📊 How The USA Makes Money

1) Meta Lays Off 5% Of Staff 2) BlackRock AUM Hits New Highs 3) Big Bank See Profit Boom and more!

Happy Sunday!

Last week, the market buzzed with speculation about no rate cuts this year—and even murmurs of potential hikes. This week, things took a turn.

This serves as a stark reminder that while understanding macro trends is crucial, trying to predict them is close to impossible.

As Warren Buffett wisely put it, “The rearview mirror is always clearer than the windshield.”

On another note, I’ve updated my favorite investing tools list, now featuring over 20 of my favorite tools—some free, some paid.

  • These tools are absolute game changers and you’ll definitely find great value in them. Take a look!

Some key data bites from this week that you should know:

In today’s newsletter:

  • 🎹 Adobe Is Near 52-Week Lows

  • đŸšȘ Meta Lays Off 5% Of Staff

  • 📈 BlackRock AUM Hits New Highs

  • 🏩 Big Banks See Profit Boom

  • đŸ‡ș🇾 How The USA Makes Money

Let’s jump right in.

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Not every software company is thriving—not even a big name like Adobe.

Shares of the creative software giant have fallen 30% over the past year, hovering near 52-week lows.

Last month, Adobe delivered quarterly earnings that beat expectations, but its forecast disappointed investors.

  • For Q1, the company projects revenue of $5.66B at the midpoint, below the $5.72B analysts expected.

  • Fiscal 2025 guidance wasn’t much better, with a projection of $23.5B falling short of $23.8B estimates.

Analysts at Third Bridge, per Barrons, note that while concerns about AI disrupting Adobe have subsided, the company hasn’t shown clear progress in monetizing AI.

This has prevented it from being seen as an AI leader.

Meta is looking to do some trimming.

  • According to an internal memo, Mark Zuckerberg announced plans to lay off 5% of employees, targeting underperformers.

  • With 72,400 employees as of last quarter, this translates to about 3,620 layoffs.

Zuckerberg mentioned these roles intend to be backfilled in 2025, emphasizing “an intense year.”

Meta’s workforce has already seen major cuts, dropping 16% from its 2022 count of 86,400 employees.

  • The biggest drop came during its "Year of Efficiency," when headcount fell 22% to 67,300 in 2023.

Another quarter, another record for the world’s largest money manager.

  • The company saw $281B in Q4 inflows, pushing full-year net inflows to a record $641B.

  • Additionally, strong market performance, organic base fee growth, and higher performance fees drove full-year revenue up 14%.

CEO Larry Fink remains optimistic about the future, stating, “The economy is in very good shape.”

Banking giants had a banner year.

A strong economy bolstered profits, with many major banks seeing earnings soar 50% YoY and several reporting record annual profits.

  • Investment banking and trading played a key role, driving gains at Morgan Stanley, Goldman Sachs, and JPMorgan.

The outlook for banks also remains positive, with catalysts like a potential M&A boom and lighter antitrust regulation on the horizon.

Higher profits also meant big payouts.

Will we ever fix the budget deficit?

As President Trump prepares for his inauguration today, he faces an uphill battle.

Last week, the U.S. Treasury released its final budget report ahead of Trump taking office.

In the first three months of the 2025 fiscal year, the government posted a record $711B deficit.

  • This represents a 39% increase, or $201B more than the same period last year.

  • Total revenue fell 2% YoY, while spending surged 11% for the quarter.

Meanwhile, the U.S. national debt has crossed $36.3T and continues to climb rapidly.

đŸ”„ Thermal Bottleneck. Nvidia’s top customers are reportedly seeing delays due to overheating issues - TI

₿ Bitcoin Skeptic. JPMorgan CEO Jamie Dimon said he doesn’t feel great about Bitcoin and that it has no intrinsic value - QZ

🏩 Tariff Treasury. Trump announced plans to create an “External Revenue Service” to collect tariff income - AP

đŸ€ Gaza Truce. Israel’s government has approved a Gaza ceasefire - CNN

🎬 Short End. Hindenburg Research has announced that they will be shutting down - HR

đŸ’» Yellen Breached. Chinese hackers breached US Treasury Secretary Janet Yellen’s computer - BB

Courtesy of our partner EarningsHub—I may earn a commission if you upgrade.

Notable Companies Reporting Earnings Week of January 20th, 2025:

Major Trades Published 1/13 - 1/17. Trades may be those of family members. [Source: 2iQ]

Buys

  • Josh Gottheimer (D)

    • Company: Microsoft ($MSFT)

      • Amount Purchased: $1M - $5M

      • Description: Call options; Strike price $230; Expires 9/19/2025

    • Company: Microsoft ($MSFT)

      • Amount Purchased: $1M - $5M

      • Description: Call options; Strike price $240; Expires 9/19/2025

    • Company: Microsoft ($MSFT)

      • Amount Purchased: $1M - $5M

      • Description: Call options; Strike price $225; Expires 12/19/2025

    • Company: Microsoft ($MSFT)

      • Amount Purchased: $1M - $5M

      • Description: Call options; Strike price $230; Expires 12/19/2025

  • Jonathan Jackson (D)

    • Company: O’Reilly Automotive ($ORLY)

      • Amount Purchased: $15K - $50K

  • Rick Allen (R)

    • Company: Rollins Inc ($ROL)

      • Amount Purchased: $15K - $50K

Sells

  • Josh Gottheimer (D)

    • Company: Microsoft ($MSFT)

      • Amount Sold: $1M - $5M

      • Description: Call options; Strike price $240; Expires 12/19/2025

    • Company: Microsoft ($MSFT)

      • Amount Sold: $1M - $5M

      • Description: Call options; Strike price $235; Expires 1/16/2026

    • Company: Microsoft ($MSFT)

      • Amount Sold: $1M - $5M

      • Description: Call options; Strike price $230; Expires 1/16/2026

    • Company: Microsoft ($MSFT)

      • Amount Sold: $1M - $5M

      • Description: Call options; Strike price $230; Expires 1/16/2026

  • Kevin Hern (R)

    • Company: Citigroup ($C)

      • Amount Sold: $500K - $1M

    • Company: Devon Energy Corp ($DVN)

      • Amount Sold: $250K - $500K

    • Company: Johnson & Johnson ($JNJ)

      • Amount Sold: $100K - $250K

Major Trades Published 1/13 - 1/17

Buys

  • Opko Health ($OPK)

    • Insider: Phillip Frost (CEO & Chairman)

      • # of Shares Purchased: 650,000

      • $ Amount: $961,275

      • SEC Forms: [1], [2]

  • CME Group ($CME)

    • Insider: William Shephard (Director)

      • # of Shares Purchased: 1,369

      • $ Amount: $312,041

      • SEC Forms: [1]

Sells

  • Meta Platforms ($META)

    • Insider: Mark Zuckerberg (COB and CEO)

      • # of Shares Sold: 76,276

      • $ Amount: $46,522,421

      • SEC Forms: [1], [2], [3]

  • Airbnb ($ABNB)

    • Insider: Joseph Gebbia (Director)

      • # of Shares Sold: 214,285

      • $ Amount: $27,631,678

      • SEC Forms: [1]

  • Transdigm Group ($TDG)

    • Insider: Kevin Stein (President & CEO)

      • # of Shares Sold: 20,000

      • $ Amount: $25,344,186

      • SEC Forms: [1]

  • Reddit ($RDDT)

    • Insider: Steve Huffman (CEO & President)

      • # of Shares Sold: 124,408

      • $ Amount: $21,492,095

      • SEC Forms: [1]

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