It was a great week for markets around the world, after last week's slump. Emerging markets did the best, gaining almost 5% for the week, while Europe pulled up the rear, but still gaining a healthy 2.4%. The S&P 500 was up over 3.5%. Bond yields were down and prices were up. Commodities were yet again the only big loser, off 0.8%. Inventory data later in the week had a depressive effect on oil prices.

Investors got comfortable with a December rate increase this week, with well over 70% of participants now believing that the first rate hike was likely to happen in December. Even the release of the U.S. Federal Reserve minutes on Wednesday didn't turn investors negative despite the hawkish tone. Paradoxically, we believe that markets now are thinking that if the Fed is so clearly signaling a rate increase, it must be seeing a stronger economy. Good earnings data, especially out of Home Depot (HD) and Lowe's (LOW), didn't hurt matters, either. And the success of two high-profile initial public offerings in the aftermarket, following a series of poor IPOs, helped market psychology along, too. More rate easing in China, along with at least a temporary bottom in real estate prices in some Chinese regions, helped that market, while continued rumors of more quantitative easing in Europe seemed to help many emerging and European markets to move forward.