Here are my thoughts as we wrap up another week:

• A fulcrum day, as it is clear that the first increase in the federal funds rate since June 2006 is imminent.
• "Kick save" at day's end.
• I expect increased volatility, in the markets and within different groups.
• I expect a downward bias in stock prices, as good news is bad news for markets. 
• Crude was lower, and I can't see with a rising U.S. dollar how that trend won't continue. Exxon Mobil (XOM) and Schlumberger (SLB) were both lower today and I pressed these shorts.
• Rs over Ss and Ns. The Russell 2000 Index was a standout -- the iShares Russell 2000 (IWM) was my "Trade of the Week" and I was wrong.
• Gold = schmeissberger.
• Bonds were the standout feature of the day, with large losses and increases in yields.
• Municipals suffered.
• Importantly, at least to me, the high yield bond markets are behaving junky. Let's watch this market in the days ahead.
• Financials with an imbalance of rate-sensitive assets over liabilities -- particularly the money center banks, brokerages and life insurance companies -- prospered mightily today.
• Biowreck was down a tad; Valeant (VRX) had a "dead cat" bounce.
• (T)FANG was mixed.
• On the other hand, the strength of the U.S. dollar weighed on multinationals, especially of a consumer staple kind.
• Rates are now on the ascent -- buybacks, activism and M&A will likely be peaking.  So is housing; Lowe's (LOW) and homewreckers were down on the day.
• Alibaba (BABA) was down on a Chanos diss. Yahoo! (YHOO) declined, and I am glad I sold out that position on the recent "strength."
• VIX lower -- higher complacency.

I added to my shorts today in a measured way.

As noted earlier today, I am of the view that the U.S. dollar will continue to rise and jeopardize multinational corporate profits.

At the epicenter of the U.S. dollar pressure are consumer nondurable companies. Consumer staples also face damaged moats of more generics and cheaper non-branded products to their formerly impenetrable lines of businesses.

Look at the shares of Procter & Gamble (PG), Colgate-Palmolive (CL), PepsiCo (PEP) and Coca-Cola (KO) today; this could be the tip of the iceberg of poor absolute and relative performance.

I have shorted Consumer Staples Select Sector SPDR ETF(XLP) to get representation in this short theme.

Here is the six-month chart.

After a two-year love affair, I am taking all the closed-end municipal bond funds off of my Best Ideas List this afternoon.

It should have been clear that I have been moving in this direction based on my comments in yesterday's "Takeaways" and in my Industry Update in late September (see below).

As I consistently have observed prior to today's weakness, the group has outperformed the bond market over the last month. That is, bond yields had risen (and bond prices had declined) while the value of closed-end municipal bond funds steadily had risen in price during October.

Though I continue to believe the projected interest rate rise will be slow and that the sector (up) will outperform the S&P Index (down) over the next year, I don't believe there is enough upside to justify keeping them on my list of favorite stocks.

Given the likelihood of a December rate rise and the uncertainty of future federal funds rate increases, investor sentiment in this group could sour over the next two to four months.

Yesterday, in my "Today's Takeaways and Observations," I had some cautionary remarks on my 12-month expectations for closedend municipal bond fund returns.  Here is what I wrote:

"Closed-end municipal bond funds are basically unchanged on the day. As I wrote at the end of September, I don't expect any/much capital appreciation in the year ahead, but I see the funds returning their dividends (annualized appreciation of about 6%). I believe this return will outperform the U.S. stock market over the next 12 months."

This follows a downgrade on the group I made back in September in "I Still Like Muni-Bond Funds (But Less So)." I am presenting that post in its entirety so you can see clearly my rationale.

I Still Like Muni-Bond Funds (But Less So)

SEP 22, 2015 | 8:48 AM EDT

The core of my bullish thesis for closed-end municipal bonds since December 2013 has been my outside-of-consensus view that:

• Interest rates would decline (which has occurred)

• The ratio between municipal-bond-fund yields and U.S. Treasury yields would contract and return toward an historic relationship seen in the 20-year period ending in 2006 (which has not yet occurred)

Closed-end muni-bond fund prices stem from some of the following factors:

• Interest rates' general levels (which have moved lower)

• The visible supply of municipal-bond issuances ahead (which is at normal levels)

• Credit spreads (which are contained)

• A change in the yield curve (which has seen some flattening)

• The relationship between taxable and non-taxable yields (stable)

• Municipal-bond-fund inflows vs. outflows (slightly negative)

The above factors have all been generally positive for the sector over the last two years, although the next two years are less certain.

