Instagram with the potential to change the world.

Intagram has become more powerful now with more than 300 million users. CEO Kevin Systromm, CEO of the company said that it is exciting and also claimed that the compnay would not stop to grow. Twitter has 284 million users using it's network each month. Instagram was bought by Facebook in 2012 and Facebook has 1.35 billion monthly active users.
 Newsbeat ahead of the announcement, Kevin Systrom said: "Instagram is about seeing a live pulse of the world right now, it's not just about taking a photo of a cute baby or a cute dog."
"We want to be all about authentic users and you making sure that you know you're following real people not bots, not spam accounts, not fake accounts." Mr Systrom added.

Instagram will also introduce verified accounts that has blue tick symbols used by Facebook and Twitter. Instagram is also deleting fake accounts that does not follow the rules. This may cause decrease in the number of followers of some users.Co-founder of the company provided some clues that the company would soon be adding new event based features too.

The company announced it had reached 100million active monthly users in February 2013. It even introduced advertising.  Sponsored posts allowed brands to reach the app's growing number of users.

"Early on I would review and approve every single ad before it went on," Kevin Systrom said.
"The reason why we're doing this is as a growth engine for Instagram.
"When you get to 300m users it's not cheap to run that service and you need to make sure to be able to hire more people."

It introduced direct messaging to compete with rivals WhatsApp and Snapchat.

"We're absolutely paying attention to the pitfalls companies have faced before and trying our best to avoid them."

Ryanair expects profits to be between €810 million and €830 million

Ryanair has upgraded it's full-year traffic and profit forecast following a 22% jump in November passenger numbers to over 6.35 million.

Now, the airline expects profits to be between €810 million and €830 million,

 with expected passenger numbers from 89 million to more than 90 million.

Even though there is increase in November seat capacity by 13%, load factors were 88% for the month. That's 7% more than previous month.


In the mean time, rolling annual traffic to November is 85.4 million customers. It's an increase of 5%.


Kenny Jacobs,Chief marketing officer said the increase in profits is credited to 'lower fares, our stronger forward booking strategy and the continuing success of our 'Always Getting Better' customer programme'.

On the other hand, EasyJet reported 4.39 million passengers which is up by 3.1%. It's load factors were up by 0.5 percentage points to 89.5% and annual traffic grew to 65.2 million.

Japan's Nikkei hits seven-year high

NKY:IND Open 15036.87 High 15089.9 Low 14919.71 Close 14936.51

Japan's Nikkei got a seven-year high Tuesday when market was filled with the rumors that Bank o f Japan buying stocks. It closed at 17663.22 which was up by 0.4%.

After Moody's investment service rated Japan's credit rating from A1 to Aa3, the index had fallen. After the national sales tax was delayed, Moody's move high lighted Japan's economy after an increase in the national sales tax was delayed.

Analysts are still positive about the investment. They are still affected by the activities of BoJ.

The Topix gained 0.9 percent to 1,422.82, and the JPX-Nikkei Index 400 advanced 0.9 percent to 12,946.63.

High:17,687.70
Low:17,476.42
Day Range:17,476.42 - 17,687.70
52-Week Range:13,885.11 - 17,687.70
Year To Date:+10.13%1-Year:+14.73%

Discount Investment Shares, Bonds seem too risky to invest

Shares and bonds of Discount Investment Corp. (DISI) are sliding downwards because investors are questioning that the holding company may struggle to repay debt after an IPO of a subsidiary was pulled by the company.

Discount’s 2.8 billion shekels ($725 million) bonds due  Dec. 2025 got the yield of 4.95 percent and it raised 1.3 percentage point to 7.39 percent, the highest this year. But its stocks plunged 24 percent to 9.50 shekels. This means that they have dropped 62 percent this year. On the other hand, shares of parent IDB Development Corp. dropped to 2.135 shekels, which is 17% down.

The world's largest generic agro-chemicals,Adama Agricultural Solutions Ltd. failed to make agreement with investors on pricing. Then it postponed an initial public offering. Currently, Discount has 40 percent of Adama. However, IDB seems to wait for a successful IPO to inject value into the company and refinance debt. IDB has Argnetine businessman Eduardo Elsztain and Moti Ben-Moshe. After Nochi Dankner failed to bring in investors for the company to repay debt, he stepped down.
Yaniv Pagot, chief strategist for Israel-based Ayalon Group Ltd, said,“The company has enough cash to repay debt comfortably till 2016, but what will happen once that cash ends, from 2017 onwards?”
He added that Discound could have used valuation of Adama as collateral to refinance debta and raise additional funds by selling shares in a secondary offering.

