pilot, and Koch, who began her career as an electrical engineer for the agency and once spent a year at a research station in the South Pole. Both have traveled to the space station before.
Hansen is a military pilot who joined Canada’s astronaut corps in 2009. He will be making his first trip to space.
Koch’s participation in Artemis II will mark the first time a woman has flown beyond orbits near Earth. Glover and Hansen will be the first African-American and non-American astronauts, respectively, to do the same.
What will the astronauts do during the flight?
The astronauts will evaluate how Orion flies, practice emergency procedures and capture images of the far side of the moon for scientific and exploration purposes (they may become the first humans to see parts of the far side of the lunar surface). Health-tracking projects of the astronauts are designed to inform future missions.
Those efforts will play out in Orion’s crew module, which has about two minivans worth of living area.
On board, the astronauts will spend about 30 minutes a day exercising, using a device that allows them to do dead lifts, rowing and more. Sleep will come in eight-hour stretches in hammocks.
There is a custom-made warmer for meals, with beef brisket and veggie quiche on the menu.
Each astronaut is permitted two flavored beverages a day, including coffee. The crew will hold one hourlong shared meal each day.
The Universal Waste Management System—that’s the toilet—uses air flow to pull fluid and solid waste away into containers.
What happens after Artemis II?
Assuming it goes well, NASA will march on to Artemis III, scheduled for next year. During that operation, NASA plans to launch Orion with crew members on board and have the ship practice docking with lunar-lander vehicles that Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin have been developing. The rendezvous operations will occur relatively close to Earth.
NASA hopes that its contractors and the agency itself are ready to attempt one or more lunar landing missions in 2028. Many current and former spaceflight officials are skeptical that timeline is feasible.
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