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    Gen X stands to gain the most wealth from the $84 trillion wealth transfer

    While millennials and members of Generation Z are expecting the biggest inheritances in the coming years as baby boomers pass down their fortunes, Gen Xers will likely get the largest windfalls in the near term.
    According to Wealth-X, the average age of individuals in North America set to inherit fortunes from parents worth $5 million or more is 46.1 years old.
    The findings cast a spotlight on the large wealth potential for Generation X, which has been largely overlooked in the discussion of young inheritors.

    Fg Trade | E+ | Getty Images

    Generation X may be the biggest beneficiary from the $84 trillion Great Wealth Transfer in the next 10 years, according to a new study.
    While millennials and members of Generation Z are expecting the biggest inheritances in the coming years as baby boomers pass down their fortunes, Gen Xers will likely get the largest windfalls in the near term. According to Wealth-X, the average age of individuals in North America set to inherit fortunes from parents worth $5 million or more is 46.1 years old.

    The average age of children expected to receive the most substantial inheritances — from parents worth $30 million or more — is 47.6, according to the study. The study defines members of Gen X as being between the ages of 44 and 59 today, and millennials as between the ages of 28 and 43.

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    The findings cast a spotlight on the large wealth potential for Generation X, which has been largely overlooked in the discussion of young inheritors. Wealth management firms and private banks have largely been focused on potential clients in their 20s and 30s as they wait for trillions to be passed down by families. More than half of millennials are expecting an inheritance of at least $350,000, according to Alliant Credit Union.
    The Wealth-X report suggests that wealth management firms, luxury companies and real estate firms targeting the next generation of wealthy clients should also start considering Generation X.
    “Much is often made in the media of millennial and Generation Z heirs but, in fact, Generation X will be first in line to inherit from their wealthy parent(s),” according to the report.
    The report said that for now, millennials and Gen Z “are more likely to receive sums as grandchildren, which will often be less substantial.”

    Inheritances will be extremely concentrated at the top. In the next 10 years, 1.2 million individuals worth $5 million or more will pass down a total of more than $31 trillion in wealth, according to the report. Of that amount, nearly two-thirds, 64%, will be from the ultra-wealthy, defined as those worth $30 million or more. In other words, nearly $20 trillion will be passed down from 155,000 people in that upper echelon of wealth.
    The super-wealthy, or those worth $100 million or more, will account for nearly half the $31 trillion total being handed down. Billionaires will pass down about $5 trillion, according to the report.
    Inheritors will have different values and priorities from previous generations, which wealth managers, luxury firms and philanthropies need to adapt to. The next generation of investors are more tech influenced, more focused on the environment and social justice and more global, according to the report.
    “New technologies, the clean-energy transition and ‘impact investing’ will be a focus of many heirs’ ambitions, which may not necessarily align with a family’s existing business structures or the legacy plans of those transferring their fortunes,” the report said.

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    France’s next prime minister faces a brutal fiscal crunch

    It was a French politician, Valéry Giscard d’Estaing, who coined the term “exorbitant privilege” in the 1960s. He was referring to the benefits received by America as issuer of the world’s reserve currency—namely, the ability to run high deficits comfortably. These days France is reminded that it has no such privilege. Ahead of parliamentary elections on June 30th and July 7th, its hefty deficit and growing debt are central to the campaign. On June 19th the European Commission is expected to put France into an excessive-deficit procedure (EDP), the EU’s fiscal torture chamber, meaning that the country’s politicians will have to come up with a plan to fix things.The commission’s officials have good reason to do so. France has an American-style deficit of 5% of GDP, which its central bank and the IMF expect to come down only slowly. The country’s debt-to-GDP ratio of 111% is similar to Italy’s before the euro crisis in the early 2010s, and is set to rise. S&P Global, a ratings agency, downgraded the French government’s sovereign-debt rating from AA to AA- on May 31st—before Emmanuel Macron, France’s president, gambled on snap elections that may bring the hard-right National Rally (RN) or the left-wing New Popular Front (NPF) to power, under his continuing presidency. More

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    How bad could things get in France?