At the end of June, Discount had cash and cash equivalents of 1.86 billion shekels and according to the second-quarter result, it had net debt of 3.4 billion shekels.

Goldman Sachs Group Inc. is trying to avoid congressional scrutiny by detaching two commodities units

Goldman Sachs Group Inc. is avoiding congressional scrutiny by detaching two commodities units. One among two paid back it's investment in less than four years and remaining other is still on coa in Colombia


According to documents released by the U.S. Senate Permanent Subcommittee on Investigations, Goldman Sachs bought Metro International Trade Services LLC for $451 million in 2010. It's a  metals warehouse operator. In September 2013, the banks's board viewed a presentation that showed $465 million of gains from the investment. The profit excluded carry charges.

Head of Goldman Sachs’s global commodities principal investments group,Jacques Gabillon, said at a Senate hearing that the firm has received interest from potential buyers in Europe, Russia and China and it is still in the sales process for Metro International Trade Services LLC. The subcommittee chairman, Michigan Democrat Carl Levin, accused the bank of using Metro to improperly influence aluminum prices. Gabillon denied that the bank is involved in influencing aluminum prices.

As aluminum investor rose, Metro International Trade Services LLC increased its warehouses and  a plunge in demand for the metal after the financial crisis. Upto now the stake had returned $501 million in dividends. It had a carrying value of $396 million with debt.

There's still other profitable investment of Goldman Sachs. In 2003, the company purchased Cogentrix Energy Inc. for $457 million. Over the life of the investment it realized $1.75 billion of gains.


Related:
Goldman Sachs posts earnings, revenue that beat expectation

There was not always profit for the company. As of the September 2013 presentation, Goldman Sachs paid $569 million for Colombian Natural Resources, which had produced total gains of $2 million as of the September 2013 presentation. CNR even estimated last year additional cost upto $220 million for port.

Goldman Sachs bet that the price of coal would fall. It produced $246 million of gains, according to the 2013 presentation. According to the report from senate the firm is considering selling its CNR stake.

Areva had a net loss of 694 million euros ($870 million) in the first half.

After the French nuclear firm suspended its financial targets for 2015 and 2016, Areva SA dropped the most since 1999. Due to delays to a Finnish project and slow demand in japan, the French nuclear reactor maker abandoned financial targets for the next two years. The shares slumped as much as 23 percent.

Areva announced that  it was reviewing both its future goals and mid-term funding plan. However, Areva said both its revenue and profit forecasts for this year would not be affected.

9.96

-0.22 (-2.12%)

Real-time:   5:35PM GMT+1

Areva is owned by French government which has 87%  and it is expected that it would present a new financial outlook for 3 years of it's full result.

With series of warnings in recent months, the firms makes an announcement.A series of warning were there in recent month. It reported a €694m (£555m) loss for the first half of the year in August and said 2014 revenue would fall 10%, more than the 2-5% drop it originally forecast in February.

In October, it also announced new assest sales and capital spending cuts

Following the 2011 nuclear accident in Fukushima, which was triggered by a massive earthquake and tsunami, and the rise in the use of shale gas in the US.

Areva’s 750 million euros of 3.125 % bonds due March 2023 dropped 4.1 cents on the euro to a record 93.1 cents, the biggest drop since the notes were issued on March 12.

The company’s 1 billion euros of 15-year notes sold in September 2009 plunged 5.8 cents to a two-year low of 102.6 cents, the data show.

Areva had a net loss of 694 million euros ($870 million) in the first half.

Areva Data:

Airbus profits rise 16% to €1.399bn but more A400M is still making it's operation difficult

Airbus reported net income rose 16% to €1.399bn.This is the first time that Airbus reported a rise in profit for the nine months of the year. The report also came with a warning of more problems for its A400M military plane. Revenues rose 4% to €40.5bn and underlying earnings rose 12% to €2.59bn ($3.2bn; £2.1bn) for the nine-month period.

