| Good morning. More than 70% of the continental US was covered in snow yesterday, according to the National Weather Service. The only states without snow cover: Florida, South Carolina, and Georgia. And we assume Hawaii, too, but you just never know these days. | | | |  | NASDAQ | 13,880.23 | - 0.61% | | | | S&P | 3,916.99 | - 0.36% | | | | DOW | 31,516.43 | - 0.31% | |  | GOLD | 1,773.70 | + 0.05% | | | | 10-YR | 1.289% | + 1.50 bps | | | | OIL | 60.47 | - 1.10% | | | *As of market close. Here's what these numbers mean. | - Economy: Jobless claims rose to 861,000, their highest level in four weeks. This number has remained stubbornly high for nearly a year.
- Markets: If you've been keeping track of the 10-year yields in the Markets graphic, you've probably noticed that they've been going up a lot recently. Some analysts are worried that higher yields (which make bonds more attractive to investors) could threaten the party in stock prices.
- Crypto: The first bitcoin exchange-traded fund in North America had an über-successful launch yesterday in Toronto.
| |  US House of Representatives screenshot | Billionaires, tech executives, and a YouTuber walk into a government hearing. The punchline is less funny than you'd hope. Yesterday's virtual hearing, called by the House Financial Services Committee to better understand the astonishing surge in GameStop shares a few weeks ago, resembled a 9–3 football game in the rain—lots of defense and not particularly fun to watch. Still, it was perhaps the most high-profile discussion of an important development we've been charting for years: the growing influence of individual investors and social media in the stock market. And there were some interesting takeaways. Tenev takes the heat: Many questions from lawmakers were directed at Vlad Tenev, CEO of Robinhood. The company limited trading of certain stocks and has been criticized for "gamifying" investing at the expense of the inexperienced investor. - Tenev apologized for the pause in trading but otherwise defended his firm's business model, which includes the controversial practice of "payment for order flow" (PFOF).
- Tenev and Ken Griffin, the billionaire founder of Citadel, both said that PFOF allows for innovation in the industry, such as the no-commission trades pioneered by Robinhood.
Roaring Kitty still loves GameStop: In his opening statement, Keith "Roaring Kitty" Gill, the trader who is credited with sparking major interest in the retailer, said, "In short, I like the stock." - When asked about new regulations to protect individual investors, Gill said he didn't think any new rules were needed, just "increased transparency."
- He also delivered the best line of the event (in our opinion) when he declared, "I am not a cat," in reference to the viral video.
Best of the rest: - Reddit's CEO said investment advice on the platform is "probably among the best."
- Lawmakers argued among themselves whether the hearing was "political theater" or "serious oversight."
- Griffin denied conspiracy theories that Citadel and Robinhood colluded to limit trading in GameStop.
Bottom line: Hedge fund manager Gabe Plotkin summed up the entire episode best when he said that his industry will have to adapt to the rise of the retail investor. + Further reading (and listening): - Get to know the five key witnesses at the hearing.
- Two Business Casual podcast episodes about GameStop. The guests are: 1) Jannick Malling, cofounder and co-CEO of investing social network Public and 2) Neal Freyman, who edits this newsletter every day and has been told he has a "podcast voice."
| |  Giphy | As the US copes with winter weather, another storm is brewing 10,000 miles away over how to divide revenue among news publishers and Big Tech. A proposed law is winding through Australia's Parliament that would require social platforms like Facebook and Google to make revenue-sharing agreements with publishers. Both platforms are against the law—but made opposite tactical moves this week. - Google threw proponents a bone, striking agreements with Australian publishers, while Facebook threw a stick, blocking news sharing on its services in Australia.
- Their argument: Forcing platforms to pay for news would threaten the open internet. Tim Berners-Lee, the inventor of the World Wide Web, said the law would indeed compromise his invention.
Publishers' POV: Over the course of the digital revolution, platforms have eaten publishers' lunch, and dinner, and post-dinner snack. Google accounts for 53% of online advertising revenue in Australia, while Facebook eats up another 23%, per the country's treasurer. Zoom out: However things shake out in Australia, the idea of making platforms share $$$ with publishers is gaining traction elsewhere, including the EU and the UK. | |  Francis Scialabba | Three major retailers announced changes on the labor front yesterday. Walmart is raising wages for 425,000 store associates following a successful holiday season. Depending on location, wages will bump up to $13–$19/hour. - With the increase, almost half of Walmart's US employees will earn $15/hour or more. But Walmart's $11/hour starting wage won't budge for now, even though competitors including Amazon, Target, and Costco have increased theirs to $15.
