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Commonwealth Bank’s share price has a hit a record high today, currently at $75 and change. The Financials Index is also trading in clear air though not at a record high, still well below its 2007 peak.
It was just a few months ago that these bank shares were considered by some, including me, as trading at bubble levels around these prices. The rationale then was that banks were benefiting overly from investor’s “demand or yield”. That was something of a safe haven play. Now they’re rallying on the cyclical recovery trade. An only slightly less bubbly narrative.
That’s what being a protected species gets you. Nice work if you can get it.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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