The first full trading week of 2026 is approaching, and this week is destined to be extraordinary. Key indicators such as manufacturing and services data, job openings, and non-farm payrolls will be released in quick succession, with non-farm payrolls being the highlight that can directly influence market expectations.

Currently, the market is pricing in an increase of 55,000 jobs. But the real variable is the deviation from this expectation. If the data shows a mild slowdown to a range of 50,000-80,000, the Federal Reserve will have a pretext to continue cutting interest rates, which would be positive for stocks and risk assets. Conversely, if the number drops to 0-40,000 or even lower, the market will start to reassess—are we heading for a "soft landing" or is a "recession on the way"? This uncertainty is precisely why many investors are optimistic but hesitant to increase their positions now.

Interestingly, many expect the data to "just right" weaken this time. The reason is straightforward: after the U.S. Bureau of Labor Statistics director was replaced, almost all key data has shown a trend favorable to the stock market. This phenomenon itself is worth pondering.

Currently, the divergence between the market and the Federal Reserve has become evident. The market bets on two rate cuts in 2026, while the Fed's official dot plot shows only one, with significant internal disagreement—both sides are essentially "betting" on whether the U.S. economy will continue to weaken.

Recently, Philadelphia Fed President Collins made her first statement of the year. Her wording was quite telling: further rate cuts may take some time. This implies that the possibility of a rate cut has not been ruled out, but the specific timetable is not determined by the market.

From the perspective of the dollar and U.S. stocks, the dollar did rise on the first trading day of the new year, but Wall Street's attitude was quite indifferent—this is just repositioning, not a change in conviction, nor a logical reversal. Because this "disbelief in a dollar reversal" mindset is widespread, once the dollar continues to strengthen, the market will face a "forced admission of mistake" scenario. This underlying pressure could create quite a few waves in the coming weeks.