On Tuesday the S&P/ASX 200 Index (ASX: XJO) was on form again and surged higher.

This led to a number of shares jumping higher with the market, with some of them even managing to climb to new highs yesterday.

Here’s why these ASX shares are flying high right now:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price touched on a multi-year high of $66.96 on Tuesday. Investors have been buying the pizza chain operator’s shares during the pandemic after the closure of restaurants led to increasing demand for its pizzas. Towards the end of April the company revealed that its Japan and Germany businesses were performing particularly strongly in the second half. Australian same store sales have been positive during the period as well. All in all, it looks well-placed to deliver a solid full year result in August.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price hit a new record high of $15.25 yesterday. Investors were buying the iron ore producer’s shares after the price of the steel-making ingredient jumped higher again. Supply disruption in Brazil and robust demand in China have combined to send the spot iron ore price comfortably over the US$100 a tonne level. In light of this, Fortescue is likely to be generating significant free cash flow at present. Especially given its low cost operations and improving production grades.

MNF Group Ltd (ASX: MNF)

The MNF share price hit a 52-week high of $5.88 on Tuesday. The telecommunications and unified communication technologies provider’s shares have been on fire during the pandemic. This is because the working from home initiative has led to a surge in demand for voice and collaboration technology. At the end of April, the company revealed that it was on track to achieve its operating earnings guidance of $36 million to $39 million in FY 2020. This represents a 32% to 43.4% year on year increase.

More reading

• Are the Rio Tinto, Fortescue and BHP share prices a buy right now?
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
• 5 things to watch on the ASX 200 on Tuesday
• 2 strong ASX dividend shares to bolster your income
• How to build a $20,000 passive income with ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MNF Group Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and MNF Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Is the Commonwealth Bank of Australia (ASX: CBA) share price a buy? The ASX bank sector has been roaring back to life in recent weeks.

Since 25 May 2020 the CBA share price has soared higher by 22%. The market seems to think that the $60 billion jobkeeper overestimation means the economy will be in much better shape. That jobkeeper estimation error was due to overly pessimistic forecasts according to reporting by the Australian Financial Review.

The performance of CBA’s earnings and share price is largely linked to the Australian economy. Indeed, every ASX bank relies on a solid national economy. CBA is exposed to the same sorts of systematic risks as Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ).

Where to now for the CBA share price?

The CBA share price is still down by around 19% from the level at 21 February 2020. So it’s not as though investors are pricing in a complete recovery for CBA yet.

The major bank made a $1.5 billion additional credit provision for the potential impacts of COVID-19 in its third quarter update.

If CBA’s provision is enough to account for all of the potential damage then it may in a much better position than investors were fearing a couple of months ago.

However, there’s one big factor I’m wary of. The official Australian interest rate is now incredibly low. This will likely cause a negative hit to CBA’s net interest margin (NIM). The NIM is important because banks generate a lot of their overall profit from the money they lend out.

I’m not sure how much higher CBA’s share price can go over the next couple of months. COVID-19 will cause a sizeable hit to the profit this year.

It will be interesting to see what CBA does with its dividend. ANZ and Westpac decided to defer the dividend. NAB decided to pay a much smaller dividend. After the recent strong share price increase for CBA, I’d be inclined to go for other shares first.

More reading

• The ASX bank dividend recovery may be better than what the market thinks
• Will ASX 200 shares hit a record high in June?
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points
• These quality ASX dividend shares have very juicy yields
• ASX 200 closes higher, banks keep rising

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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