US consumers seem to be in reasonably good buying mood of late, with reports of a decent holiday shopping season and a rise in the ABC/Washington Post consumer comfort index last week.
Investors, on the other hand, were concerned about the inversion in yields in the fixed income market. Reuters reports:
The U.S. Treasury yield curve inverted on Tuesday, with two-year notes yielding more than 10-year notes for the first time in five years in a possible signal the U.S. economic recovery is topping out...
The spread between 2-year and 10-year notes...oscillated between positive and negative throughout Tuesday, falling to a low of negative 1.4 basis points (0.014 percent).
Late in the afternoon, a price rise of 10/32 of U.S. 10-year notes put benchmark yields at 4.343 percent -- 0.4 basis point below two-year yields of 4.347 percent.
Stocks did not react too well to the yield inversion. The S&P 500 fell 12.12 points, or 0.96 percent, yesterday to close at 1,256.54.
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