A sharp run-up in the group in late 2014 and early 2015 (the mirror image of a December 2013 selloff where I instituted most of my buys) was likely caused by a resumption of fund inflows following a period of large outflows.

Clearly, retail psychology had a profound impact in both cases on valuations. I underestimated the salutary effect that a reversal early this year from outflows to inflows had on higher fund pricing and a narrowing relationship between prices to net asset values.

Still, I continue to believe that with non-taxable yields above 6% and a 10%+ discount to net asset value, closed-end municipal-bond funds remain attractive and provide a high-return alternative to cash, stocks or rival fixed-income options.

That said, I see modest-but-developing headwinds for the sector in 2016-17 that will likely preclude much capital appreciation above current distribution/dividend rates.

Most importantly, consensus has moved from an expectation of higher interest rates to an expectation of lower rates as global economic-growth prospects weaken. This could lead to a negative surprise for closed-end muni-bond funds if rates move higher and the Fed grows more hawkish.

Rising rates would lower the price of funds' underlying municipal bonds and lower fund NAVs. And in light of funds' typical 35% to 40% leverage, higher rates would also mean borrowing costs rise and distributions might decline modestly.

While interest rates aren't likely to experience a sharp move higher, it's my expectation that 2015 will mark the end of the 30-year bull market in U.S. bonds. That's why I've gone short on the iShares 20+ Year Treasury BondETF (TLT) and long on the ProShares Short 20+ Year Treasury ETF (TBF) against a portion of my closed-end muni-bond fund holdings.

Here are my principal concerns regarding the most important determinants to closed-end muni-bond prices:

There's Limited Room for Further Rate Drops

The 10-year U.S. Treasury yield has dropped to almost 2.10% over the last few weeks.

My calculus concludes that at current rates (and assuming a 0.7 multiplier to nominal GDP), the market is discounting about 1.6% real U.S. GDP growth for 2016-17.

Although that's well below consensus estimates, that seems about right. So, I find it hard to see the 10-year yield moving very much below 2.10% over the next year.

Any 2016 Rate Rise Will Likely Be Contained

I expect a slow but steady rise in interest rates. That means rates will no longer be a tailwind for closed-end muni-bond funds in the intermediate term.

Liquidity Concerns Exist (But Are Overblown)

Another potential headwind for the sector is a "run for the exits" if rate fears spook retail investors out of closed-end mini-bond funds.

These funds are relatively illiquid, as the sector is dominated by individual investors. So, any quick, herd-like exit could be disruptive and widen spreads between fund prices and NAVs.

It's hard for me to gauge the odds of such a scenario unfolding, so I plan to keep an eye on fund flows. They haven't been a concern so far, but that could change at any time.

The ratio of Taxable to Non-Taxable Yields

Finally, let's look at the relationship between municipal-bond yields and taxable yields, which previously formed the basis on my optimism for the group.

The spread between munis and Treasuries is currently about 105%, unchanged during the two years that I've owned the group. In other words, muni yields are slightly higher than taxable yields right now.

But if we go back in history, that ratio fell to between 80% and 100% from 1986 to 2006. During those years, municipals yielded a bit less than Treasuries did. The relationship hit 100% (the top end of its 20-year range) in the October 1987 market crash, and then returned there in during the 2001 recession.

Since then, the ratio spiked to an unprecedented 170% leading up to the 2008-09 Great Recession. But it later dropped below 100% in early 2011, rose back to 120% in late 2011 during the Euro debt crisis and the Jefferson County, Ala., bankruptcy and then flatlined at around 105% for the last several years. I still believe the ratio can go back under 100%.

The Bottom Line

"The dovish statement by the Federal Reserve last week provided momentary relief for battered investors in closed-end bond funds, a $167bn investment sector in the US that has suffered more than most in anticipation of rising interest rates.

The fear that rising rates will depress bond prices in the future has sent closed-end bond fund shares tumbling sharply below the value of their underlying assets. These discounts are now so wide that CEF shares offer some of the most enticing bargains on the market."

-- The Financial Times, U.S. Closed-End Money Funds Offer Bargain Buy (Sept. 21, 2015) (subscription required)

Interest rates are likely to embark on a steady but slow rise in the next two years. But unless the ratio of muni-bond yields to Treasuries reverts back towards 1986-2006 levels and inflows rise materially (reducing the discount to NAVs), I expect the sector's total annual returns to approximate the current roughly 6% distribution/dividend rates.

