What’s happening with the CBA (ASX:CBA) share price this week?

Interest rates are forecast to rise faster than recently expected amid sticky inflation predictions.
The post What’s happening with the CBA (ASX:CBA) share price this week? appeared first on The Motley Fool Australia. –

The Commonwealth Bank of Australia (ASX: CBA) has shaken off this week’s malaise and is well into the green in afternoon trading.

At time of writing, the CBA share price is up 2.3% to $98.96 per share.

The S&P/ASX 200 Index (ASX: XJO) is gaining as well, up 0.3%.

If CBA finishes in the green today it will be the first time this week since Monday’s 0.1% rise that the CBA share price has closed the day higher.

Now here’s what’s been happening with CBA this week.

Interest rates are on the rise

Yesterday The Motley Fool reported that CBA had raised its fixed lending rates for owner-occupiers and investors.

Owner-occupiers will pay an extra 0.05% interest, bringing the fixed rate to 2.54%.

In a sign that the bank expects interest rates to keep rising longer-term, CBA’s 3-year fixed rate increased 0.15%, with borrowers now having to pay 3.14% interest. Add on another year and the 4-year fixed rate was bumped 0.25% to now stand at 3.34%.

RateCity’s research director, Sally Tindall noted that with the latest round of increases, the bank’s 3-year and longer fixed rates are now higher than they were before COVID struck.

In would could pose some difficulties for the Aussie housing market, Tindall added, “These fixed rates hikes aren’t isolated to the big four banks. The rate rises are coming in across the board from lenders big and small and we expect them to continue.”

The CBA share price closed flat yesterday.

CBA shares struggle amid price competition

Earlier in the week, The Motley Fool reported on the challenges facing CBA in recent months amid the past year’s record low interest rates.

Joseph Koh, a portfolio manager in Schroders’ Australian equities team, said both the Westpac Banking Corp (ASX: WBC) and CBA share price have been struggling as the banks are “more skewed towards residential mortgages relative to peers”.

“Extremely low interest rates have buoyed mortgage growth, but have also led to sharp price competition, particularly hurting CBA’s and Westpac’s profitability,” Koh said.

CBA share price snapshot

The CBA share price has been a strong performer in 2021, up 19%. By comparison, the ASX 200 has gained 10% year-to-date.

Over the past month, CBA shares have managed to notch up a 0.5% gain while the benchmark has retreated that same amount.

CBA pays a trailing dividend yield of 3.6%, fully franked.

The post What’s happening with the CBA (ASX:CBA) share price this week? appeared first on The Motley Fool Australia.

Should you invest $1,000 in CBA right now?

Before you consider CBA, 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 CBA 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 August 16th 2021

More reading

CBA (ASX:CBA) share price up amid another loan rate hike

Could the CBA share price peak have been and gone?

Top brokers name 3 ASX shares to sell next week

Why CBA (ASX:CBA) and this dividend share could be buys

ANZ Bank (ASX:ANZ) spruiks $400m tech rebuild with mortgage approval in 10 min

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 recommended Westpac Banking Corporation. 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
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!