    It was a French politician, Valéry Giscard d’Estaing, who coined the term “exorbitant privilege” in the 1960s. He was referring to the benefits received by America as issuer of the world’s reserve currency—namely, the ability to run high deficits comfortably. These days France is reminded that it has no such privilege. Ahead of parliamentary elections on June 30th and July 7th, its hefty deficit and growing debt are central to the campaign. On June 19th the European Commission is expected to put France into an excessive-deficit procedure (EDP), the EU’s fiscal torture chamber, meaning that the country’s politicians will have to come up with a plan to fix things.The commission’s officials have good reason to do so. France has an American-style deficit of 5% of GDP, which its central bank and the IMF expect to come down only slowly. The country’s debt-to-GDP ratio of 111% is similar to Italy’s before the euro crisis in the early 2010s, and is set to rise. S&P Global, a ratings agency, downgraded France’s sovereign-debt rating from AA to AA- on May 31st—before Emmanuel Macron, France’s president, gambled on snap elections that may bring the hard-right National Rally (RN) or the left-wing New Popular Front (NPF) to power, under his continuing presidency. More

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    Boeing CEO heads for Senate grilling as new whistleblower alleges company hid bad airplane parts

    Boeing CEO Dave Calhoun faces a Senate panel over ballooning safety and quality control crises with the plane-maker.
    Boeing is under fire after a door plug blew out of one of its nearly new 737 Max planes in January during a flight.
    The Senate subcommittee released whistleblower claims on Tuesday from Boeing employee Sam Mohawk, alleging the company lost track of parts that were damaged or not up to specification.

    Dave Calhoun, CEO of Boeing, leaves a meeting with Sen. Dan Sullivan, R-Alaska, in Hart Building, on Wednesday, January 24, 2024. Calhoun was meeting with senators about recent safety issues including the grounding of the 737 MAX 9 planes.
    Tom Williams | Cq-roll Call, Inc. | Getty Images

    Boeing CEO Dave Calhoun plans to tell a Senate panel on Tuesday that the company’s culture is “far from perfect” as fresh whistleblower claims surface just hours before the hearing that allege the company mishandled hundreds of defective parts.
    Calhoun, who has said he will step down before the end of the year, faces questions from the Senate Permanent Subcommittee on Investigations as the company works to improve employee training and aircraft quality and to fix its tarnished safety reputation. The company has still not named a replacement for Calhoun, who took over after its previous leader was ousted for his handling of two fatal Boeing crashes.

    “Much has been said about Boeing’s culture. We’ve heard those concerns loud and clear. Our culture is far from perfect, but we are taking action and making progress,” Calhoun plans to tell the subcommittee, according to written testimony ahead of the hearing.
    The subcommittee released whistleblower claims on Tuesday from Sam Mohawk, a quality assurance investigator at Boeing, alleging the company lost track of parts that were damaged or not up to specification and that “those parts are likely being installed on airplanes.” The parts Mohawk flagged were in Boeing’s Renton, Washington, plant, where the company makes its best-selling 737 Max.
    Mohawk said he was retaliated against and that he was told by supervisors to hide evidence from the Federal Aviation Administration, according to a memo shared by the committee on Tuesday. Dozens of important parts were stored outside during an FAA inspection, including 42 rudders as well as winglets and stabilizers, Mohawk alleged in claims with the Occupational Safety and Health Administration, the memo said.
    A Boeing spokeswoman said that the company received the claims Monday night and that staff are reviewing them.
    “We continuously encourage employees to report all concerns as our priority is to ensure the safety grof our airplanes and the flying public,” she said.

    The FAA said it has seen an increase in the number of reports from Boeing staff since the door-plug blowout in January.
    “We thoroughly investigate every report, including allegations uncovered in the Senate’s work,” the agency said Tuesday. The FAA declined to comment on the specifics of the latest allegations.
    Mohawk is not testifying before the Senate subcommittee’s hearing, which starts at 2 p.m. ET.
    The hearing and new whistleblower claims are further complicating matters for Boeing. The company already faces potential U.S. prosecution after the Justice Department said last month that the plane-maker violated a 2021 settlement tied to 737 Max crashes in 2018 and 2019 that claimed 346 lives. That agreement, which protected the company and its executives from facing criminal charges tied to the crashes, would have expired just days after the blowout of the Alaska Airlines door panel in January. The Justice Department has until July 7 to decide whether to prosecute.
    Several victims’ family members are expected to attend Tuesday’s hearing. Relatives of Max crash victims met with Justice Department officials late last month to urge the U.S. to prosecute.
    “Boeing made a promise to overhaul its safety practices and culture. That promise proved empty, and the American people deserve an explanation,” said Sen. Richard Blumenthal, D-Conn., the subcommittee’s chairman, upon announcing the hearing earlier this month.

