Calm Waters For Now

The S&P 500 recovered nicely on Friday after it reacted badly to the morning's stronger-than-expected November payroll report, especially the higher-than-expected gain in wages. The knee-jerk reaction was that the end of the Fed's monetary tightening cycle would take longer to occur.

But by the end of the day, the S&P 500 was down just 0.12% and remained above its 200-day moving average (chart). That's because the 10-year Treasury bond yield actually edged down to 3.49% by the end of the day. The 2-year Treasury note yield did rise but only to 4.29%. A month ago it was 4.73%.