DC Lite #425

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1. Business inflation expectations. Firms' expectations for year-ahead inflation ticked down in August (unchanged at 2.3% unrounded).

2. BTC capital inflows. "When we compare the current rate of capital inflows to the previous ATH breakouts, the realized cap has increased by a substantially smaller percentage than it did during the March and December ATHs in 2024 ... This softer period of capital inflow highlights the notably lighter appetite of demand from investors at this stage."

3. Retail activity. "Net buyers [of US equities] in 16 of the last 18 weeks, rebounding after April weakness ... retail clients have been buyers for 19 consecutive months of both net notional and shares buying."

4. VIX seasonality. "Historically speaking, the CBOE Volatility Index (VIX) tends to reach its seasonal low in July or early August and begin climbing towards its seasonal high, typically in the month of October."

5. R2K EPS estimates. "On Friday, Powell may not guide the market towards a September cut ... EPS expectations for small caps are already extremely bullish, with earnings expected to grow by more than 80% over the next two years. Should interest rate relief be delayed, small caps will likely underperform."

ICYMI