Currently: AIR:FP  48.4550 EUR + 0.7550  +1.58%

A400M military plane has problem related to negative cost and risk evolution. In 2010, problem started to delay it's production and received a bailout of €3.5bn. There were cost of €20bn with orders from several European countries and A400M has a fixed-price contract that hit production problems and cost-overruns. Except A400M, Airbus's products are doing great.

Airbus is taking responsibility of any future impact in its full-year results to be published early next year.

Harald Wilhelm, chief finance director of Airbus,told journalists: "Given our past history on it (the A400M), the objective remains to avoid any incremental charge, but we are on the way to assessing it. If you ask me whether I can exclude it, I cannot say that this is the case, so it's work in progress."

The order book up to the date 30 September, it was worth €765.4bn while it was worth €680.6bn at the end of 2013.

Tom Enders, Airbus Group chief executive, said: "An improved operational performance drove revenues and profitability higher over the first nine months of 2014."

The environment is not yet favorable, adverse exchange rate is affecting it's profit of last three month.
See Nissan's profit rise due to favorable exchange rate.

Airbus Data:

Berkshire's earnings takes hit, but Buffett is still surpassing the expectation

Buffett’s personal wealth notched up by about $55 million

Berkshire Hathaway (BRKA) had a huge hit on earnings during the third quarter. Even then the earnings were better than anticipated. The investment company took a massive $678 million charge for its investment in Tesco (TESO). Tesco admitted to overstating its profit forecasts.

Berkshire A shares hit a new 52-week high. It crossed the $200,000 mark for this first time this summer and finished regular trading Friday at $214,970 a share. Later it hit $215,925 in intra day trading. On the other hand, Berkshire’s B shares finished the day up slightly at $143.61 and raised few cents higher after the bell. They are worth 1/1500th of their pricier counterparts and they were flat in after-hours trading.


The portfolio of Berkshire is still ahead for the year. It earned $4.6 billion, or $2,811 per Class A share during the third quarter. There was expectation operating earnings of $2,593.85 per Class A share.It's down by 8.6% from the same period last year, that's better than Wall Street 's expectation. Operating profit rose to $4.72 billion, or $2,876 per class A share, from $3.66 billion, or $2,228 a class A share. Revenue rose to $51.2 billion from $46.5 billion. Profits for the first nine months of the year are more better than that of 2013. Next quarter is not expected to go well. Berkshire lost big money late last month on shares of Coca-Cola (KO) and IBM (IBM, Tech30). These companies delivered disappointing earnings.The investment firm took a $1 billion hit on Coke (KO), which fizzled 6% after the company reported earnings that didn't live up to expectations of investors. Worsening the situation, Coke said it doesn't expect a much better 2015.

Berkshire Hathaway's one of the largest investment is Coke. It holds 400 million shares and his son Howard sits on the beverage company's board.

IBM (IBM, Tech30), another top holding, caused Warren Buffett a loss of $1.3 billion as the stock plunged. The company is looking for a revitalization after reporting disappointing earnings and shedding its chip unit at a major loss.  Buffett's company, Berkshire Hathaway holds over 70 million shares.

Today's Range	142.87  -  143.99		EPS Due Date	3/3/2015 Est
52-Week Range	108.12  -  143.99		EPS % Chg (Last Qtr)	29%
Price % Chg. YTD	21.13%		3 Year EPS Growth Rate	14%
Price % Chg. Last 4 Weeks	4.76%		EPS Est % Chg (Current Yr)	7%
50-Day Avg. Volume	3,784,400		Annual ROE	7.39%
Shares Outstanding	1181.9 Mil		Sales % Chg (Last Qtr)	10%
Float	1170.0 Mil		3-Year Sales Growth Rate	12%
IPO Date	N/A		Debt %	33%
Investment Bank	Salomon Smith Barney		Market Cap	$354.22 Bil
% Mgmt Owns	0.4%		Profit Margin	12.1%
PE Ratio	22		Sector	Misc
Dividend Yield	NONE		Industry Group Rank	77
Alpha	0.03		Industry Group	Diversified Operations
Beta	0.92

Nissan has reported a 25% increase in half-year profits

Nissan reported net income of 237 billion Japanese yen($2.08billion). It's 25% more in half-year profits. The Japanese car maker is supported by strong sales in North America and there are signs of stabilization in western Europe.
With £1.3bn net income, it said it had seen "strong demand" for its new products and there is rising sales in its key market of North America.

