CBA surges as CSL tumbles; Taylor quits shadow cabinet; crockery maker’s AI boom

CBA surges as CSL tumbles; Taylor quits shadow cabinet; crockery maker’s AI boom

News in brief

Conservative Liberal Party MP and Shadow Defence Minister Angus Taylor last night quit the frontbench and is set to challenge Sussan Ley for the top job. He said the Opposition was in its worst position since 1944 and he did not believe Ley could turn things around.

 

The S&P/ASX 200 Index climbed 1.7 per cent yesterday to 9015 points and is just over one per cent off its all-time high set in October last year. Meanwhile the Aussie dollar hit a three year high of more than 71 US cents.

 

CSL’s share price tumbled 5.5 per cent yesterday after announcing it will write down the value of two of its three divisions by $1.6 billion, a result which led to the resignation of CEO Paul McKenzie.

 

The head of federal Treasury, Jenny Wilkinson, has all but confirmed that her department provided the government with advice over changes to the 50 per cent capital gains tax deduction for investors.

 

Not all high-flying AI companies have to be making data centres or microchips. The share price of Wall Street-listed Corning, famous for manufacturing Edison’s light bulbs in the 1800s and Pyrex in the 1970s, has hit an all-time high because it has created super strong glass, used in smart phones, and fibre optic cables.

Fear-o-meter

Commonwealth Bank’s results are a highlight of profit reporting season, no matter how the company performs, because they provide great insights into the economy.

 

The bank, via its cards and accounts data, can outline which parts of the economy are doing well. It has more than 9.4 million active users of its retail app, so it gets to learn a fair bit about the economy.

 

The results presentation yesterday shows that it is households that are driving growth, more so than government. In every age category, spending on essentials rose during the final three months of last year. The younger the cohort, the more the spend jumped.

 

Among 20- to 34-year-olds, spending on discretionary items rose. Housing, food and recreation is driving inflation, while communications and insurance costs are hardly rising at all.

 

There hasn’t been a jump in bad loans. In fact, they’ve fallen suggesting Australians are feeling a touch more comfortable with their financial position.

 

The downside is it puts pressure on inflation. And if inflation rises, as CBA expects it will, then there will be more interest rate hikes this year. The bank’s best guess is two more rate rises in 2027.

Fear & Greed Q+A today

On CBA's $5.4 billion half-year profit, the state of the economy, and competition in the lending and deposit market from other players like Macquarie.

 

“Well, I think there’s lots of competitors in the market and in all of the businesses that we operate. We’ve been continuing to invest in technology and in our overall customer service proposition. We’ve added bankers to serve our customers, particularly our business customers. As you mentioned, we’re on track to spend well north of $2 billion in technology investment. About a billion dollars of that is actually in protecting our customers in scams, fraud, cyber, broader resilience and also financial crime.

 

We think technology is a really important part of banking with our customers today. We’re very fortunate to be able to support 18 million Australians. That record lending has not only helped on average every week more than 3,000 people into a new home, it’s also enabling us to lend about $900 million to business customers every week, which supports economic growth — including businesses building more houses, which is of course a very important supply constraint at the moment.”

Record growth in loans and deposits has pushed Commonwealth Bank’s half year profit to $5.4 billion, triggering a seven per cent jump in its share price. The result beat market expectations and the bank’s share price had its best day since 2020, and regained a stack of ground it lost in the final six months of 2025. It is once again the largest company on the bourse, ten per cent bigger than BHP. CBA grew share in business lending, including small business, and credit cards and maintained its share of the home lending market. The main negative, for shareholders at least, is that competition is tough and profit margins are being squeezed. The net interest margin fell 4 basis points to 2.04 per cent. Also, inflation pushed costs higher.

Greed-o-meter

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Reporting season is already triggering some big swings in share prices. Here are the five biggest movers in each direction yesterday on the S&P/ASX 200.

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Source: ASX.com.au

Company	Change (%)
Aussie Broadband	14.8
AGL Energy	11.8
James Hardie	10.9
Evolution Mining	8.7
Commonwealth Bank	6.8

Company	Change (%)
CSL	-11.0
ResMed	-4.6
Superloop	-3.3
Computershare	-3.1
Telix Pharmaceuticals	-3.1