Stock market waiting for a deluge of economic data.

1. Bad economic news could be good news for stocks.

Sentiment seems a little shaky, with rising signs of skepticism over AI and debate about the extent of rate cuts next year.

Weak jobs data could boost stocks as it would raise the probability of more rate cuts, according to Morgan Stanley strategists. The “good is bad/bad is good” trade is back, Michael Wilson wrote. The number will also be critical for bond traders, who are betting on two rate cuts next year — one more reduction than the Fed is indicating.

2. “Rate cuts would help the U.S. Treasury reduce the costs of financing $30 trillion in government debt”, Trump said.

Bond investor Jeffrey Gundlach told clients that the continued rate cuts could be “an unspoken strategy” to lower the government’s interest expense since overnight rates affect short-term Treasury bill costs directly.

With interest on federal debt over $1 trillion—more than military spending—reducing the average 3.4% yield on marketable debt could be meaningful.

Rate cuts could trim the federal interest bill by hundreds of billions of dollars.

3. The Bank of England meets this week, and a rate cut is nearly priced in, with another one expected by June.

A potential bright spot lies in interest-rate sensitive stocks.

JPMorgan’s Matejka argues there is room for deeper cuts in 2026 than the two currently priced in by money markets, which could lift homebuilders, real estate and consumer-exposed sectors.

4. Gold close to double-top resistance.

“Gold has resumed its broader uptrend after clearing two successive daily fractal tops, signaling that the recent consolidation phase is likely complete,” said Gnanasekar Thiagarajan, director of Commtrendz Research.

Weekly trend and momentum indicators remain bullish, keeping alive the scope for an extension toward the $4,430 zone, and higher if follow-through buying emerges Any short-term pullbacks toward $4,260/$4,235 are likely to be corrective in nature, with a stronger structural support placed near $4,180. “Only a sustained dip below the weekly super trend near $3,920 would warn that a deeper corrective phase is unfolding,” he said.

5. Investors worry about depreciation expenses from the data center binge.

Alphabet, Microsoft and Meta combined for about $10 billion in depreciation costs in 4Q 2023. That figure rose to nearly $22 billion in 3Q this year, and it’s expected to be about $30 billion by this time next year.