DC Lite #222

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1. CPI vs. easing cycles. “Inflation is not an impediment to Fed easing at these levels. CPI was above the current pace of 2.4% year over year at the start of 10 of the Fed's 11 other major easing cycles since 1971, and was even above the current level by the end of seven of those cycles.”

2. November FOMC. The probability of a 'skip' at the November meeting is rising. 

3. Cash allocation. "Non-bank investors globally have significantly reduced their cash allocations, reaching the lowest levels observed since at least 1999."

4. EM equity fund flows. EM equities saw record inflows last week (+$40.9bn) driven by record flows into China (+$39.1bn).

5. EPS growth: estimates vs. actuals. And finally, “based on the average improvement in the earnings growth rate during the earnings season, the index will likely report year-over-year growth in earnings above 7% for the third quarter.”