💰 5 Fact Friday: Witching Hour Is Upon Us

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MARKETS
1. Everyone’s Bearish (And That’s Bullish) 🔄

After weeks of selling pressure, fund managers are waving the white flag—and that might actually be a good sign.

Bank of America’s latest Fund Manager Survey calls the market’s recent correction a “bull crash.” The idea? When sentiment craters this fast, it’s usually a contrarian indicator.

In other words: when everyone’s bearish, the market tends to bounce.

And if you haven’t looked at your portfolio lately, bearish vibes are everywhere…

• Consumer sentiment just hit a 2-year low

• Gold is breaking all-time highs as investors seek safety

• The CNN Fear & Greed Index is buried in “extreme fear”

• The AAII Sentiment Survey shows more bears than bulls

But the biggest shift? Just a month ago, a net 17% of fund managers were overweight U.S. stocks—meaning they were betting on America to outperform.

Now? That’s flipped to -23%. It’s the largest one-month swing ever.

So what’s happening here?

When sentiment falls off a cliff, fund managers tend to dump risk—and that helps explain the recent market dip.

But here’s the twist: Bank of America says the “sell signal” that kicked off in December has already ended. Managers are now sitting on piles of cash.

At some point, that money needs a new home.

Just don’t expect it to sprint back into the Magnificent Seven. Allocations there are fading fast, while fund managers are suddenly warming up to China.

Bottom line: Markets may be shaky, but this could be one of those too-bearish-to-stay-bearish moments. Time will tell.

ECONOMY
2. Fed Signals A Slowdown, Not A Meltdown 🛑

Despite growing recession fears and sinking consumer sentiment, the Fed isn’t hitting the panic button.

Powell & Co. kept interest rates steady and made one thing clear: while people may feel worse about the economy, the data—job growth, spending, and GDP—isn’t flashing the same warning signs (yet).

One under-the-radar move? The Fed is slowing its balance sheet runoff.

Lately, it’s been letting $25 billion in Treasury bonds mature each month without reinvesting—quietly draining cash from the system. But now, that cap is dropping to just $5 billion.

Translation: $20 billion more will stay in circulation every month.

The result? A bit less tightening, slightly lower borrowing costs, and a little more breathing room for markets.

Powell also downplayed tariff concerns, calling their inflation impact ‘transitory’—meaning the Fed won’t overreact with rate hikes just because import prices rise temporarily. That reassurance helped ease trade war fears.

Even with all the noise, the Fed’s outlook suggests a slowing, not collapsing, economy.

📉 Lower Growth: 2025 GDP projections were trimmed from 2.1% to 1.7%.
🔥 Higher Inflation: PCE inflation expectations ticked up from 2.5% to 2.7%, and core PCE rose from 2.5% to 2.8%.
📊 Rate Cut Outlook: The Fed’s dot plot still signals two cuts in 2025.

That steady hand was exactly what investors wanted to see.

As soon as the Fed’s press conference began, stocks rallied into the close. While Trump may be the market’s main man, Powell’s words still pack a punch.

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MARKETS
3. Triple Witching Day Is Here 🧙‍♂️

Nope, it’s not Halloween—but today is the first triple witching day of 2025, and it’s about to stir the markets.

What is this “witching”, exactly?

Triple witching happens four times a year—on the third Friday of March, June, September, and December—when three types of derivatives expire at once:

1. Stock options

2. Index options

3. Index futures

If that sounds like a Wall Street tongue twister, don’t sweat it.

The takeaway is simple: a whole lot of bets on individual stocks and the broader market are all settling at the same time. When those contracts expire, traders need to close or adjust their positions—leading to a big spike in volume.

In fact, the last triple witching (Dec. 20, 2024) was the highest-volume day for the S&P 500 all year.

The name “witching” hints at strange market forces, but it’s not supernatural. It’s just supply, demand, and a dash of organized chaos.

Most of the action happens in the final hour of trading—aka the “witching hour”—as portfolio managers rebalance to align with major indexes.

Bottom line: If today feels volatile, don’t be spooked. It’s probably just traders repositioning, not the start of a market meltdown. The weirdness usually clears up by Monday.

STOCKS
4. M&A Of The Week 🔥

It’s been a busy week in the world of dealmaking—spanning basketball courts, soda shelves, and cybersecurity servers. Here are the biggest merger and acquisition headlines you need to know:

🏀 Boston Celtics Sold for $6.1B

Who: A group led by private equity exec Bill Chisholm and Sixth Street

What: Bought the NBA champs from the Grousbeck family

Why: Private equity (PE) sees sports as a hot new asset class, thanks to exploding media rights—like the NBA’s $76B deal.

Trend: At nearly 17x its 2002 sale price, this marks the richest franchise sale ever across all U.S. sports. Family-owned teams are quickly becoming a PE playground.

🥤 Pepsi Buys Poppi for $1.95B

Who: PepsiCo just chugged down trendy soda brand Poppi

What: The fizzy prebiotic darling is now backed by the beverage behemoth

Why: Soda is out, and “gut health” is in. Pepsi wants a slice of the growing functional beverage boom.

Trend: Poppi’s $100M+ in revenue shows health sells. But the sky-high sales multiple means Pepsi’s betting big on good gut feelings.

🛡️ Google Buys Wiz for $32B

Who: Google is scooping up cybersecurity startup Wiz

What: The biggest deal in Google’s history—and a big statement in the cloud wars

Why: Google Cloud is still playing catch-up to AWS and Microsoft. Wiz’s agentless security platform is fast, clean, and already used by nearly half the Fortune 100.

Trend: Tech giants are going all-in on cloud security as AI expands attack surfaces. Expect valuations to keep climbing—fast.

Spicy Detail: Wiz hit $350M in annual revenue within 4 years. Google paid nearly 100x that… and agreed to a $3.2B breakup fee if the deal falls apart. 😳

STOCKS
5. Guess That Stock 🕵️‍♂️

This Virginia-based consulting giant thrives on federal contracts—but budget cuts could change everything. Can you name the stock?

1. The company provides cybersecurity, defense tech, and IT consulting across nearly every U.S. agency—from the VA to the FBI to the Pentagon.

2. Despite double-digit revenue growth in Q4, the stock has fallen 40% since election day as investors worry about future government spending.

3. 98% of its revenue comes from U.S. government contracts, making it one of the most exposed firms to Washington’s budget changes.

4. The Trump administration already canceled $580 million in defense contracts, including deals with rival McKinsey, sparking fears that this firm could be hit next.

5. Its name sounds like a law firm—three last names strung together.

Got a guess? Tap here to reveal the answer → 

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