Nissan and other car makers in Japan have strong advantage due to weaker yen. This is making Japanese products cheaper when they are exported. The yen depreciated after Friday's surprise decision from the Bank of  Japan to expand it's stimulus measure. The central bank is continuously attempting to boost economy and lift inflation in Japan.

The cost of Japanes goods sold abroad are affected by weaker yen. Nissan said that weaker yen would help to increase sales in China and some other nations. Nissan's chief competitive officer Hiroto Saikawa said that "all in all we think it is positive for industry and the economy".

At the beginning of this year, there was a 10% rise in Nissan's full-year profits which was made possible by increased sales, weaker yen and reduced cost.

Nissan's sales was up by 5.8% compared with the same period a year ago. It sold 2.58 million vehicles in the six-month period.

Carlos Ghosn said,"Nissan successfully overcame challenging market conditions in the first-half of the fiscal year, delivering solid revenues and profitability amid encouraging demand for our latest models."

"This offset slower demand in Japan and continued volatility in Russia and other emerging economies."

Nissan's sales is affected by a slowdown in China. It's the worlds largest car market. In addition to that Japan's consumers are still recovering from a sales tax hike in April. While things are going on it's way Nissan revised its full-year sales forecast down by 200,000 to 5.45 million reflecting lower than expected sales in China and other new markets.

Today5d1m3m1y5y10y

52wk high:20.27

52wk low:16.45

EPS:N/A

PE (ttm):N/A

Div Rate:N/A

Yield:N/A

Market Cap:42.07b

Volume:140,668

U.S. stocks fall as Fed ends 6-year effort to stimulate economy, Facebook down by 6.1%

The unemployment rate is now 5.9%, its lowest mark since QE began. There are over 8.5 million more people employed now than in November 2008, according to the Bureau of Labor Statistics

Federal Reserve confirmed that it will end it's asset-purchase program due to stable growth path of U.S. economy. It caused stocks decline in U.S.  The decision provides a strong base on how much the economy has improved since the recession. This decision ignited a down rate in U.S. stock market.

Facebook dropped 6.1 percent to $75.86, the most since March. 

Facebook Inc. predicted the slowest revenue growth since the first quarter of 2013 and it lost 6.1 percent after that prediction. Facebook dropped 6.1 percent to $75.86, the most since March. The owner of the largest social-media website projected fourth-quarter sales that missed the highest of analyst estimates. Facebook also said spending would increase 50 percent to 70 percent next year as the company hires more and invests in newer products.

The Standard & Poor’s 500 Index (SPX) slipped 0.1 percent to 1,982.30 at 4 p.m. in New York, trimming an earlier slide of 0.8 percent. The Dow Jones Industrial Average lost 31.44 points, or about 0.2 percent, to 16,974.31. About 7.3 million shares traded hands on U.S. exchanges.

"It's in response to the Fed acknowledging the improvement in the economy, the improvement in the labor market and the diminished risks on the inflation side of things," says Greenhaus. Dan Greenhaus is a chief strategist at market research firm BTIG in New York.

S&P 500 down 7.4 percent from an all-time high of 2,011.36 in mid-September through Oct. 15 because of huge concerns that Europe will be going into recession just as Fed bond buying ends. But there is still positive part as well.

60 percent of the S&P 500 companies have surpassed revenue projections and 80% have beaten the estimated earnings.

GlaxoSmithKline's shares rose 4% after its third-quarter results slides it's way beyond expectation and announces to return an additional £4billion to shareholders by a special share scheme. GSK is one of the world's biggest drug manufacturer and now it is on rise. The UK pharmaceuticals giant published a pre-tax profit of £548m till the end of September for three months. It is way more below than £1.4 billion a year ago. Even then,the results beat analyst forecasts.

U.S. Steel (X) advanced 5.1 percent to $40.08. Company reported more than estimated earning with the help of the quadrupling of flat-rolled steel sales.earnings.

Warren Buffett loses $2 billion in two days

IBM and Coke may be losing money, but Buffett's largest position, Wells Fargo, has raised 11% this year. 

Warren Buffett has lost $2 billion this week. Mr Buffett is known for making most likely estimation about established companies rather than investing in riskier stocks. Buffett is known for focusing on the long-term performance of his investments.