There's little prospect for capital appreciation. But from my perch, that 6% will still likely outperform stocks in both absolute and after-tax terms and should provide a good alternative to cash and other fixed-income instruments.

So, I continue to view the sector optimistically. But I'm no longer a buyer at current prices, preferring to see some weakness before I add to my existing positions.

"Why Valeant's Stock Hasn't Hit Rock Bottom," as found in The Wall Street Journal's "Heard on the Street."

Here were my recent comments on Valeant (VRX).

As I have posted, over the last two days I have moved substantially back net short.

Today I further added to my energy shorts and to my Index shorts in the morning rally.

I now view the market as substantially overbought and overvalued relative to the prospects for global economic growth and U.S. corporate profits.

The health of markets is often best seen in the participation in rallies. Importantly, the market's recent advance has been narrowing, which typically presages broader weakness.

In my view, those areas that have led -- energy and (T)FANG -- are particularly vulnerable in the weeks ahead.

I expect the Pavlovian reaction to the upside of groups that benefit from higher rates to get overdone over the near term, creating an opportunity to pare back or sell those positions.

On the other hand, sectors that are vulnerable to higher rates will become cheap and provide reasonably attractive entry points in the months ahead.

In other words, there will be a lot of volatility (reduce your "value at risk") and difference of opinion over the next one to two months. 

From my perch, the S&P Index has overshot to the upside and is materially above the level that I believe represents fair market value.

Higher interest rates should now be expected, raising the risk-free rate of return and reducing the discounted value of future cash flows.

Higher interest rates should also be U.S. dollar-friendly, representing appreciable risks and headwinds to non -U.S. S&P corporate profits (which are sizable).

History reminds us that, at inflection points, bull markets are borne out of bad news and bear markets are borne out of good news.

I plan to short any market rally in the weeks ahead -- and it is unclear, at this point, whether I will be covering unless the market correction is substantial.

A month ago the weak jobs report (bad news) was good news for the markets, fueling an unexpected 10% rise in the major indices.

Today a strong jobs report (good news) is bad news for the markets, and could result in lower stock prices in the month ahead.

Next week I will review each major market sector and explain my overall investment rationale, group by group.

Here's a succinct summation of the week's events from my pal Peter Boockvar of The Lindsey Group.

Positives:

1.) October payrolls grew by 271k, well more than expectations of 185k and mean reversion after the August and September weakness. There was a modest net upward revision of 12k in the two prior months. The U3 unemployment rate fell one-tenth to 5% as expected as the household survey grew by 320k at the same time the labor force grew by 313k. The participation rate held at the multi-decade low of 62.4%. The all-in U6 rate fell to 9.8%, down two-tenths and is now at the lowest level since May '08. The real positive (for employees, not for profit margins) within the data was the .4% rise in average hourly earnings and 2.5% y/o/y gain, the best since July '09. Bottom line, ADP on Wednesday said the average job gains over the past 3 months for the private sector were 185k. After today's BLS figure of 268k, the government's 3-month average is 181k for the private sector. For the full year, the private sector job gains are averaging 198k vs 254k in 2014.

2) The October ISM services index rose to 59.1 from 56.9 in September, 59 in August and 60.3 in July, and was well above the estimate of 56. Of the 18 industries surveyed, 14 saw growth vs 13 in September. The ISM said "After the slight cooling off in September, the non-manufacturing sector reflected growth across most of the indexes. Respondents remain mostly positive about business conditions and the overall economy."

3) Vehicle sales in October totaled 18.1mm SAAR, about 400k more than expected, up from 18.07mm in September and the highest since 2005.

4) Construction spending in September rose .6% m/o/m, one-tenth more than expected solely led by residential as non-residential construction fell.

5) Productivity in Q3 rose by 1.6%, well more than expectations of a drop of .3%, but the y/o/y gain is still an anemic .4% in Q3 and averaging just .5% over the past four quarters. Unit labor costs rose 2% y/o/y vs 1.6% in Q2, 1.2% in Q1 and 2.8% in Q4 '14.

6) The September trade deficit narrowed to $40.8b from $48b in August. That was about in line with expectations as exports bounced back by 1.6% after falling by 2% in August. Imports were down by 1.8% after rising by 1% in August.

