All of the shares of the big banks of ANZ (ASX: ANZ), NAB (ASX: NAB), CBA (ASX: CBA) and Westpac (ASX: WBC) are all up impressively.
Right now we can see that:
The ANZ share price is up 9.6%.
The NAB share price is up 9.2%.
The CBA share price is up 5.5%.
The Westpac share price is up 9.6%.
It’s as good as the day of the release of the Hayne Royal Commission final report.
So why is everything going up?
Well you’d have to ask each investor why they’re happy to pay a share price that’s 9% higher than yesterday and far higher than last week.
The Australian Financial Review’s reporting of UBS’ comments where the investment bank is now expecting household spending to be higher and GDP to be better than originally forecast. But UBS is still expecting GDP to drop by 5.2% this year.
The fact that the jobkeeper rescue package is now expected to cost the budget a lot less is another good sign for the country. It means less borrowing by the federal government and it suggests that less employees (and sole traders) are doing it as tough. Though time will tell how many people simply hadn’t applied correctly to get it. We’ll just have to see.
Banks have provisioned a few billion dollars between them for COVID-19. It’s nothing like the GFC for the northern hemisphere. Perhaps there has been far too much negativity about the banks. I’m not sure yet, we’re only a few months into this whole situation. For the long term they probably are cheap. How much profit will they generate in FY22? That’s a key question.
For a bet for an Australian recovery I’d rather choose a share like Brickworks (ASX: BKW).
Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.
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