Berkshire Hathaway investment house portfolio includes huge parts of  Coke and IBM, both of which have decline in profits in the past two days. The investment firm took a $1 billion hit on Coke (KO), which fizzled 6% on Tuesday after the company reported earnings that didn't live up to expectations of investors. Worsening the situation, Coke said it doesn't expect a much better 2015.

Berkshire Hathaway's one of the lasgest investment is Coke. It holds 400 million shares and his son Howard sits on the beverage company's board.

On Monday,IBM (IBM, Tech30), another top holding, caused Warren Buffett a loss of $1.3 billion as the stock plunged. The company is looking for a revitalization after reporting disappointing earnings and shedding its chip unit at a major loss. The stock dropped 7% on Monday after then news was made public and slid again on Tuesday. It is off nearly 13% so far this year, and Buffett's company, Berkshire Hathaway holds over 70 million shares.

Buffet has been actively quoted a lot this year for his misses. Berkshire Hathaway's investment on British grocery chain Tesco (TSCDY) has also been a loss, with maximum drop: nearly 47% this year.

On the other hand, there's silver lining and it's more vivid, investors are supporting the company. Berkshire stock climbed slightly on Monday and Tuesday, and is up more than 17% this year.

IBM and Coke may be losing money, but Buffett's largest position, Wells Fargo, has raised 11% this year. And eventhough the market goes down, Buffett is adding more stocks to his portfolio.He said in an interview  "the more stocks go down, the more I like to buy."

Adidas on Rise after Reebok purchase

Adidas announced plans to return as much as 1.5bn euros (£1.2bn) to shareholders over the next three year

Everything was fine after Adidas purchased US-based Reebok in 2006. But things has changed in few years. It's struggling to boost sales. Reebok even lost a contract to supply the US National Football League. This has lowered it's market shared. And now things seem promising for Adidas and Reebok.Speculations are being made on Adidas and it's  series of profit warnings.

"Reebok is one of the few brands enjoying some success for Adidas lately," Jon Copestake, retail analyst at The Economist Intelligence Unit told the Reuters news agency.

Adidas's share rose 6% in early trading after a report explained a group of investors was considering a bid for the company's Reebok brand. Hong Kong's Jynwel Capital and investment funds in Abu Dhabi were considering an offer worth $2.2bn (£1.36bn) according to The Wall Street Journal. The news provided investors a support for rationalizing Adidas' share purchase and initiated boost for the German company's flagging share price which was down about 40% this year.

"From the Adidas perspective, that would be a great price. Whether management would accept it is another matter as it would be an admission of defeat,"  Joerg Philipp Frey ,Warburg Research analyst said.

Adidas carried on Reebok acquisition to challenge Nike on it's home The Reebok acquisition was designed to help Adidas challenge Nike and eventually influence it's status as German company's own brand.

Many investors are targeting Reebok now. German media reported last month that hedge funds including Knight Vinke, Third Point and TCI were doing internal works to  buy stakes in Adidas to force management to make sweeping change and it even included the sale of Reebok,

At beginning of October, Adidas announced plans to return as much as 1.5bn euros (£1.2bn) to shareholders over the next three year.

In May it said that it was considering offers for its Rockport shoe brand, which it acquired when it bought Reebok. But Adidas has not yet announced any notice about accepting offers regarding Reebok.

Goldman Sachs posts earnings, revenue that beat

Goldman Sachs stunned analysts working on Wall Street when it reported third-quarter earnings of $4.57 a share on revenue of $8.39 billion. 

Goldman Sachs stunned analysts working on Wall Street when it reported third-quarter earnings of $4.57 a share on revenue of $8.39 billion. The report tells more earnings per share and more revenue than expected by the analysts.

Goldman was expected to deliver third-quarter earnings of $3.21 a share on $7.85 billion in revenue. This was from Wall Street.

Even though Goldman is the latest bank to report earnings this week. So far, it's been a mixed bag for banks with JPMorgan Chase missing earnings estimates, Wells Fargo reporting in line and Citigroup topping earnings estimates.

During the quarter, Goldman announced it would repurchase residential mortgage-backed securities bought by Fannie Mae and Freddie Mac from 2005 to 2007.  It would pay $3.15 billion for repurchase.

