Summary
Phil Anderson highlights that three of Australia’s four major banks appeared on the 52-week new highs list (5 March 2021), interpreting this as the market pricing in higher bank profits driven by credit creation and a steepening yield curve. He connects strengthening bank charts globally to the continuation of Australia’s real estate cycle, and notes Australia’s stock market remains the only major world market yet to surpass its 2007 high.
Key Claims
- Three of Australia’s four major banks appeared on the 52-week new highs list on 5 March 2021 — confidence: high (cited source: equitiesinfo)
- Once a stock enters the 52-week new high (or low) list, the trend tends to continue — confidence: high
- The exception to 52-week high trend continuation occurs at market extremes (e.g., late 2019 / early 2020 were flagged as such) — confidence: high
- Strengthening bank charts globally are driven by a steepening yield curve (long rates rising above short rates, widening the spread) — confidence: high
- Commonwealth Bank (CBA) exhibits the strongest chart of Australia’s big four banks; it declined least during the pandemic and was approaching all-time new highs as of this date — confidence: high
- Australia’s economy historically performs better in the second half of each US-led real estate cycle; this pattern was expected to continue — confidence: medium
- Australian real estate markets are unlikely to collapse under conditions of rising bank profitability and increased credit creation — confidence: medium
- Australia’s stock market is the only world market yet to surpass its 2007 high as of March 2021 — confidence: high
- US mid-sized bank consolidation activity was increasing at the time of writing — confidence: medium (anecdotal reference)
- Amateur traders buy good news when it is finally reported, creating a top at that point — confidence: medium (behavioural observation, Gann-derived principle)
Mex Pete References
None.
Stock Picks / Signals
- CBA (Commonwealth Bank of Australia): Noted as having the strongest chart of Australia’s big four banks; no explicit buy/sell signal, stop loss, or price target given.
- Australian major banks generally (ANZ, NAB, WBC, CBA implied): Presence on 52-week new highs list cited as a bullish continuation signal; no explicit entry/exit parameters given.
Predictions / Forecasts
- Australian stock market expected to reach higher levels beyond March 2021, supported by banks breaking to new highs (no specific price target or date given beyond a general reference to “2026 and beyond”).
- Australian real estate cycle expected to continue its upward trajectory through the second half of the US-led real estate cycle.
- Higher bank profits expected to be reported over the next several years from increased credit creation.
Notable Quotes
“The market has known this for a few months already. Strengthening bank charts has been happening the world over. This comes from a steepening yield curve presently.”
“Australia’s stock market is the only world market that is yet to surpass its 2007 high. So again, Australian banks beginning to appear in the ‘new highs’ list is suggestive of higher Australian markets later on.”