    The FAA has taken a hard line against Boeing, with FAA Administrator Mike Whitaker saying the regulator will keep inspectors on the ground at the company’s facilities until the agency is satisfied with safety improvements.
    The FAA had already halted Boeing’s ability to increase production of the Max, its bestselling plane. Whitaker last month said it would likely be several months before lifting that restriction.
    Boeing’s aircraft output has suffered from the resulting crisis, forcing big customers such as Southwest Airlines and United Airlines to adjust their growth and hiring plans.
    Boeing’s lower production and deliveries have hurt its cash flow, and the company warned investors last month that it would burn instead of generate cash this year.
    Boeing’s shares are down more than 30% so far this year as of Monday’s close, compared with a nearly 15% gain in the S&P 500.
    The company is trying to stamp out quality flaws on jets and reduce so-called traveled work in which production steps are completed out of order, something it has done to address defects. Last month Boeing pointed to a host of other changes to encourage workers to speak up about problems in its factories after several whistleblowers raised concerns about quality issues and retaliation.
    Separately, Boeing is facing supply chain issues. Spirit AeroSystems, a major supplier for both Boeing and Airbus, said last week that titanium entered the supply chain with falsified documents. The supplier said that despite the falsified documentation, more than 1,000 tests confirmed that the material is “airplane-grade titanium.”
    Boeing has been trying to purchase fuselage supplier Spirit, a deal Calhoun said is “more than likely” to be finalized in the first half of the year. More

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    Warren Buffett buys Occidental shares for 9 straight days, pushes his stake to nearly 29%

    Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska, on May 3, 2024.
    David A. Grogan

    Warren Buffett’s Berkshire Hathaway has scooped up more shares of Occidental Petroleum over each of the past nine trading sessions, driving his gigantic stake in the Houston-based oil and gas producer to almost 29%, according to regulatory filings.
    The Omaha, Nebraska-based conglomerate purchased Occidental shares every trading day from June 5 to Monday, totaling an additional 7.3 million shares with purchase prices slightly under or above $60, filings showed.

    The purchases brought Berkshire’s holding to over 255 million shares, representing a 28.8% stake. Occidental is Berkshire’s sixth-biggest stock holding, and the conglomerate has become Occidental’s biggest institutional investor by far.
    Berkshire also owns $10 billion of Occidental preferred stock and has warrants to buy another 83.9 million common shares for $5 billion, or $59.62 each. The warrants were obtained as part of the company’s 2019 deal that helped finance Occidental’s purchase of Anadarko Petroleum.
    The stock closed at $60.2 Monday, making Buffett’s warrants “in the money.” A full redemption of the preferred equity could lift Berkshire’s ownership of Occidental above 40%.
    Buffett has clarified that he wouldn’t take full control of the oil company, once known for being founded by legendary oilman Armand Hammer. There had been speculation of a takeover after Berkshire received regulatory approval to purchase as much as a 50% stake. 
    ‘Read every word’
    The “Oracle of Omaha” previously said he started buying Occidental after reading a transcript of the oil company’s earnings conference call.

    “I read every word, and said this is exactly what I would be doing,” Buffett told CNBC.
    Occidental CEO Vicki Hollub is “running the company the right way,” he added.
    Occidental also pays a 1.5% dividend yield. The stock is about flat this year after dipping 5% in 2023.
    The legendary investor said he took advantage of the elevated volatility in the market in early 2022 to acquire 14% of the energy firm, worth more than $7 billion, in just two weeks.
    “I find it just incredible. You couldn’t do that with Berkshire. … Overwhelmingly, large companies in America, they became poker chips,” Buffett said in 2022. “Imagine trying to [buy] 14% of the farms in this country; 14% of the apartment houses; 14% of the auto dealerships, or just anything, when already 40% were locked up some other place.”

