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Key points
- The Macquarie share price is outstripping the other ASX banks today
- While many of the big four are strugglign to break even, Macquarie shares are up 3%
- Could interest rates be a factor here?
The S&P/ASX 200 Index (ASX: XJO) is having a decent day of trading on the markets so far this Tuesday. At the time of writing, the ASX 200 is up a healthy 0.33% after an initial dip into negative territory this morning. But that's nothing compared to the Macquarie Group Ltd (ASX: MQG) share price.
Macquarie shares are currently up a very pleasing 2.76% at $188.68 each. That's not only a vast outperformance of the ASX 200, but also of Macquarie's peers in the ASX banking sector.
In contrast to Macquaire's near-3% rise, Commonwealth Bank of Australia (ASX: CBA) shares are currently up 0.50% at $94.21.
National Australia Bank Ltd. (ASX: NAB) shares are doing a little better, up 2.03% at $27.68 a share.
Westpac Banking Corp (ASX: WBC) shares have gained 0.67% at $20.44 each.
And the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has gained 0.30% at $26.61 a share.
So how come Macquarie shares are smashing the other ASX banks so far this Tuesday?
Well, unfortunately, we can't say for sure. There hasn't been any major news or announcements out of Macquarie today. Or indeed for a couple of weeks.
But it's possible that today's moves have something to do with the upcoming meeting of the Reserve Bank of Australia (RBA). The RBA is meeting today, as it does on the first Tuesday of every month. But this meeting is one that is a little more anticipated than most. Investors are keeping an eagle eye on the central bank as it deliberates over its monetary policy outlook.
Could the RBA meeting be pushing Macquarie shares higher today?
Until now, the RBA has stuck to its guns over interest rates and inflation, describing the prospects of an interest rate hike in 2022 as remote. However, over the past month, the inflation outlook in both Australia and around the world has changed. Higher than expected inflation numbers in the Australian economy have many experts predicting that the RBA will be forced to change up its expectations and entertain the possibility of at least one rate rise this year. Or at least end its quantitative easing (QE) bond buying programs.
Interest rates have a profound influence in all financial markets, given the effect they have on most asset classes. Higher rates mean it is more attractive to park cash in savings accounts and other 'safe' investments rather than riskier assets like shares. Additionally, higher rates increase the cost of borrowing money, which can have major implications for many companies (such as those with higher debt burdens) listed on the share market.
So it's not clear why investors are pushing up Macquarie shares today over the other big four banks. Perhaps this is a bet that whatever the RBA tells us this afternoon will be more beneficial to Macquarie than other ASX shares like the major banks. Or perhaps investors are just finding a renewed interest in Macquarie. After all, this is a company that has sold off rather heavily over the past month or so. Even after today's rally, the Macquarie share price remains down 10.8% year to date.
Whatever the reason for today's rally, it will no doubt be welcomed by Macquaire shareholders.
At the current Macquaire share price, this ASX 200 bank has a market capitalisation of $72.39 billion, with a trailing dividend yield of 3.22%.
