💰 Maniac Minute: All That Glitters Is Gold

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Good morning, Maniacs!

Eggs aren’t the only thing that’s expensive—so is the stock market.

The S&P 500’s forward P/E ratio has risen to 22.1, well above historical averages. But with Q4 earnings growing at their fastest pace since 2021, investors are willing to pay up.

After all, stocks have persevered—standing the test of high standards, high interest rates, and relentless political turbulence.

Meanwhile, the economy keeps grinding.

Unemployment dipped to 4%, wages are rising, and Trump is tossing curveballs left and right—floating new tariffs, fighting for federal employee buyouts, and reviving his push to kill the private equity tax loophole.

Let’s break it all down!

Market Recap 📈

Stocks logged their second straight weekly decline, but considering the chaos—it could’ve been much worse.

Traders endured a whiplash-inducing week as tariff threats came and went. Trump floated new levies, then delayed them, only to tease more reciprocal tariffs—keeping markets on edge.

Despite the volatility, strong earnings kept stocks afloat. So far, 62% of S&P 500 companies have reported, with 77% beating estimates. If the trend holds, Q4 earnings growth is on track for 16.4%—the fastest clip since 2021.

Another tailwind? Falling Treasury yields.

The 10-year yield neared 4.4% midweek before ticking back up to 4.5% after strong labor data gave the Fed little reason to cut rates anytime soon.

Meanwhile, commodities painted a mixed picture:

• Oil slid for the third straight week as softer demand forecasts and rising U.S. production weighed on prices.

• Gold soared to yet another all-time high, nearing $2,900 per ounce, fueled by central bank buying, sticky inflation, and geopolitical risks.

• Bitcoin remained rangebound between $95K and $105K, despite steady buying from MicroStrategy and ETFs.

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Winners & Losers 🚀

AI hype, beauty blunders, and surprise profits—this week’s biggest stock movers tell a story of shifting investor sentiment. Here’s who’s riding high and who’s feeling the heat.

Winners

1. Palantir ($PLTR) – Market Cap: $252.5B (+34.4%)

Palantir just went parabolic. The AI-driven analytics firm crushed earnings, with Q4 revenue up 34% YoY and earnings smashing estimates. CEO Alex Karp called Palantir “the center of the AI revolution,” and investors ate it up. The stock is now up 5x in the past year—but at 70x next year’s sales and 200x next year’s earnings, it's priced like it’ll stay in hypergrowth mode forever.

2. Affirm ($AFRM) – Market Cap: $23.4B (+23.2%)

Affirm stunned the street, posting an unexpected $0.23 profit per share when analysts expected a loss. Revenue soared 47% YoY, while its "buy now, pay later" model drove a 35% jump in transaction volume. With its stock up 70% in the past year, Affirm is gaining market share while proving that BNPL isn’t just a pandemic-era fad.

3. Pinterest ($PINS) – Market Cap: $27.0B (+21.4%)

Pinterest just posted its first-ever billion-dollar revenue quarter, but the real story is its AI-driven ad surge. Monthly active users hit 553M (+11%), and AI-powered bidding and targeting tools boosted ad conversion by 90%. Management highlighted new ad innovations aimed at maximizing advertiser returns—and turning Pinterest into a digital shopping powerhouse.

Losers

1. e.l.f. Beauty ($ELF) – Market Cap: $4.0B (-28.8%)

From viral sensation to valuation correction—e.l.f. Beauty is taking a breather. The cosmetics brand delivered 31% revenue growth, but soft January sales forced it to cut full-year guidance. Analysts downgraded the stock, citing weaker social media buzz, a widespread cosmetics slowdown, and potential tariff risks (since 80% of its production is in China). Now down nearly 70% from its all-time high, there’s no concealing the fact that e.l.f.’s momentum is fading.

2. Estee Lauder ($EL) – Market Cap: $23.4B (-22.1%)

Estee Lauder’s struggles aren’t just skin deep. Revenue fell 6%, and the company slashed its profit outlook as Chinese demand continues to crater. New CEO Stéphane de La Faverie launched a “Beauty Reimagined” turnaround plan, focusing on product innovation, marketing expansion, and cost-cutting—but analysts remain skeptical. Estee even wrote down the value of its Tom Ford and Too Faced brands, signaling deeper brand struggles.

The Hidden Cost Of Holding Cash 💸

Cash feels safe. It doesn’t crash like stocks or fluctuate like bonds. But over time, holding too much of it is like treading water—you might be moving, but you’re not getting anywhere.

Why? Inflation.

Even with a 4% to 5% money market yield today, inflation at 3% or 4% means your real return is close to zero. Or, put another way, your buying power is barely increasing.

Historically, stocks and bonds are the way to outpace inflation.

Here’s the punchline: Even with the worst possible timing, stocks beat cash over the long run.

A Fidelity analysis found that a $5,000 annual investment in the S&P 500 since 1980—made at the very peak of each year—would still have grown to over $4.2 million. Keeping that cash on the sidelines? Just $350K.

That’s a 12x return for being invested in stocks—even with the worst possible timing!

