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Home > Blogs > QFINANCE Editor > A week in the world of business and finance (July 18 – 22, 2011)

A week in the world of business and finance (July 18 – 22, 2011)

Each week QFINANCE will endeavor to bring you some of the biggest news stories from the past five days in finance and business, as well as some of the most fascinating websites and links that have crossed our path. We hope you'll enjoy reading, we hope you'll have a great weekend and we hope that you'll come back each Friday to brush up on your finance and business knowledge.

Monday July 18
In what can only be described as an insane day of trading, the week began with Europe’s financial stocks dropping to their overall lowest levels in two years, as credit markets revealed that the debt crisis was spreading to other major EU nations. After the EU stress tests were released Italy suspended trading in government and corporate bonds, thus cementing the fears of many. The euro reached a record low against the Swiss franc, gold went to a new high of $1,600 (£1,000) an ounce and the FTSE and Dax lost 1.55 per cent. In Britain, the market cap of the biggest banks shrank by £6.3bn, as RBS dropped 6 per cent, Barclays 3.7 per cent and Lloyds an incredible 7.5 per cent.
Read about the markets and the European sovereign debt crisis in more depth here.

Meanwhile, across the pond, the Dow closed 0.76 per cent down and the Nasdaq had fallen by 0.89 per cent. Also, credit ratings agency Moody’s recommended to the US government that they scrap the debt ceiling after another day of drawn-out discussions.
Read about the effect on the US in more depth here.

Tuesday July 19
Bank of America posted its quarterly report and showed a loss of $8.8bn (£5.2bn) for the three-month period to the end of June. Analysts expected something close to this biggest ever quarterly loss for the bank after it revealed in June that it settled with mortgage bond investors for $8.5bn, when the investors demanded that the bank repurchase toxic home loans held in mortgage-backed securities. This comes along with an announcement that the bank was due to take more than $14bn of other home-loan-related charges in the same quarter. Even without these mortgage issues, BoA and chief executive Brian Moynihan still face significant difficulties, including a decline in interest income and a 0.17 percentage point decline in lending margins from the first quarter.
Read about the Bank of America's quarterly results in more depth here.

Wednesday July 20
With the world edging towards Apple (no, it’s not a generalization when you look at this report) it would be easy to see how Intel, the world’s largest chipmaker, might get a bit of a battering in the market. However, Intel posted record revenues for the second quarter, making $13bn (£8bn) for the first time ever, a rise of 20% from last year, with profits rising slightly to $3bn. The company put this down to high demand coming from emerging markets for computing devices, adding that consumer demand in more developed economies stayed rather weak. Intel stated that it expects a similar rise in sales in the second half of the year.
Read about Intel's record revenues in more depth here.

Thursday July 21
At an emergency summit of the 17 member countries within the Eurozone, leaders of the countries agreed a bail-out package for Greece worth €109bn ($155bn, £96.3bn). The deal involves support from the International Monetary Fund (IMF) and sees private lenders and banks contributing for the first time, pledging €37bn to the package. George Papandreou, the Greek Prime Minister, said: “We now have a programme and a package of decisions which create… a sustainable debt management for Greece… it will also mean the lightening of the burden on the Greek people.”
Read about the Greek bail-out package in more depth here.

Today, the markets were seen to react positively to this move, with UK and French markets gaining more than 1% in morning trading and the euro improving against the dollar.
Read about the reaction in the markets in more depth here.

Friday July 22
Macmillan Publishers must pay £11.3m after a High Court order found the company guilty of “unlawful conduct" in relation to its educational division in East and West Africa. The Serious Fraud Office (SFO) began their inquiry last year as to whether Macmillan had made “bribery payments” in order to secure a large deal to print textbooks in South Sudan. A report from the World Bank, who were set the task of rebuilding education systems in South Sudan after decades of civil war, claimed that a representative of Macmillan had tried “to pay a sum of money with the view in mind of persuading the award of the World Bank funded tender to supply educational materials in Southern Sudan”. The SFO reported that “the company did not win the contract.”
Read about this High Court order against Macmillan in more depth here.

Come back next Friday for another report on the world of business and finance.

More great links that have crossed our path this week:

The next-generation of ETF & Indexing Investments is here!
ETF & Indexing Investment Summit Asia 2011 is the leading dedicated ETF and indexing investment event in the Asia region. This business meeting provides preliminary networking and learning opportunities for investment professionals to exchange their experiences with peers and learn best practice from leading industrial experts.

Payables Optimization Through Business Rule Driven Audit
Hear from Debbie Hamel, President of TakeCharge Technologies and learn about critical steps in the foundation and points of integration for driving maximum value out of your spend. An approach to automation of audit using complex algorithms, rules and technology to drive up savings, efficiencies, compliance and overall P2P value will be covered. To read more, go to P2P Online Library.

Tags: Apple , bail out , bail-out package , Bank of America , Barclays , BoA , Brian Moynihan , bribery , China , corporate bonds , Dax , debt crisis , dollar , Dow , emerging market , emerging markets , EU , EU stress test , euro , european sovereign debt crisis , European Union , eurozone , FTSE , George Papandreou , gold , government bonds , Greek Prime Minister , IMF , Intel , International Monetary Fund , Llyods , Macmillan Publishers , Moody's , mortgage bond investors , mortgage bonds , quarterly report , RBS , Royal Bank of Scotland (RBS) , Serious Fraud Office , SFO , South Sudan , sovereign debt , stress tests , swiss franc , unlawful conduct , US , World Bank
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