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Russian Olympics team in shock over Games doping scandal

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A Russian Olympic medallist has left the Pyeongchang Winter Games on suspicion of doping, a team official said on Monday, in a scandal that has shocked his teammates and could imperil Russia’s efforts to regain full Olympic status.

Alexander Krushelnitsky, who competes in curling, one of the Games’ least physically taxing sports, is suspected of testing positive for meldonium, a banned substance that increases blood flow and improves exercise capacity.

Asked for an update on the case, Russian delegation spokesman Konstantin Vybornov told Reuters the athlete had surrendered his Games accreditation and left the Olympic village while awaiting the result of a second sample later on Monday.

He later denied having referred to any individual by name. But Russian women’s curling coach Sergei Belanov replied to reporters’ questions about Krushelnitsky, dismissing the idea that a “young, clever man” would use drugs in a sport where they would produce “no benefits”.

“It’s stupid, but Alexander is not stupid, so I don’t believe it,” Belanov said.

Krushelnitsky won bronze with his wife Anastasia Bryzgalova in mixed-doubles curling in Pyeongchang. He has not responded to a request for comment.

Suspicions of a doping violation have rocked the Russian team, which have been trying to draw a line under years of drug-cheating scandals, and shocked the sport of curling, where steady hands and sharp eyes outweigh physical fitness.

“We were all shocked when we found out yesterday. Of course we very much hope it was some kind of mistake,” Russian curler Viktoria Moiseeva told reporters, adding that the team believed Krushelnitsky was innocent.

“With us it’s not faster, higher, stronger; it’s about being more accurate. I can’t imagine what kind of drugs you could use in curling … so it’s very hard to believe.”

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‘There is no alternative’ — Stocks’ long-running ‘TINA’ advantage could be ending, worrying traders

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The New York Stock Exchange (NYSE) stands in the Financial District in Manhattan on January 28, 2021 in New York City.

Spencer Platt | Getty Images

Will March be the death of the “TINA” trade?

February started with the reflation trade, and ended with a bond market rout that scrambled stock valuations and caused some to wonder whether this is the end to the fabled “there is no alternative” to stocks notion.

“There is no alternative to stocks,” (TINA) has become a mantra of bulls, arguing that yields have been so low that bonds were hardly worth owning as an asset class. 

The reflation trade:  Will it last?

With the S&P 500 up 2% in February, the sector outperformers are all associated with the reflation trade —sectors that benefit from the reopening of the U.S. and global economy.

Reflation trade in February

  • Energy up 24%
  • Banks up 19%
  • Industrials up 8%
  • Materials up 5%

At the same time, defensive sectors that are not considered cyclical in nature have lagged the markets.

Defensive sectors in February

  • Consumer Staples were flat
  • Health Care down 2%
  • Utilities down 5%

The end of TINA?

The narrative behind the reflation trade is still intact:  the vaccination pace is accelerating, the reopening of the U.S. economy is gaining steam, “go big” stimulus is coming, and 2021 earnings estimates have started rising.

But there is a new cloud on the horizon: higher bond yields are putting a lid on high-valuation stocks.

The TINA trade may now be changing, Savita Subramanian at Bank of America says:  “Income investors that were forced into equities for scarce yield may be more likely to move back to traditional fixed income assets and history suggests 1.75% (house forecast) on the 10-yr is the tipping point at which asset allocators begin to shift back into bonds.”

Which stocks get hurt when rates rise?

Not surprisingly, Subramanian says the sector that does best when rates start rising are financials. The sectors that tend to do worse are defensive: consumer staples, health care, utilities, and real estate.

That is exactly how the market is reacting. As rates rose in February, banks gained, and defensive stocks declined.

Another group that has been getting hurt on rising rates is technology stocks, and with good reason, Subramanian notes: “Ultra-low rates have ballooned valuations for secular growth stocks since the financial crisis,” she says. 

Not surprisingly, megacap tech stocks began moving down as soon as rates started rising.

Megacap tech in February

  • Apple down 8%
  • Xilinx down 4%
  • AMD down 4%
  • Facebook down 4%
  • Microsoft down 1%

The three factors that drive stock prices

The Federal Reserve has been furiously pumping money into the economy, and much of that money has found its way into the stock market and has been a major factor in why equities have done so well in the last year.

