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Russia tests its new nuclear intercontinental ballistic missile



Russian President Vladimir Putin speaks during a meeting with supporters at his campaign headquarters in Moscow, Russia March 18, 2018.

Yuri Kadobnov | POOL | Reuters

Russian President Vladimir Putin speaks during a meeting with supporters at his campaign headquarters in Moscow, Russia March 18, 2018.

Russia tested its new intercontinental ballistic missile (ICBM) for the second time on Friday, the country’s defense ministry said in a tweet.

The nuclear weapon called Sarmat will replace the current Soviet-era missile called Veovoda.

Russia’s ministry of defense tweeted a video showing the ICBM taking off.

It’s the second test of Sarmat. The first took place towards the end of last year.

The test was carried out at the Plesetsk Cosmodrome, as spaceport in the west of Russia.

Russian President Vladimir Putin unveiled details of the missile in March. At the time, he said that the ICBM “can reach any point in the world.” The ICBM was unveiled as part of a raft of defense measures during his annual State of the Union address earlier this month.

There are worries about the rising tension between some countries when it comes to nuclear weapons. North Korea has also been carrying out tests of its ICBM.

Russia’s missile test comes at a time when it faces backlash from other major nations after Britain blamed the country for the poisoning of Russian former double agent Sergei Skripal. The U.S. and other countries have expelled some Russian diplomats. The Kremlin responded on Thursday by expelling 60 American diplomats from Russia.

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Stock futures slip after Dow, S&P 500 hit fresh records



A Wall Street street sign is displayed in front of the New York Stock Exchange (NYSE) in New York, U.S., on Thursday, Feb. 11, 2021.

Bloomberg | Getty Images

Futures contracts tied to the major U.S. stock indexes slipped at the start of the overnight session Sunday evening, suggesting Wall Street could see mild losses on Monday to curb last week’s strength in U.S. equity markets.

Dow futures lost 30 points around 6 p.m. in New York, while contracts tied to the S&P 500 shed 0.15%. Nasdaq 100 futures fell 0.1%.

The movement in the futures market on Sunday followed yet another record close for the Dow Jones Industrial Average on Friday, when it gained nearly 300 points to end at 33,800.6. The S&P 500 gained 0.8% and hit its third straight record close.

Stocks linked to the recovering economy led many of last week’s gains as vaccinations efforts throughout the U.S. accelerated. Both the Dow and the S&P 500 climbed at least 2% last week. The Nasdaq rallied 3.1% over the same period as some traders snapped up big tech names, with Apple up more than 8% and Amazon and Alphabet each gaining more than 6%.

The first-quarter earnings reporting season gets underway in the week ahead, with expectations set for broadly positive news and an uptrend for U.S. equities thanks to a recovering economy. Many of the nation’s largest banks, including Goldman Sachs and JPMorgan Chase will report results for the three months ended March 31.

The coming week is also packed with Federal Reserve speeches and key economic data including a hotly anticipated inflation reading Tuesday, when the consumer price index is released.

Fed Chairman Jerome Powell begins a week of multiple Fed appearances with a Sunday evening interview on “60 Minutes.” He also speaks Wednesday at an Economic Club of Washington event.

“A positive fiscal shock, strong housing tailwinds, a large stock of savings, and the Fed letting inflation run above 2% mark a fundamentally different economic backdrop,” Evercore ISI equity strategist Dennis DeBusschere wrote in an email. “US data is expected to be strong this week and US vaccinations are increasing. Real rates are still too negative and are headed higher, supporting risk-on factor outperformance.”

Investors will also keep an eye on President Joe Biden’s effort to advance his infrastructure plan known as the American Jobs Plan. Biden, who with other Democrats promised significant an infrastructure overhaul in the 2020 elections, will meet with a bipartisan group of lawmakers on Monday to try to persuade Capitol Hill to back the $2 trillion package.

Congress will return to Washington this week and be in session for the first time since Biden debuted his proposal, which earmarks hundreds of billions of dollars for roads, bridges, airports, broadband, electric vehicles, housing and job training.

The president’s plan would also increase the corporate tax rate to 28% and crack down on other overseas tax avoidance strategies.

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Covid variant from South Africa was able to ‘break through’ Pfizer vaccine in Israeli study



An Israeli health worker of the Maccabi Healthcare Services prepares to administer a dose of the Pfizer-BioNtech vaccine on February 24, 2021 in Tel Aviv.

