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HEADLINES
What You Need To Know

California wildfires are causing major losses for insurers, with Allstate, Chubb, Mercury, and Travelers seeing sharp sell-offs Friday. Estimated insured losses could top $20 billion, surpassing the record $12.5 billion from the 2018 Camp Fire. JPMorgan warns Chubb may be hit hardest due to its high-net-worth clients in the region. Reinsurers like Arch Capital and RenaissanceRe also fell on concerns of rising claims breaching reinsurance limits.

Meta is ending its third-party fact-checking program and shifting to a "Community Notes" system similar to Elon Musk’s X, aiming to promote “free expression” and reduce censorship complaints. CEO Mark Zuckerberg said the move reflects a cultural shift, emphasizing that prior fact-checking efforts were too politically biased and damaged user trust. Meta will simplify content policies by removing restrictions on topics like immigration and gender and relocating its moderation teams to Texas.

Disney is merging its Hulu+ Live TV service with Fubo, creating a new powerhouse in the Internet TV bundle market. Disney will own 70% of the combined company, with Fubo shareholders holding the remaining 30%. The two services will still operate separately, but the deal instantly positions Fubo as a top streaming player.

Federal Reserve Governor Michelle Bowman said she supported December’s interest rate cut but doesn’t see the need for further reductions. Bowman, known for her hawkish stance, believes inflation risks remain too high and that rates are now near a “neutral” level.

Nvidia unveiled its GeForce RTX 50-series chips, bringing its cutting-edge Blackwell AI architecture to gaming laptops and PCs. The chips will debut in March and are optimized for both gaming and AI tasks, marking a convergence of Nvidia's gaming and AI tech. CEO Jensen Huang highlighted the chips' ability to enhance game graphics and even power AI models from companies like Meta and Stability AI.

🎯MATT ALLEN’S TAKE: This company is going bankrupt due to the wildfires…upgrade to premium now to read the full take!

UPCOMING
What You Need To Watch

On Tuesday, the Producer Price Index (PPI) will be released, giving insight into inflation from the seller’s side. This report shows how much businesses are paying for goods and services, which often trickles down to consumers.

On Wednesday, the Consumer Price Index (CPI) report will be released. This is the key inflation number everyone watches. It shows how much prices are rising for everyday goods and services.

On Thursday, the December Retail Sales report will drop, showing how much consumers spent during the holiday season. This report is key for gauging consumer strength.

Earnings season kicks off with some heavy hitters this week. On Wednesday, we’ll hear from JPMorgan, Wells Fargo, BlackRock, Citigroup, and Goldman Sachs—giving us a clear look at how banks handled the recent rate cuts. Then on Thursday, Taiwan Semiconductor, UnitedHealthcare, Bank of America, and Morgan Stanley will report.

TIP
Earnings Report

Earnings reports are goldmines of information—but most investors stop at the headlines. If you dig deeper, you’ll find clues about a company’s health that most people miss. Take Apple’s earnings report as an example. It might say they made $20 billion in profit, but don’t stop there. Check where the revenue is coming from. Is it growing in high-margin segments like services or slowing down in hardware? Look at gross margins to see if they’re improving efficiency. Also, pay attention to future guidance. If a company beats earnings this quarter but lowers its outlook for the next, it could be a red flag. The market reacts more to what’s coming than what just happened.

CHART
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TERM
Price-To-Free Cash Flow (P/FCF)

The Price-to-Free Cash Flow (P/FCF) ratio measures how much investors are paying for a company’s free cash flow—cash that’s left after covering expenses and capital investments. It’s calculated by dividing the company’s market cap by its free cash flow. For example, if a company’s market cap is $5 billion and its free cash flow is $500 million, the P/FCF ratio is 10. A lower P/FCF ratio can signal that a stock is undervalued, while a higher ratio might suggest investors expect strong future growth. This metric is especially useful for identifying companies with healthy cash flows that can fund growth, pay dividends, or reduce debt.

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