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    Sen. Warren warns Powell against weakening banking regulations: ‘Do your job’

    Sen. Elizabeth Warren is accusing Fed Chair Jerome Powell of doing the financial industry’s bidding in considering changes to Basel III Endgame regulations.
    In a letter first obtained by CNBC, Warren asked Powell for a response to reports that “you are advocating for slashing in half” the increase in capital required under the proposals.
    Bank CEOs and their lobbying groups have said the increases are unnecessarily aggressive and would force the industry to curtail lending.

    Sen. Elizabeth Warren, D-Mass., speaks during the Senate Armed Services Committee hearing on security in Afghanistan and in the regions of South and Central Asia, in the Dirksen Building in Washington, D.C., on Oct. 26, 2021.
    Tom Williams | CQ-Roll Call, Inc. | Getty Images

    Sen. Elizabeth Warren, D-Mass., is accusing Federal Reserve Chair Jerome Powell of doing the financial industry’s bidding by considering changes to a sweeping set of regulations aimed at boosting the capital cushion that large American banks would be required to hold.
    In a June 17 letter first obtained by CNBC, Warren asked Powell for a response to reports that “you are advocating for slashing in half” the increase in capital required under the proposals, known as the Basel III Endgame.

    “I am disappointed by press reports indicating that you are personally intervening—after numerous meetings with big bank CEOs—to delay and water down the Basel III capital rules,” said Warren.
    Last year, three U.S. banking regulators including the Federal Reserve unveiled the proposed rules, a long-expected regime shift around bank capital and risky activities such as trading and lending. The regulations incorporate new international standards created as a response to the 2008 global financial crisis.
    “These rules are critical and long overdue, particularly in the wake of the Silicon Valley and Signature Bank failures, and as risks from the weak commercial real estate market and other economic threats ripple through the banking system,” Warren said.
    Bank CEOs and their lobbying groups have said the increases are unnecessarily aggressive and would force the industry to curtail lending.
    In March, Powell told lawmakers that he expected “broad and material changes” to the proposal in the wake of the industry’s campaign against the rules. JPMorgan Chase CEO Jamie Dimon coordinated efforts to weaken the rules, urging CEOs to appeal directly to Powell, The Wall Street Journal reported last month.

    “It now appears that you are directly doing the bank industry’s bidding, rewarding them for their extensive personal lobbying of you,” Warren said in her letter. “Taking orders from the industry that caused the 2008 economic meltdown would sacrifice the financial security of middle-class and working families to line the pockets of wealthy investors and CEOs.”
    She further criticized Powell, saying “regulatory rollbacks” under the Fed chair allowed the regional banking crisis of 2023 to happen and “enriched Jamie Dimon and his Wall Street cronies.”
    Warren urged Powell to allow a Federal Reserve Board vote on the original, tougher Basel proposal by the end of this month. The window to finalize and approve the rules ahead of U.S. elections in November is closing, and analysts have said that the proposal could be delayed or killed if Donald Trump is reelected president.
    “Instead of doing Mr. Dimon’s bidding, you should do your job and allow the Board to convene for a vote on a 16% capital increase by June 30th, as global regulators determined was necessary to prevent another financial crisis,” Warren said.
    When asked for a response to Warren’s letter, a Fed spokesperson had this statement on Tuesday morning: “We have received the letter and plan to respond.”

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    Google’s Android apps are coming in 3D via Xreal as competition with Apple’s Vision Pro heats up

    Games and movies on Google Play Store apps can now be viewed in three dimensions via a new Android mobile device from augmented reality glasses maker Xreal, the Alibaba-backed startup said Tuesday.
    “We’re hoping this one can finally became the hero product that people gonna really like,” Chi Xu, founder and CEO of Xreal, told CNBC in an interview.
    The Beam Pro comes with two cameras that can capture pictures and videos for three-dimensional viewing in AR glasses.

    Xreal, an augmented reality glasses maker, has launched a connected Beam Pro mobile device that allows users to capture spatial video and 3D images.

    BEIJING — Games and movies on Google Play Store apps can now be viewed in three dimensions via a new Android mobile device from augmented reality glasses maker Xreal, the Alibaba-backed startup said Tuesday.
    The Beam Pro, the company’s latest product, is a smartphone-like device that can be used with AR glasses as a virtual mouse, and links the headset to Google Play Store apps including those for gaming, movie streaming and social media.