While “liquidity” (how much money is available to buy and sell stocks) is an important factor, stocks have traditionally risen on some combination of: 

  1. An increase in dividends;
  2. An increase in earnings; or
  3. An expansion of the P/E multiple. 

Vanguard founder Jack Bogle used to call dividends and earnings the “fundamental” part of stock investing, while calling stock rises based on expanding P/E ratios the “speculative” part of the market, that is, it represented investors betting on whether earnings might be rising in the future.

Much of the recent expansion in stock prices has been driven by an expansion of the P/E multiple, which now sits at roughly 22 times 2021 earnings. 

Big-cap technology stocks in particular saw dramatic rises in P/E multiples in 2020.  Chip maker Xilinx, for example, went from 25 to 50 times forward earnings.  NVIDIA went from 30 to 60.  Even old-school big cap tech stocks saw big moves up in their P/E levels last year with Microsoft going from 25 to 35, and Apple leaping from 20 to 35.

These multiples have dropped as interest rates have risen in 2021.

The bad news is that even if bond yields don’t move higher, the current move up appears to be putting a ceiling on valuations. 

If rates keep moving up, can stocks still go higher?

If higher rates are indeed putting a ceiling on stock multiples, than investors will have to rely on dividend increases and genuinely rising earnings (not just expectations) to propel prices forward.

Fortunately, there is good evidence this is happening. Analysts have consistently underestimated the strength of the economic recovery. Earnings estimates for the S&P 500 for the first quarter of 2021 have risen from 16.0% to 21.6% from January 1st to February 26th and second quarter earnings estimates have also risen, from 45.7 to 50.9% in the same period.

With rates unsettled, expect a volatile March

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Bitcoin (BTC) is at a ‘tipping point,’ Citi says

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A customer uses a bitcoin automated teller machine (ATM) in a kiosk Barcelona, Spain, on Tuesday, Feb. 23, 2021.

Angel Garcia | Bloomberg | Getty Images

Citi thinks bitcoin is at a “tipping point” and could one day “become the currency of choice for international trade” as firms like Tesla and PayPal warm to it and central banks explore issuing their own digital currencies.

“There are a host of risks and obstacles that stand in the way of Bitcoin progress,” the U.S. investment bank’s global perspectives and solutions team wrote in a note Monday.

“Bitcoin’s future is thus still uncertain, but developments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion.”

It marks a change in tone for major financial institutions on bitcoin. Many banks have historically shunned the digital asset, arguing it has no intrinsic value and the hype surrounding it is akin to the tulip mania of the 17th century.

But bitcoin’s wild ascent over the last few months has forced big Wall Street players to reevaluate the cryptocurrency. BNY Mellon, the oldest bank in the U.S., last month said it would offer custody services for bitcoin and other digital currencies. Meanwhile, JPMorgan has said it’s looking seriously as bitcoin.

Bitcoin and other cryptocurrencies are often subject to wild bouts of volatility. Just over a week after hitting an all-time high of more than $58,000, bitcoin’s price has shed more than $10,000. It’s still up over 60% on the year and 460% in the last 12 months.

Crypto investors say bitcoin’s latest bull run is unlike previous cycles — including in 2017, when it rose close to $20,000 before plummeting 80% the following year — as it has been driven by increased participation from institutional investors.

Initially created as a digital payments system for bypassing banks and other financial middlemen, bitcoin has since gained traction among mainstream investors as a kind of “digital gold” that can act as a hedge against rising inflation.

There are several hurdles that bitcoin would have to overcome before becoming a mainstream payment tool, according to Citi.

“Upgrades in the way the marketplace works would be required before broad institutional participation could be envisioned,” Citi said. “Such enhancements would move Bitcoin and the cryptocurrency space closer to the oversight and rules of traditional financial regulators.”

The bank added: “This in turn may cause many of the most innovative developers and entrepreneurs to exit the ecosystem, as it moves away from the anti-establishment ethos of Bitcoin’s roots. Finally, the macro investing environment may shift and make the need for a new asset with Bitcoin’s profile less pressing.”

