Nyse Order Imbalance 48115.0 Shares On Sell Side

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official boosted hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Regional Banks company Commerce Bancshares jumped 2.8%. Is now the time to buy Commerce Bancshares? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Bank of Hawaii jumped 2.8%. Is now the time to buy Bank of Hawaii? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company SouthState jumped 2.7%. Is now the time to buy SouthState? Access our full analysis report here, it’s free for active Edge members.
• Thrifts & Mortgage Finance company PennyMac Mortgage Investment Trust jumped 2.7%. Is now the time to buy PennyMac Mortgage Investment Trust? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Commerce Bancshares (CBSH)

Commerce Bancshares’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 4.7% on the news that the company reported third-quarter financial results that missed analyst expectations for both revenue and earnings per share. 

The bank reported earnings of $1.06 per share, falling short of the consensus estimate of $1.10. Revenue for the quarter came in at $441 million, missing forecasts of $446.4 million. Delving deeper into the results, other key metrics also failed to meet expectations. Net interest income, a crucial measure of a bank's core lending profitability, was $279.5 million, below the consensus estimate of $285.7 million. Additionally, the bank's efficiency ratio of 55.3%, a measure of expenses relative to revenue, was weaker than the 54.7% analysts had projected. Overall, the broad-based misses pointed to a challenging quarter for the bank.

Commerce Bancshares is down 12% since the beginning of the year, and at $54.36 per share, it is trading 23.2% below its 52-week high of $70.82 from November 2024. Investors who bought $1,000 worth of Commerce Bancshares’s shares 5 years ago would now be looking at an investment worth $1,018.