Jack Guez | AFP | Getty Images

The coronavirus variant first discovered in South Africa is able to evade some of the protection of the PfizerBioNTech vaccine, according to a new Israeli study, which has not yet been peer-reviewed.

Researchers at Tel Aviv University and Clalit, the largest health-care organization in Israel, examined nearly 400 people who had tested positive for Covid-19 after receiving at least one dose of the vaccine. They compared them to the same number of people who were infected and unvaccinated.

The researchers found the prevalence of the variant from South Africa, known as B.1.351, among patients who received two doses of the vaccine was about eight times higher than those who were unvaccinated. The data, published online over the weekend, suggest the B.1.351 is better able to “break through” the protection of the vaccine than the original strain, the researchers wrote in the study.

“Based on patterns in the general population, we would have expected just one case of the South African variant, but we saw eight,” Professor Adi Stern, who headed the research, told The Times of Israel. “We can say it’s less effective, but more research is needed to establish exactly how much.”

CNBC has reached out to Pfizer for comment on the study.

The new data comes as public health officials grow concerned that highly contagious variants, which studies have shown can reduce the effectiveness of vaccines, could stall the world’s progress on the pandemic.

Last month, CDC Director Dr. Rochelle Walensky issued a dire warning, telling reporters that she worried the United States is facing “impending doom” as variants spread and daily Covid-19 cases begin to rebound once again, threatening to send more people to the hospital.

“I’m going to pause here, I’m going to lose the script, and I’m going to reflect on the recurring feeling I have of impending doom,” she said March 29. “We have so much to look forward to, so much promise and potential of where we are and so much reason for hope, but right now I’m scared.”

Israel launched its national vaccination campaign in December prioritizing people 60 and older, health-care workers, and people with comorbid conditions. By February, it was leading the world in vaccinations, inoculating millions of its citizens against the virus.

In January, Pfizer and the Israeli Ministry of Health entered into a collaboration agreement to monitor the real-world impact of its vaccine.

The researchers noted the main caveat of the study was the same sample size. B.1.351 only made up about 1% of all Covid-19 cases, they said. B.1.1.7, the variant first identified in the U.K., is more prevalent.

As variants spread, drugmakers said they are testing whether a third dose would offer more protection.

In February, Pfizer and BioNTech said they were testing a third dose of their Covid-19 vaccine to better understand the immune response against new variants of the virus.

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Earnings should boost hot bank trades: RBC’s Gerard Cassidy



One of the year’s hottest trades may get a boost from earnings season.

RBC Capital Markets’ Gerard Cassidy expects financials to exceed Wall Street expectations when they start reporting this week.

“The big beats are likely to come from the loan loss reserve releasing numbers,” the firm’s head of U.S. bank equity strategy told CNBC’s “Trading Nation” on Friday. “Last year because of the pandemic, the banking industry set aside billions of dollars in anticipated credit losses, and the reserves for these losses weren’t used.”

Financials were the third worst performing S&P 500 group in 2020, behind energy and real estate. So far this year, Financial Select Sector SPDR Fund, which tracks the group, is up more than 19%.

According to Cassidy, that’s about to change. He believes the banking sector will be among the best performers this year due to the unprecedented economic recovery.

“That was not factored in last year when the banks set aside this money to cover these losses,” he said. “So, we expect in the first quarter that’s going to be the big driver of the earnings beat, partially offset though with slower growth in the net interest income and maybe some net interest margin pressure as well.”

JPMorgan Chase ushers in earnings season on Wednesday — along with Goldman Sachs and Wells Fargo.

Cassidy anticipates Bank of America, which reports quarterly results on Thursday, will be the biggest winner. It’s up 32% so far this year.

He lists strong management, its wide exposure to the U.S. recovery and diverse revenue stream as the chief bullish factors.

“Ninety percent of their business, comes from the United States,” said Cassidy. “With the Federal Reserve forecasting the growth of this country’s economy coming in at 6%, they will be one of the biggest beneficiaries of that growth.”

Cassidy names Credit Suisse as the bank facing the most challenges right now. He cites its massive losses in connection with the Archegos Capital hedge fund implosion.

“There has been a number of management changes over the years in that organization,” Cassidy said. “Because of that possibly the controls and procedures weren’t as solid as they’ve been at some of the domestic U.S. firms.”

Shares of Credit Suisse are off more than 26% since March 1.

Disclosure: RBC Capital Markets has investment banking relationships and/or non-investment banking relationships with JPM, BAC MS, GS, and CS.


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