Last month, analysts at JPMorgan called bitcoin an “economic side show” and said crypto assets ranked as the “poorest hedge” against significant drops in stock prices. The rise of digital finance and demand for fintech alternatives is the “real transformation story of the Covid-19 era,” they added.

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4 work-from-home hacks that are still vital a year into lockdown

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Roy James Shakespeare | Getty

Even after almost a year spent working from home due to the coronavirus pandemic, there are still common problems many are seeking solutions to in order to help us stay productive. 

It is nearly a year since a raft of countries imposed public health restrictions, forcing the vast majority of people to work from home. 

And while the benefits of this have been clear, in terms of the increased flexibility it allows both employers and employees, the adjustment to working remotely has also come with a number of day-to-day challenges. 

Many have been working longer hours, with no clear cut off time to end the day. People are also taking fewer breaks, which research suggests could be partly because we haven’t been able to break up the day by chatting to co-workers. 

Difficulties staying focused and motivated with both work and exercise, which tie into our level of productivity, have also been challenging. 

However, there are some easy hacks to help. 

Poor posture

A study published by private health care specialist Bupa in May found over two-thirds of the 2,000 U.K. remote workers surveyed complained of aches and injuries. Just a third said they had dedicated workspace in their home. 

And even with an actual office chair and desk set-up at home, it’s hard to remember to maintain good posture throughout the working day, while slumped over a laptop. 

Luckily, this Instagram user had the perfect posture hack, using a resistance band to keep shoulders straight. 

Procrastination 

The existence of instant messaging platforms like Slack and the fact that deadlines still exist while working from home mean the ability and need to regularly check-in with co-workers and this should keep us completely focused, right? Not necessarily. 

Increased feelings of stress and burnout amid the pandemic affect our productivity and can lead to procrastination. 

Katie Bridget O’Brien, who is a freelance coach for people in creative roles, told CNBC via email that when she speaks to clients about what they feel when procrastination sets in, it’s typically feelings of guilt or uneasiness. 

One suggestion she has to tackle these feelings is to share an action you plan to take with another person: “Accountability makes it so much easier to get on task.” 

And while it may seem “counterintuitive when you are against the clock,” taking a break from screens for a few minutes can help sustain energy, she said. 

Finding ‘dead’ time

Not having to commute to the office over the last year gave many workers a couple more hours back a day, in theory, but also took away that time used while traveling to catch up on reading or reply to emails. 

Many probably envisioned using that time instead to either get a head start on other chores or squeeze in some exercise before work. 

However, the stress of the pandemic has disrupted our sleep, perhaps meaning that time might simply now be being used for some extra well-needed rest. And even for those that have managed to stick to getting up at the same time as before, some may be using it start work earlier or for additional childcare responsibilities, for example. 

Grace Marshall, a productivity coach at Think Productive, told CNBC via video call that we used to consider the commute as “dead” time to be used for extra tasks like admin but now we need to think more intentionally about fitting those chores in. 

“It’s just deciding where it can fit in, rather than waiting for that lull,” she said. 

Marshall suggested sticking post-it notes nearby with clear reminders about admin tasks and tackling them when tired, like after lunch or winding down at the end of the day. Having these visual reminders nearby also avoids “decision fatigue” when the brain is too tired to remember or decide what needs to be done.   

This can also help as a reminder for breaks, she said, in terms of carving out time to do “life admin.” Marshall said that so often we can revert to the “junk food” version of breaks, using that time to scroll social media for example, when that time can actually be used for some “quick wins” on our wider to-do list. 

Getting outside for exercise 

Spending all day in the comfort of your home while working can make it harder to find the motivation to get outside, particularly in the winter months. Research has shown how exercising outdoors, compared to inside, can make people feel more energized. 

British marathon champion and coach Charlotte Purdue told CNBC that she likes to warm up inside by skipping first before heading out, and rewards herself with a latte afterward. 

Working out at lunchtime and organizing virtual group sessions, is another way to keep up that motivation in winter, as previously suggested by Olympic gold-medal swimmer Adrian Moorhouse.

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