Why on earth is CBA at a record high?

Tuesday, 31 January 2023

The Commonwealth Bank of Australia is a late-cycle performer. So are all banks. They enjoy the early and mid-term months of a monetary tightening cycle as activity remains solid and margins expand with higher interest rates.

To this extent, yesterday’s record high in CBA makes sense:

But, there are a few factors that suggest the outcome is irrational.

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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.