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."
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.