Too many investors hoard cash, waiting for a mythical market crash that may never come. But history is clear: "Time in the market beats timing the market."

Bottom line? Cash has its place—for emergencies and short-term needs—but keeping too much on the sidelines is just losing in slow motion.

Worth The Read 📚

🏆 Gold demand is off the charts. Central banks are hoarding the precious metal at record levels, pushing prices toward $2,900 an ounce. With rate cuts and tariffs on the horizon, could gold be heading even higher?

📈 Retail traders are going all in. JPMorgan reports that individual investors just set new records, pouring billions into Big Tech at a pace even faster than the meme-stock frenzy of 2021. Is this a bullish signal—or a warning sign?

📉 Trump targets a hedge fund tax break. The White House says he wants to close the carried interest loophole, a long-standing perk for private equity giants.

🏛 A federal judge just hit pause on Trump’s buyout plan. Over 60,000 federal employees had already accepted the voluntary exit package, but a last-minute ruling could throw the whole initiative into legal limbo.

🚀 Crypto’s retail revival is in full swing. A new report highlights the return of small investors to digital assets, with Solana leading the charge.

🏠 Fannie and Freddie privatization is back in focus. HUD’s new chief says he’s pushing to cut government ties to the mortgage giants, boosting Ackman’s public bet.

💰 401(k)s just hit a tipping point. For the first time, over half of private-sector workers are now saving in these plans. With new laws pushing automatic enrollment, the shift away from pensions is nearly complete.

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The Week Ahead 🔍

It’s an earnings avalanche! Nearly 80 major companies spill their numbers this week, giving us fresh insights into consumer spending, tech trends, and travel demand. On top of that, we’re getting key inflation reports, a federal budget update, and a retail sales check-in.

Monday

• Earnings from McDonald’s, ON Semiconductors, and Loews

Tuesday

• Earnings from Coca-Cola, Shopify, Gilead Sciences, Marriott, DoorDash, Carlyle, Zillow, Super Micro, and Lyft

• January NFIB Small Business Optimism Index

Wednesday

• Earnings from Cisco, Applovin, CVS, Robinhood, HubSpot, Reddit, Kraft Heinz, Barrick Gold, Restaurant Brands, MGM Resorts, Dutch Bros, and Wyndham

• January Consumer Price Inflation (est. 0.3% MoM, 2.8% YoY)

• January Core CPI (est. 0.3% MoM, 3.1% YoY)

• January U.S. Federal Budget (est. -$93B)

Thursday

• Earnings from Applied Materials, Unilever, Sony, Deere, Palo Alto Networks, Brookfield, Duke Energy, Airbnb, Coinbase, Datadog, PG&E, GoDaddy, Twilio, DraftKings, SharkNinja, Hyatt, Roku, Molson Coors, and Wynn

• January Producer Price Inflation (est. 0.3% MoM)

Friday

• Earnings from Honda and Moderna

• January Retail Sales (est. 0.0% MoM)

That’s a wrap! See you next Monday with all the market insights and money tips you need to stay ahead.

Keep stacking,
The Money Maniac 💸

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DISCLAIMER: The information provided in this newsletter is for informational purposes only and should not be construed as financial advice or a solicitation to buy or sell any assets. All opinions expressed are those of the author and are subject to change without notice. Please do your own research or consult with a licensed professional before making any investment decisions.

**M1 High-Yield Cash Account(s) is an investment product offered by M1 Finance, LLC, an SEC registered broker-dealer, Member FINRA / SIPC. M1 is not a bank and M1 High-Yield Cash Accounts are not a checking or savings account. The purpose of this account is earn interest on securities not actively invested. An open M1 Investment account is required to participate in the M1 High-Yield Cash Account. All investing involves risk, including the risk of losing the money you invest.

Stated APY (annual percentage yield) with the M1 High-Yield Cash Account is accrued on account balance. Obtaining stated APY requires a minimum initial deposit of $100. APY is solely determined by M1 Finance LLC and its partner banks, and will include administrative and account fees that may reduce earnings. Rates are subject to change without notice. M1 High-Yield Cash Account is a separate offering from, and not linked to, the M1 High Yield Savings Accounts offered by M1 Spend LLC’s banking partner. M1 is not a bank.

The cash balance in your Cash Account is only eligible for FDIC Insurance once it is swept to our partner banks and out of your brokerage account. Until the cash balance is swept to partner banks, the funds are held in a brokerage account and protected by SIPC insurance. Once funds are swept to a partner bank, they are no longer held in your brokerage account and are not protected by SIPC insurance. FDIC insurance is not provided until the funds participating in the sweep program leave your brokerage account and into the sweep program. FDIC insurance is applied at the customer profile level. Customers are responsible for monitoring their total assets at each of the sweep program banks. A complete list of participating program banks can be found here.

The opinions expressed are solely those of the authors and do not reflect the views of M1. They are for informational purposes only and are not a recommendation of an investment strategy or to buy or sell any security in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. Prior to making any investment decision, you are encouraged to consult your personal investment, legal, and tax advisors.