7) China's Markit/Caixin services PMI rose to 52 in October vs 50.5 in September. The recent peak was 53.8 in July. The caveat was the future outlook: "Business sentiment at services companies eased to the lowest in ten years of data collection. Relatively soft market conditions and an uncertain economic outlook had reportedly dampened optimism towards the outlook for activity over the coming year."

8) Japan's final manufacturing PMI print was 52.4, the best in a year.

9) The services PMI in Japan rose to 52.2 from 51.4, India's index rose to 53.2 from 51.3.

10) The Eurozone manufacturing PMI's final read of 52.3 was up slightly from the initial print of 52. This index has had a 52 handle for 8 straight months. Italy was a bright spot and Germany was revised up, while Spain fell and France was left little changed.

11) The UK manufacturing PMI October index rose to 55.5 from 51.8 and above the estimate of 51.3. It's the best in 16 months, but Markit said the strength was narrow.

12) The UK services PMI rose to 54.9 from 53.3, and that was slightly above the estimate of 54.5.

13) Spanish industrial output rose by 3.8% y/o/y in September, above the estimate of 2.8%.

14) US savers who like certificates of deposits instead of the stock market to house some or all of their savings may actually get relief next month for the first time in almost 7 years.

Negatives:

1) Initial jobless claims jumped by 16k w/o/w to 276k vs the estimate of 262k. The 4-week average rises to 263k after last week's 259k, which was the lowest since 1973. Continuing claims were up by 17k.

2) Markit's view of US services was not as optimistic as the ISM as its index fell to 54.8 from 55.1, matching the lowest level since January. The bullet points from their release said: "Softer expansions of both business activity and new orders," "Employment growth weakens to 8 month low," "Business confidence remains historically weak."

3) The October ISM manufacturing index was 50.1, the lowest since May '13, down for a 4th month and vs 50.2 in September and a peak of 53.5 this year. It was in line with the estimate. Of the 18 industries surveyed, 7 saw growth, similar to the trend seen in September. Nine saw contraction vs 11 last month. The ISM said this about the report, "Comments from the panel reflect concern over the high price of the dollar and the continuing low price of oil, mixed with cautious optimism about steady to increasing demand in several industries."

4) Mortgage applications fell slightly w/o/w with purchases down by .6% and refi's lower by .9%. On a y/o/y basis the gains look better as purchases are up by 19.5% while refi's are higher by 4.4%. The purchase index is basically at the average seen over the past year.

5) German September industrial production figure dropped by 1.1% m/o/m instead of rising by .5% as expected, but offsetting this somewhat was a 6-tenths upward revision to the previous month. The y/o/y gain of .2% is the slowest since March. The German ministry said this, "German industry is feeling light headwinds from the global economy, especially because of the slowdowns in some larger emerging markets. Companies have reined in production somewhat in light of the modest development of manufacturing orders in the 3rd quarter. Business confidence in the industry remains good and speaks in favor of a temporary weak phase."

6) The services PMI in Europe was revised down a hair to 54.1 from 54.2 and compares with 53.7 in September and 54.4 in August. Germany's services PMI was revised down, but France was up and Italy and Spain saw m/o/m gains.

7) German factory orders in September fell 1.7% m/o/m vs the estimate of up 1%.

8) UK industrial production in September fell .2% m/o/m, one-tenth more than expected and August was revised down by a tenth. The manufacturing component was a hair better than expected, including the August revision.

9) The Chinese manufacturing October PMI of 49.8 has been hovering around the flat line of 50 over the past 12 months. The services PMI fell to 53.1, the weakest since December '08 from 53.4 last month.

10) The Caixin/Markit manufacturing PMI, which measures mostly private sector weighted firms, rose 1.1 pts m/o/m to 48.3, and while that is better than the estimate of 47.6, it is still below 50 in 10 out of the last 11 months.

11) Manufacturing PMI's remained below 50 for Taiwan, Malaysia, South Korea and Indonesia. India's PMI is now barely above 50 at 50.7, while Vietnam's rose .6 pts to 50.1.

12) The PMI in Hong Kong remained well below 50 at 46.6 from 45.7 last month and softened in Singapore to 50.2, a 5-month low from 51.4 in September.

13) South Korean exports in October fell 15.8% y/o/y, the worst since August '09. The estimate was 14.5%. Imports plunged by 16.6% vs the estimate of down 13.5%.

14) The cost of capital for corporate America and the US consumer is going higher.

I have pressed all of my shorts this morning.

I'll provide my rationale in a bit when I've returned to the office.