Tesco's share price has fallen nearly 50%, a huge mistake by the Sage of Omaha, Warren Buffett

Tesco's share price has fallen nearly by 50% reducing the value of investment by 50%.

The Sage of Omaha has said that his decision to invest in Tesco is a "huge mistake."
Berkshire Hathaway firm owns a 3.7% stake in Tesco, worth hundreds of millions of dollars and now  the supermarket's sales are declining and in addition to that share price has fallen to an 11-year low this year.
Tesco shocked investors last week by issuing a string of profit warnings. It revealed it had overstated its expected half-year profits by £250m.

The chairman of the Parliamentary Business Committee, Adrian Bailey, has described Tesco's error as "stratospheric".

He told on CNBC,"I made a mistake on Tesco. That was a huge mistake by me."

Mr Buffett is famous for comprehensive ability to understand the performance of a business for long period of time but now it does not seem so. The risk this time in Tesco are high.

Berkshire Hathaway's portfolio consist names like Coca-Cola, IBM and American Express and it started to include Tesco in 2006 and by 2012 owned more than 5% of the business.

What happened next?
The stake had fallen to 3.7% by the end of 2013 , with investment capital of  $1.7bn and continuing the fall since then Tesco's share price has fallen nearly 50%. It has now made the value to investment half of it's original value.

In addition to that Tesco has seen declining sales amid increased competition. The discount retailers like Aldi and Lidl are in the in the market and Marks & Spencer and Waitrose are providing high end offerings to attract customers.

Tesco says  Financial Conduct Authority (FCA) has been notified it that it is under investigation following its admission last week that it overstated its half-year profit guidance by £250m.
The supermarket giant will co-operate fully with the FCA and other relevant authorities.

The news induced a new fall in Tesco's share price, its lowest for more than 10 years. leaving it down 3% at 180p.

Tesco has itself has  launched its own investigation into the issue.  Deloitte, together with Freshfields, the group's external legal advisers will do the investigation.

Four executives were suspended in connection with accounting problem and there was change in high level management. Chief executive Dave Lewis has only been in the job a month, while chief financial officer Alan Stewart, who was originally due to join the company on 1 December, had his start date brought forward and took up the post last week.

BP's share highly under performing due to Western sanctions on Russia

Sanctions against Russia is viewed as an obstacle for BP to keep it's business at normal pace. BP just posted a rise in second quarter profits. BP has around a 20% stake in Russian energy giant Rosneft and the sanctions against Russia due the Ukraine crisis can affect BP in future. BP said, "Sanctions could adversely impact our business."

BP is worried about the impact of sanctions and relationship with Rosneft. The crisis may affect the level of income, production and reserves as well as BP's investment and reputation. The company's second quarter profits is $3.2bn (£1.9bn), up from $2.4bn in the same period last year. For the second quarter, BP said higher oil production in higher-margin areas such as the Gulf of Mexico had boosted its profits. But for third quarter, the production is not expected to be high as second quarter due to the seasonal maintenance in Alaska and the Gulf of Mexico as well as the planned major turnaround.

BP has around a 20% stake in Russian energy giant Rosneft and the sanctions against Russia due the Ukraine crisis can affect BP in future.

If the sanctions become more intense, there could be prohibition of exports of technologies used in the Russian Oil sector.

BP's share price is affected along with political conflicts as BP is more exposed to political situations in Russia than any of its competitors. Analysts are seeing BP's share hugely under-performing. BP's share price had risen by 2% since early June, while Royal Dutch Shell, Exxon Mobil and Chevron had each increased by more than 9%.

On Tuesday, BP shares were up during early trading, but later fell 1.6% to 489p because of the impact on western sanctions on Russia and it's still going down.

Russia's move to prevent itself from high inflation and low investment.

From 7.5% to 8% now. Russian interest rate has increased.

Russia is acting to prevent their economy from the risk of high inflation. The situation in Russia after sanctions from west and recent tension in Ukraine are viewed as the major factors for the probability of increment in inflation.

Since the European economy is in stress and whole Eurozone has low inflation of 0.5%, Russia is also experiencing the stress and other restrictions too. With raising pressure from the west and it's conflict with Ukraine, Russia is anticipating high rate of inflation and in order to check the  risk of high inflation Russian Central bank decided to raise the interest rate by 50 basis points, or half a percent, to 8% per year. In June, core inflation grew to 7.5%, well above the bank's forecast of up to 6.5% for the year.

