The Global X Research Team is pleased to announce the release of its Monthly Covered Call Report, featuring the premium and distribution values attained by its roster of covered call funds in January of 2025. The key takeaways below, as well as those highlighted within the report, recap some of the most pivotal undertakings to have taken place across the markets during the January roll period. They outline their influence over the option pricing environment and help substantiate changing investor sentiments as characterized by specific market indicators.

Covered Call Report – January 2025 Key Takeaways

• The malaise that settled in across the investment community in late December, following a meeting of the Federal Open Market Committee (FOMC) at which Chairperson Jerome Powell outlined the possibility for a slower path of interest rate cuts in the year ahead, remained evident in the first half of the January roll period (Dec 20, 2024 – Jan 17, 2025) for the Global X Covered Call suite. In conjunction with some potential year-end profit taking, and elevated concerns surrounding inflation and interest rate volatility, it contributed to intermittent bouts of equity market volatility and ultimately saw the S&P 500 and Nasdaq 100 record total returns of 1.19% and 0.75% during the roll period, respectively.¹
• Although the tech-led selloff that kicked off the January roll period dug stocks an initial hole, economic data points including a better-than-expected Nonfarm Payrolls report released on January 10th, featuring the addition of 256k jobs within the U.S., compared to an estimated 155k, helped sentiment improve early in the New Year.² The report, which helped outline the health of the domestic labor market, was accompanied by the release of an in-line December Consumer Price Index reading of 2.9%, which declined 20 bps, year over year.³ This helped illustrate that price inflation was not yet heating back up and likely influenced investors to bid the S&P 500 back up 2.9% over the last five days of the roll period.⁴
• Notwithstanding the documented changes to tariff, taxation, and immigration policies in the crosshairs of the new political regime within the United States, expectations surrounding healthy consumer spending have led some asset managers to scale back estimates for inflation curtailment in the year ahead.⁵ With investors keeping a close eye on the path of interest rates, this may promote trepidation and a flatter growth trajectory for the major domestic indices. What’s more, geopolitical concerns remain a factor, and the possibility that China’s recent stimulus packages reignite growth on that part of the globe has the potential to spur price inflation, as well.