Peter Boockvar chimes in on the October U.S. jobs data:

"October U.S. non-farm payrolls grew by 271,000, well more than expectations of 185,000. There was a modest net upward revision of 12,000 in the two prior months, but the private sector in particular saw a 31,000 revision higher for September.

Services added 241,000 -- the most since May -- while goods-producing jobs grew by the most since January (solely led by construction, as manufacturing jobs were flat).

The headline unemployment rate fell one-tenth to 5% as expected, as the household survey grew by 320,000 at the same time the labor force grew by 313,000. The participation rate held at the multi-decade low of 62.4%, but the 'all-in' U6 rate fell to 9.8%, down two-tenths to its lowest level since May 2008.

But the real positive within the data was the 0.4% rise in average hourly earnings and the 2.5% y/o/y gain -- the best since July 2009. Average weekly earnings were up by 2.2% y/o/y vs. 2.3% in September, although hours worked were unchanged.

The bottom line: It's very encouraging to see a solid monthly job gain at the same time as better wage growth, but perspective is always important. On Wednesday, ADP reported 185,000 in average monthly private-sector job gains over the past 90 days. But after today's figure of 268,000, the government's three-month average is 181,000 for the private sector. Thus, the strong October figure is just a mean-reversion print from the soft numbers seen in August and September. For the full year, private-sector job gains are averaging 198,000 vs. 254,000 in 2014.

The headlines all day will be on the solid October print, but don't forget that it comes off of the weakness seen in August and September. That leaves the full-year trend little changed.

Either way, the Fed is now very likely to raise rates in December and the two-year Treasury yield is spiking to 0.91-0.92% to price that in. That's a level last seen in May 2010, and up from 0.84% right before the number came out this morning.

The fed-funds futures contract has boosted the odds of a December hike to 74%. The 10-year inflation breakeven is also higher by 2 basis points to 1.58%."

As I mentioned in Columnist Conversations, I'm in between appointments early this morning.

For now, I remain net short and plan to add on any strength.

We spend a lot of time at RealMoneyPro talking about the equity market, but not much on the important high-yield market -- so let's do a quick dive into "junk" bonds this morning.

I have a long position in the Blackstone/GSO Strategic Creditclosed-end fund (BGB), which consists primarily of secured bank loans and higher-yielding bonds (i.e., below investment grade).

It's a relatively large fund ($745 million in assets) that offers a diversified portfolio and yields approximately 8.6% (monthly distributions are $0.105/share). The portfolio has an average maturity of less than 18 months, and the fund currently trades at around $14.50 a share -- about a 13% discount to BGB's $16.65 net asset value.

While much of high-yielding distressed and energy debt have been making new lows recently, there's been a solid rally in generic higher-quality junk bonds.

Loans have bounced a bit, but not much. And the market remains bifurcated between higher-quality, sought-after bonds and lower-quality ones that are illiquid and vulnerable to further losses on any hint of a weaker quarter or negative headline.   

Let's look at some charts.

First, check out the Deutsche Bank high-yield yield-to-worst and high-yield spreads over the last four months:

Source: Bloomberg

Next, let's look at how the S&P Leveraged Loan 100 Index and high-yield ETFs performed over the last four months:

Source: Bloomberg

And here's Deutsche Bank's rundown of the cash price for cash conversion cycle (CCC) and "BB" bonds during the last four months:

Source: Bloomberg

And here's a chart showing the Deutsche Bank CCC spreads and "BB" spreads over the past four months:

Source: Bloomberg

Finally, let's look at inflows into the sector:

Source: Bloomberg

Higher-quality high-yield bonds have benefited from a surge of inflows over the past five weeks, whereas leveraged loans haven't. This probably accounts for a fair amount of leveraged loans' underperformance.

Additionally, $5.7 billion -- or roughly 60% of the past five weeks' inflows into the high-yield market -- have gone into ETFs. It's "easy come/easy go" with ETF flows; we'll see if this demand dries up after October's risk-on move.

Peter Boockvar's commentary this morning includes a discussion of the Federal Reserve, plus data from Germany, Spain and Britain:

"It was Oct. 2, the date of the last U.S. payroll number, that the stock market's rebound really got going. After a 30-point drop in the S&P 500 in immediate response to the weak number, the market celebrated with an almost 30-point rally by the close on the thought the Fed would not be raising rates for a while.

