Here's why the stock market is calmer this week

The markets are starting the week far calmer than last week. Three things have changed.

First: Wall Street is expecting the Federal Reserve to be slightly more dovish when it meets next week. Last Thursday, St. Louis Federal Reserve Bank President James Bullard said the Fed should consider delaying the end of its bond purchase program to halt the decline in inflation expectations, and although nobody expects it to keep the program going there is a substantial minority who believe they will leave in the phrase saying rates would likely remain low for a "considerable period."

The doves rule the day

Second: Oil has stopped dropping and is now simply languishing in the low 80's. Energy stocks have stabilized.

Third: Ebola concerns have eased. It was a huge relief that 43 of the 48 people on the original watch list in Dallas have passed the 21-day incubation period and appear to be in the clear. I've said many times that it is very difficult to model Ebola. It could be a trivial event, or it could prove to be a huge issue. If isolation procedures are beefed up--and if, as we are told, it is not an air-borne illness and it is unlikely it will mutate into one that could be, that will go a long way toward calming down everyone.

But what about IBM? Is IBM a "one-off" earnings and revenue miss? That's what the markets seem to be saying: IBM is not symptomatic of the earnings outlook.

IBM disappoints, but something had to give

I've heard the arguments all morning. IBM trades at a modest valuation for a reason: it doesn't see a lot of growth in IBM and hasn't for some time.

It's certainly true that other companies are picking up what IBM is losing, like, say, Workday. So if you own IBM, it's a problem, but if you own an index fund...even a tech-based index may not be so bad for you. Particularly if they have the younger, "growthier" names in them.

Now, I would be worried if this earnings miss started to impact "growthier" names.

But it's not yet. We even use the term "old tech" and "new tech" to denote this problem. Look at what SAP said overnight...lowering its outlook due to cloud-based competition. Old tech.

Look at Microsoft, which has this huge server business that is directly threatened by cloud computing. If companies go on the cloud, that's a problem for all those Windows servers Microsoft has in corporations all over the world. Old tech.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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