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Former Fed Chief Says Soft Landing Still Possible

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We continue to seek equilibrium in today’s trading market. After last week’s strong series of sessions gave way to a bit of a sell-off by Friday, yesterday began a new week in the green (24 hours ago) but closed mixed. Fed member appearances and various retailers reporting Q1 earnings are so far leading the market trajectories. The Dow is currently down -65 points, the Nasdaq -40 and the S&P 500 -10.

Ben Bernanke, in a new paper written with the help of ex-Chief Economist of the International Monetary Fund (IMF) Olivier Blanchard, asserted that a “soft landing” for the U.S. economy is still attainable. However, in the writing the economists say the overheating labor market can only be affected by monetary policy. This appears to be a reference to the Fed continuing to raise interest rates, though this has not been explicitly stated.

Philly Fed Services are also out this morning, marking an improvement to -16 — though obviously still a negative number. The previous print, -22.8, was the lowest monthly performance since December 2020, and we have not seen a positive figure from this release since a relatively anemic +3.2 in July of last year. Count this among data that is curbing the inflation narrative, aka “bad news is good news.”

Dick’s Sporting Goods (DKS - Free Report) is one of the latest retailers reporting quarterly earnings this morning, with results typically above expectations: earnings of $3.40 per share easily supplanted the $3.22 expected (and notably higher than the $2.85 per share reported a year ago), on sales of $2.84 billion in the quarter, amounting to a +0.88% beat. It’s the 12th straight quarter of positive earnings surprises, of which the trailing four-quarter average is +10%. Shares are up +2% in the pre-market, adding to the puny +5% gains year to date. For more on DKS’ earnings, click here.

After today’s open, we’ll see New Home Sales data for April. Expectations are for 665K last month, down notably from the 683K reported a year ago. For Existing Home Sales, which came out last week, results came in higher than expectations but lower month over month. A total of 4.28 million existing homes were sold in April — this is clearly the lion’s share of the housing market today. Or at least of 4-6 weeks ago.

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