We, of course, have now further embraced the rally on the growing belief that the Fed finally will raise rates. One thing that should be clear is that the Fed-imposed bar for a rate hike, which continuously got raised over the past few years, has dropped all of the sudden. Thus, the context of a possible rate hike isn't what it used to be (the Fed has never hiked when the Institute of Supply Management index was at 50 or below).

But the monetary world we now live in isn't what it used to be, either. Headline expectations for today's U.S. jobs report are for a 185,000 payroll gain, with the private sector contributing 169,000 of that. I also expect the Labor Department to revise the September 118,000 private-sector figure upward, as ADP believes it should be closer to 200,000 after two 'walk' looks.

Analysts expect the October unemployment rate to tick down by one-tenth to 5% and continue its multi-year trend of falling about one-tenth per month (which means we'll likely have a sub-5% handle by year's end).

To the point of lowering the Fed bar, Reuters interviewed St. Louis Fed chief James Bullard last night and reported: 'U.S. central bankers may need to mount a new communications campaign to convince markets and the public of a counter intuitive idea: that slowing monthly job growth is natural at this point in the recovery, and will allow the Fed to stay on track for a likely December rate hike.' We are certainly not in Kansas any longer!

I say the U.S. economy was generating an average of 260,000 jobs in 2014 when they should have hiked vs. just below 200,000 in 2015. And now they want to hike.

With the market recently cheering both no hike and the likelihood of one, I'd have no idea how the market would respond even if I knew what the payroll number would be. I guess the best outcome would be a strong number, which would be good for the economy. And if the Fed is raising rates regardless of today's report (assuming no really weak figure), it'd be good for markets to believe the economy can overcome a rate hike. (I know, it's a measly 25 basis points.)

On the other hand, what the market might not like is another print that's mediocre but good enough for the Fed to raise rates. I want to repeat that there's no question that I want a hike so that we get off of this dangerous drug of 0% rates. But don't for a second assume that the process ahead will be smooth. A rate hike isn't the beginning of the tightening; that happened in October 2014 when Quantitative Easing ended.

In Europe, Germany's September industrial production figure came in soft one day after a weak factory-order number. September IP dropped by 1.1% m/o/m, instead of rising by 0.5% as expected. But a six-tenths upward revision to the previous month's number somewhat offset that. Still, the 0.2% y/o/y gain seen was the smallest since March. Weakness was broad-based, as industrial production fell a m/o/m basis for capital and consumer goods, manufacturing/mining and construction.

The German ministry said: 'German industry is feeling light headwinds from the global economy, especially because of the slowdowns in some larger emerging markets. Companies have reined in production somewhat in light of the modest development of manufacturing orders in the third quarter. (But) business confidence in the industry remains good and speaks in favor of a temporary weak phase.'

Germany's third-quarter GDP figure will be released next week. The euro is little changed today, while the DAX is down about 0.25%. But I'm sure everyone over there is waiting on the U.S. payroll report.

In contrast to the German weakness, Spain reported its industrial output rose by 3.8% y/o/y in September -- above the estimate of 2.8% and continuing a run of good data. But the IBEX has been a laggard this year, and it's down by about 0.66% today. It's also essentially flat on the year and down 9% in U.S. dollar terms.

In other news, take it with a grain of salt because he's a known hawk, but European Central Bank member Ardo Hansson said in an interview today: 'Knowing what I know now, I don't think the ECB should act' further on more QE. On the possibility of a further cut to the deposit rate, he said: 'If we were to go down the path of a deposit-rate cut, it would seriously undermine the concept of forward guidance. Once you engage in a specific forward guidance and don't follow through, then you erode credibility.' The euro didn't respond.

U.K. September industrial production fell 0.2% m/o/m, one-tenth more than expected. August was also revised down by one-tenth. Not surprisingly, mining and oil/gas were particularly weak.

The Bank of England was dovish in a statement yesterday. But then BoE Gov. Mark Carney said today in an interview with Bloomberg that he'd like to raise rates in 2016. But as mainland Europe is a huge market for U.K. exporters, ECB chief Mario Draghi has mucked up any BoE plans to hike rates anytime soon given the fears of what a stronger pound vs. the euro would do. As we all know (and as I said the other day), central banking now is all about FX.

In Asia, Chinese authorities took a step after markets closed to normalize things after the summer's craziness. They plan to start allowing IPOs again after imposing a freeze in June. Earlier, the Shanghai index rose 1.9% to hit its highest close since Aug. 20. It's up 6% on the week."