The Reuters/University of Michigan Consumer Sentiment report rose to 82.5 for the preliminary December report, from a final November reading of 75.1. Dow Jones was calling for only 76.5, and Bloomberg had the consensus at 75.5.

What stands out here is not just that this was the best reading since July, but how much sentiment improved above and beyond a marginal uptick that was expected by economists.

The current conditions rose to 97.7 for December, versus 88.0 for the November reading. A large, but smaller, gain was seen in the expectations component with a bump to 72.7 from 66.8.

Stronger jobs, stronger sentiment and mixed at-store retail spending for the holidays are all coming together.

What we are seeing is a stock (and bond) market that is trying to look past the tapering effects of the $85 billion in monthly bond buying under the Federal Reserve’s quantitative easing program.

The S&P 500 was up almost 16 points and back at 1,800, and the DJIA was up 140 points and still about 40 points under the key 16,000 mark again. Bond yields are getting close to key thresholds again: the 10-year Treasury yield was 2.86% and the 30-year Treasury yield was 3.90%.

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