    Augmented reality imposes digital images over the real world, giving someone wearing AR glasses the impression of being in a 3D virtual space.
    Xreal’s latest product launch is an indication of how Alphabet is keeping afoot in the headset space after retiring Google Glass, even as Apple launched its widely anticipated VR offering this year.
    Apple’s Vision Pro allows users to see apps and a digitally captured version of the real world using what the company calls spatial computing technology.
    Xreal sells a range of AR glasses, some as light as 72 grams (2.5 ounces), that can display the screen of a connected laptop, smartphone or gaming console. The Beam Pro, which connects to the glasses via a cord, is set to begin U.S. deliveries by August and has a starting price of $199.
    “We’re hoping this one can finally became the hero product that people gonna really like,” Chi Xu, founder and CEO of Xreal, told CNBC in an interview.

    “I think this actually [is] gonna be the new category standard,” he said, adding some smartphone makers might “actually want to go this route.”
    Xu said part of the challenge for wider AR glasses adoption has been the lack of content, and the inability to incorporate user-generated images.
    That’s starting to change this year. The Beam Pro has two cameras that can capture pictures and videos for three-dimensional viewing in AR glasses, similar to Apple Vision Pro’s advertised ability to capture “3D spatial photos and videos.”
    Xreal said the Beam Pro uses Nvidia CloudXR technology for image rendering and Qualcomm’s Snapdragon spatial computing platform. The startup said it is also collaborating with Amazon Web Services to explore ways for improving the product’s processing power and functions.
    According to IDC Research, Xreal had the largest market share in global AR headsets in 2023.
    “Companies such as XREAL and Rokid demonstrated that there is an audience for AR glasses to consume gaming and multimedia content without spending thousands of dollars, and this will no doubt attract the attention of other companies seeking to do the same,” Ramon T. Llamas, research director with IDC’s Augmented Reality/Virtual Reality team, said in a report in April.
    A pair of Xreal AR glasses costs around $200 to $400, depending on the model and sales promotion.
    That means a set of Xreal AR glasses and Beam Pro costs significantly less than $1,000. Apple charges $3,500 for its Vision Pro.

    Different glasses by user

    Xu said Xreal has sold “really close to 400,000” AR glasses since the company launched in 2017. He said average weekly usage is about 4 hours, with the top 15% exceeding 10 hours a week.
    The company said in January it had shipped 350,000 AR glasses. Around the same time, Xreal said it received a $60 million injection that valued the startup at more than $1 billion.

    I think this one [is going to] bring the cloud gaming to the next level.

    founder and CEO, Xreal

    Xu said he expects tech glasses will evolve in three directions at the same time, ranging from a heavier and pricier virtual reality headset to a light-weight frame that can be worn all the time.
    “Unfortunately, we won’t see the kind of iPhone moment where everybody is converging to just one point,” he said, noting the variety of headset experiences. “I believe different people find different kind of flavor and combination there. But all of them haven’t taken off yet.”
    It’s unclear how many Vision Pros Apple has sold since it launched in the U.S. earlier this year. The headset is due to launch outside the U.S. on June 28, beginning in mainland China, Hong Kong, Japan and Singapore.
    The Beam Pro launched in China in late May. As of June 12, it had reached just under 5,000 orders, Xu said, adding he hoped that by the end of a mid-June promotional period, orders would reach about 10,000.

    Cloud gaming potential

    By late August or early September, Xu expects the Xreal Beam Pro will be able to use 5G cellular networks in addition to Wifi.
    Xu said 5G support creates new opportunities for the development of cloud gaming, and that Xreal is already in talks with major global cloud gaming companies.
    “I think this one [is going to] bring the cloud gaming to the next level because, honestly, if you only play cloud gaming on a cell phone, the size of the screen didn’t make that much sense, but [when] you can put AR glasses there, you have a massive screen,” Xu said.
    Cloud gaming relies on remote servers and an internet connection to offer people a smooth gaming experience with just a small file download.
    As for non-gaming applications, Xu said Xreal’s strategy is to build on people’s existing technological habits using smartphones and changing that slowly into a 3D space.
    “We’re not trying to change people’s way of using technology dramatically, right?” he said. “We’re trying to take small steps and make that faster.” More

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    FDA approves Merck vaccine designed to protect adults from bacteria that can cause pneumonia, serious infections

    The Food and Drug Administration approved Merck’s vaccine designed to protect adults from a bacteria known as pneumococcus that can cause serious illnesses and a lung infection called pneumonia.
    An advisory panel to the Centers for Disease Control and Prevention will meet on June 27 to discuss who should be eligible for the shot, called Capvaxive
    Some analysts view the jab as a key growth driver for Merck as it prepares to offset losses from its blockbuster cancer drug Keytruda.

