Welcome to the Weekly Scan. Here’s what we’re following for the week of February 22, 2021.

Congress hits play on GameStop. Last week, the House of Representatives Financial Services Committee held a hearing on the January, 2021 short squeeze of GameStop, AMC, and other “memestocks.” The committee questioned the CEOs of companies involved in the squeeze, including the trading app Robinhood, hedge funds Citadel and Melvin Capital, and online forum Reddit, as well as Ketih Gill, a day trader known as “RoaringKitty,” who led much of the fervor around Gamestop buying on Reddit. The hearing focused heavily on Robinhood’s decision to halt trading of GameStop shares after the share price increased to $325, from $35 a week earlier. The Committee also questioned the executives on payment for order flow, the process by which high-frequency traders, such as Citadel, may route orders from brokerages at prices favorable to them. 

  • The takeaway: Representatives pressed the companies on whether or not they encourage new and inexperienced investors to take on unnecessary risk when investing by “gamifying” investing. The hearing also centered around whether the companies prioritized their own interests over those of retail investors, and to what degree, if any, stock buying of so-called YOLO stocks may have been manipulated.

Business Insider and CNBC

When Texas freezes over. Power outages and frigid temperatures in Texas caused a record drop in U.S. oil production last week, as more than 4 million barrels a day, or approximately 40% of total U.S. oil production, went offline. The cold temperatures, which also interrupted water supply in the state, prevented Texas refineries from shipping oil globally. As a result, the price of Brent crude reportedly increased to $65 per barrel, the highest price since January, 2020, before the Covid-19 pandemic sent oil prices down. 

  • The takeaway: The slump in production in the U.S. has been positive for other oil producers. Europe and OPEC suppliers in the Middle East have stepped up to fill the supply gap. While temperatures are expected warm soon, oil production in Texas is predicted to take several weeks to fully recover.

Bloomberg

Walmart’s wage increase. Walmart, the largest retailer in the world, announced that it will give 425,000 of its 1.5 million employees a raise to an average of more than $15 per hour. Currently, Walmart workers earn an average $14 per hour. The pay increases, which will range from $13 to $19 per hour, will mostly go to employees working in the digital and stocking divisions. Walmart’s competitors, including Amazon and Target, announced a new minimum wage of $15 for most employees.

  • The takeaway: Walmart’s decision comes as workers and some legislators advocate for increases to the federal minimum wage, which has not increased since 2009. The Biden administration is pushing to include a gradual increase of the federal minimum wage as part of the $1.9 trillion stimulus package that Congress is currently finalizing. The administration hopes to increase the minimum wage to $15 per hour from $7.25, where it currently stands, by 2025. While Biden’s plan would increase wages for 17 million people, the Congressional Budget Office estimates that it will also cost the U.S. 1.4 million jobs.

The Street

Find out what we covered in last week’s Scan.

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