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HEADLINES
What You Need To Know

Wall Street investment banks just posted record-breaking fourth-quarter results, fueled by surging trading activity around the U.S. election and a resurgence in deal-making. JPMorgan saw trading revenue jump 21% to $7 billion, while Goldman Sachs’ equities division hit a full-year record of $13.4 billion. With expectations of lower corporate taxes and smoother deal approvals, banks like Morgan Stanley see their strongest merger pipeline in over a decade, signaling more big deals and higher earnings ahead.

SpaceX’s latest Starship test flight ended in failure after the rocket lost communication and broke apart during its ascent. Debris from the vehicle was spotted over the Caribbean, and the FAA is assessing the incident. Despite the setback, SpaceX successfully landed the Super Heavy booster, marking another step forward in Starship’s development.

Target has raised its fourth-quarter sales forecast, expecting a 1.5% growth in comparable sales as shoppers flocked to its stores and website for holiday deals. However, the retailer kept its profit outlook unchanged, signaling that discounts played a big role in driving demand. Target will report full results on March 4..

Meta is set to cut about 5% of its workforce, targeting low-performing employees as part of CEO Mark Zuckerberg's push for higher performance standards. In an internal memo, Zuckerberg described 2025 as an “intense year” and emphasized the need to focus on core priorities like AI and the future of social media. Impacted employees will be notified by February 10, with severance packages similar to past layoffs.

UPCOMING
What You Need To Watch

The Stock Market will be closed on Monday in observance of Martin Luther King Jr. Day.

On Monday, President Donald Trump will be inaugurated as the 47th President of the United States.

On Tuesday, MicroStrategy shareholders will vote on a proposal to authorize $10 billion in new shares, with the goal of funding additional Bitcoin purchases.

Earnings season continues with major reports this week. On Tuesday, 3M and Charles Schwab will release their earnings before the market opens, with Netflix reporting after the close. Wednesday will feature reports from Johnson & Johnson and Procter & Gamble before the bell. On Thursday, General Electric and Union Pacific will report in the morning. Wrapping up the week, American Express and Verizon will release their earnings on Friday before the market opens.

TIP
Covered Calls

Once you’ve built a solid stock portfolio, covered calls can be a great way to generate extra income without selling your shares right away. This strategy involves selling call options on stocks you already own, earning a premium in exchange for agreeing to sell your shares at a set price if they reach that level by a specific date. For example, let’s say you own 100 shares of Apple, currently trading at 229 dollars. You could sell a covered call with a strike price of 240 dollars, collecting a premium of 3 dollars per share. That means you’d receive 300 dollars in immediate income just for agreeing to sell your shares if Apple reaches 240 dollars before the option expires. If Apple stays below 240 dollars, you keep your shares and the premium. If it surpasses 240 dollars, you sell at a profit while still pocketing the premium. Covered calls are a great way to generate passive income on stocks you already own, especially if you believe they will stay relatively stable in the short term. Just remember, the trade-off is that your upside is capped if the stock soars past your strike price.

CHART
Sold Early

TERM
Price-To-Operating Cash Flow (P/OCF)

The Price-to-Operating Cash Flow (P/OCF) ratio measures how much investors are paying for a company’s operating cash flow, which reflects the cash generated from core business operations. It’s calculated by dividing the market capitalization by operating cash flow. For example, if a company has a market cap of $10 billion and generated $2 billion in operating cash flow, its P/OCF ratio would be 5. This ratio is useful for assessing a company’s ability to generate cash to fund operations and growth.

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