    Arrows pointing outwards

    Merck’s new pneumococcal vaccine.
    Courtesy: Merck

    The Food and Drug Administration on Monday approved Merck’s new vaccine designed to protect adults from a bacteria known as pneumococcus that can cause serious illnesses and a lung infection called pneumonia, the drugmaker said.
    Merck’s shot, called Capvaxive, specifically protects against 21 strains of that bacteria to prevent a severe form of pneumococcal disease that can spread to other parts of the body and lead to pneumonia. It’s the first pneumococcal conjugate vaccine designed specifically for adults and aims to provide broader protection than the available shots on the market, according to the drugmaker.

    Healthy adults can suffer from pneumococcal disease. But older patients and those with chronic or immunocompromising health conditions are at increased risk for the illness, especially the more serious or so-called “invasive” form. 
    Invasive pneumococcal disease can lead to meningitis, an infection that causes inflammation in the area surrounding the brain and spinal cord, and an infection in the bloodstream called bacteremia. 
    “If you have chronic lung disease, even asthma, you have a higher risk of getting sick with pneumococcal disease, and then being in the hospital, losing out on work,” Heather Platt, Merck’s product development team lead for the newly cleared vaccine, told CNBC in an interview. “Those are things that have a real impact on adults and children, their quality of life.”
    Around 150,000 U.S. adults are hospitalized with pneumococcal pneumonia each year, Platt said. Death from the more serious form of the disease is highest among adults 50 and above, Merck said in a release in December.
    Even after the FDA approval, the company’s single-dose vaccine won’t reach patients just yet. An advisory panel to the Centers for Disease Control and Prevention will meet on June 27 to discuss who should be eligible for the shot.

    Platt said Merck will support the committee’s decision and is ready to supply the vaccine by late summer. 

    Merck’s competitive edge

    Some analysts view Capvaxive as a key growth driver for Merck as it prepares to offset losses from its blockbuster cancer drug Keytruda, which will lose exclusivity in the U.S. in 2028. 
    The market for pneumococcal conjugate vaccines is currently around $7 billion and could grow to be worth more than $10 billion over the next several years, according to a November note from Cantor Fitzgerald analysts. 
    Merck’s newly approved shot could boost its competitive edge in that space, which includes drugmaker Pfizer. Merck currently markets two pneumococcal shots, but neither is specifically designed for adults. For example, the company’s existing shot Vaxneuvance is approved in the U.S. for patients 6 weeks of age and older.
    Pfizer’s single-dose pneumococcal vaccine, Prevnar 20, is the current leader in the market for adults. But Merck expects its new shot to capture the majority of market share among adults, Platt said. 
    “We do expect there to be rapid uptake of” Capvaxive, she said, adding that the company is confident that data on the shot will “really resonate” with clinicians and policymakers. 
    Merck’s pneumococcal vaccine protects against eight strains of the bacteria that are not included in any other approved shot for the disease. Those eight strains account for roughly 30% of invasive pneumococcal disease cases in patients 65 and above, according to a release from Merck, citing CDC data from 2018 to 2021. 
    The 21 strains included in Merck’s shot account for roughly 85% of invasive pneumococcal disease cases in adults 65 and above, Merck, citing the CDC data. Meanwhile, Pfizer’s Prevnar targets strains that only account for roughly 51% of cases in that age group, based on the same CDC data. 
    The FDA’s approval is partly based on Merck’s late-stage trial called STRIDE-3 that pitted the vaccine against Pfizer’s Prevnar 20 in adults 18 and up who had not previously received a pneumococcal vaccine.
    Correction: This story has been updated to reflect 150,000 U.S. adults are hospitalized with pneumococcal pneumonia each year. More