Insights

The CBA (ASX:CBA) share price is down 5% in the past month, here’s why

From potential interest rate hikes to the reintroduction of lockdowns, it’s been a down few weeks for this big bank.
The post The CBA (ASX:CBA) share price is down 5% in the past month, here’s why appeared first on The Motley Fool Australia. –

June witnessed a euphoric surge in the Commonwealth Bank of Australia (ASX: CBA) share price. CBA shares hit $100 for the first time and marked a new all-time high of $106.57.

Fast forward to today, the CBA share price has tumbled 5% in the last month, closing at $98.19 last Friday.

Why the CBA share price is struggling to hold record highs

Interest rate concerns

The CBA share price plummeted 7.41% from $105.91 to $98.08 between Friday 18 June and Monday 21 June.

During this time the broader market experienced a sharp sell-off, headlined by cyclical and value sectors including financials, energy and utilities.

The sell-off was driven by concerns that interest rate hikes might occur sooner than expected.

In the United States, the Federal Reserve said it was likely to begin increasing interest rates by 2023 instead of 2024.

Back at home, Westpac Banking Corp (ASX: WBC) predicts that the Australian economy might be ready for its first interest rate hike in more than a decade.

Westpac thinks the RBA could be raising interest rates by the first quarter of 2023.

This prediction came about on 21 June, when the CBA share price tanked 5.43% to $98.06.

Lockdown jitters

The last month has seen a resurgence of COVID-19 cases around Australia. Stubbornly high COVID cases reported each day has extended Greater Sydney’s lockdown to 30 July. Meanwhile, Victoria is in a five-day snap lockdown.

The Australian reported that Sydney’s lockdown has “smashed consumer confidence in the country’s biggest city, with worse to come.”

The report quoted Westpac chief economist Bill Evans who said, “confidence in Sydney and New South Wales could fall significantly further if lockdown measures are unsuccessful or slow to act in containing the outbreak.”

In addition, the report flagged concerns that the Sydney lockdown could send Australia’s economic growth backwards in the September quarter.

Another 111 new cases in Sydney on Saturday may weigh on sentiment for both the CBA share price and the broader market.

What about the property market?

The red hot Australian property market and surging lending figures is likely another factor supporting the bullish performance of the CBA share price.

Earlier this month, CoreLogic released a comprehensive overview of how the housing market performs during lockdowns.

The report said that: “Transaction activity slows markedly through lockdown periods, however a ‘catch up’ in home purchases has been evident as restrictions ease.”

In addition, CoreLogic Head of Research for Australia, Eliza Owen observed:

A big part of why the housing market didn’t see further value declines was the enormous income support packages provided to households, the role of JobKeeper in maintaining employment relationships, low mortgage rates and mortgage repayment deferrals. 

In the event of another extended lockdown, the future of housing demand and supply becomes much less certain if that same government and institutional support is not there.

The post The CBA (ASX:CBA) share price is down 5% in the past month, here’s why appeared first on The Motley Fool Australia.

Should you invest $1,000 in Commonwealth Bank right now?

Before you consider Commonwealth Bank, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Commonwealth Bank wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

ASX 200 Weekly Wrap: ASX shakes off lockdowns to rise higher

Does Google plan to disrupt the ASX banks of CBA, ANZ, NAB and Westpac?

NAB (ASX:NAB) share price slides as potential Forum fraud deepens
How has the Afterpay (ASX:APT) share price responded to competition in the past?
It hasn’t been a great week for the ANZ (ASX:ANZ) share price so far

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
Trade The US Market With ZERO Brokerage* + FREE Access To Trading Ideas & Value Analysis Tools. Click Here!