Kroger is closing some Seattle stores due to a new ordinance requiring $4/hour hazard pay for frontline grocery workers. Kroger had "hero pay" when the pandemic began, then switched to one-time bonuses of up to $400. - Kroger is also closing two stores in California, where a handful of cities have passed similar measures. California's grocer association is fighting the rules.
McDonald's is linking executive VP bonuses to diversity targets. The fast food chain wants to improve representation in senior leadership to 45% women and 35% minorities by 2025. | |  | These days, there's a lot of hype around day trading. But sometimes, identifying and committing to a good old fashioned long-term strategy is one of the best ways to build wealth. So says M1, the Finance Super App that was built with your financial well-being top of noggin. M1 doesn't believe that riding the bucking bronco of speculating and day trading is a viable path to building long-term wealth, so they built a hassle-free, distraction-free, and management fee-free app to easily invest, borrow, and spend. All you have to do is settle on a strategy, automate it, and then go on livin' your life while M1 takes care of the day-to-day. Whaddaya say compadre? Get $30 when you sign up and fund your account with $1,000 today. | |  Ryan Duffy's drone shot of Austin, TX | Running back our new section with one quote, one stat, and one read. Quote: "Seconds and minutes"—Texas officials said the state was this close to an uncontrolled blackout, a worst-case scenario where households could have lost power for months. Early on Monday morning, grid operators made the decision to intentionally cut power to prevent the system from being completely overwhelmed. Stat: Tanger Outlets said traffic was about 90% of last year's levels in Q4. And in January, traffic at its US shopping centers was more than 99% of last year's levels  . Read: The NHL has a huge problem—its goalies are too big. (The Atlantic) | |  NASA | At around 4pm ET yesterday, NASA's most sophisticated rover yet, Perseverance, landed on Mars. It will spend at least one Mars year—687 Earth days—searching for signs of ancient life on the red planet. It has a friend waiting: NASA's Curiosity rover, which landed on Mars in 2012. Perseverance will have to explain GameStop, Clubhouse, and Matthew McConnaghey's career turnaround. | |  | The feeling of getting a 5/5 on the Brew's Weekly News Quiz has been compared to waking up refreshed from an afternoon nap. It's that satisfying. Ace the quiz. | | - Vaccine supply in the US is expected to double in the coming weeks and months, according to Bloomberg.
- The average US life expectancy dropped by one year in the first half of 2020.
- JetBlue and American started jointly selling flight tickets yesterday; their partnership, first announced in July, is still being investigated by the DOJ and state attorneys general.
- Twitter is fighting with the Indian government over free speech and blocked accounts.
- Second City, Chicago's famous comedy theater, was sold to private equity group ZMC.
| |  | Time for a tax break and a relaxing stroll. Yep, you can do both at once with "A Walk in the Park," our brand spanking new project with H&R Block that proves doing your taxes can be as relaxing as waltzing through the woods on a nice day. Learn about all the many ways in which H&R Block makes doing your taxes easy right here. | | | Last Friday, we unleashed the most epic Friday Puzzle in the history of Fridays—and puzzles. We asked readers to fill out an 8x8 grid with company names, such that the companies' market values, when added together, were the greatest possible combination. Our winner: Drew Howerton with a market cap of $9.762 trillion. That LGAM square is clever.  We won't leave you without a puzzle to do today. What same three letters fit into the following blanks in the same order to form five words? 1. E _ _ _ P
2. _ _ _ C K
3. S _ _ _ S H
4. L I _ _ _ D
5. T E _ _ _ L A | | | When you share the Brew, you earn rewards. From Brew swag like t-shirts and coffee mugs to exclusive content, we've got something for everyone in our premier rewards program.  Hit the button below to start sharing the Brew. Click to ShareOr copy & paste your referral link to others:
morningbrew.com/daily/r/?kid=8386977e | | | The three letters are QUI. 1. Equip
2. Quick
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4. Liquid
5. Tequila | | |
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