Analysts were not expecting such changes in the interest rate. They are aware of the vulnerability of the Russia's economy.After sanctions were implemented domestic stocks and the rouble tumbled earlier this year. Analyst are observing the concern of central bank for the potential impact.
The bank is working to reduced the inflation risk  which are caused due to a combination of factors, including, inter alia, the aggravation of geopolitical tension and its potential impact on the rouble exchange rate dynamics, as well as potential changes in tax and tariff policy. The bank point outs the main reason for inflation acceleration is the effect of the observed rouble depreciation on prices of a wide range of goods and services.

While anxious investors are pulling their money out, the exchange rate might still go down.

The consumer price growth rate increased to 7.8% in June and the bank trying to put down the consumer price growth to 4% with increased interest rate.

Russia is concerned about the money leaving from the country. Analysts view this act as  move to prevent large amount of money to leave the country.With such tension in the reason, investors are still searching for the better reason to invest.

Microsoft after Bill Gates and Steve Ballmer. Satya Nadella

Microsoft is making a history again, it's cutting up 18,000 jobs. This is the highest cut in the company's thirty nine years of history. Most of the cuts will be in a recently bought unit, Nokia. It is estimated that around 12,500 jobs will be cut for the unit. This is being announced with 18 months of closing acquisition. Microsoft pledged to cut $600 million per year in costs.

The firm was expected previously to reduce 6,000 initially and while the actual cut are being announced, it became more sever,18,000 jobs. The firm has 127,000 employees world wide.

While it's reducing the number of employees it's not yet specifying locations yet.

The company  is also changing it's core business focus. The company is a software giant and it's still is. But, new CEO is offering something that might be questioning the trust of the investors. In February Microsoft appointed new CEO Satya Nadella who wants the firm to shift it's focus to online services, apps and devices away from software.
The firm is focusing on efficiency by reducing the chain of command and having fewer layers of management. IBM was weak at to reduce it while competing with the firm during the era of technological warfare.

He wore in an announcement,"Making these decisions to change are difficult, but necessary."

The firm is going to complete the re-size by the end of June next year.  It said the affected staff would be notified over  the next six months.

In total it said the cuts, including severance pay, would cost it between $1.1bn to $1.6bn (£643m to £935m) over the next year. Though it might seem to be costly for the company to cut job this will put the company in more favorable situation in coming years. The company will find itself in position where salary to employee and other expenses are much less than at present.

Analyst are still hopeful about the company's ability to be successful in online world. Satya Nadella is expected to put forward massive changes in the company.

Using it's $7.2 billion acquisition and all other resources, Microsoft is working to be a leading company in mobile devices and cloud based services. Satya Nadella is willing to put productivity and innovation as the focus of the company. It's seems the firm will be working in many innovative ideas to get what's useful for people. It's now focusing on Skype and Cortana.

Mr Nadella recreated image of the firm as "the productivity and platform company for the mobile-first and cloud-first world." The company may become leading one, it's time which will show us the result but for now there are people who will have to bear the impact. The cuts are expected to helping Microsoft in the competition with tech giants like Google and Apple.

This has impact on the stock price of the firm. Recently after the news, the stocks were up by 2%. While the world market is being hit by geopolitical unrest, the firms stocks are in increasing trend.

The firm is working to combine three operating systems into one single operating system. Nadella said "this means one operating system that covers all screen sizes." While windows is popular for making versions of the operating system, it's now a bold step for the firm.

Nadella is up with one team and a common architecture to combine Windows, Windows Phone and Xbox.
This could be one of the best step taken by the company to provide universal apps.


Here the analysis of the stock in Nasdaq.

Microsoft is making a history again, it's cutting up 18,000 jobs.This has impact on the stock price of the firm. Recently after the news, the stocks were up by 2%

European Market is upbeat, perhaps too upbeat while US financial markets are closely interconnected with European market, the impact is yet to be seen.

In April, the IMF had predicted that global output would grow by 3.6% in 2014 and 3.9% in 2015. 

At an event in the Robert Schuman Foundation in Paris, IMF head Christine Lagarde said that Europe continues to face important challenges concerning its long-term future and markets might be at risk of being too complacent. She said,"The good news is that the European economy is recovering from the crisis. Confidence is improving and financial markets are upbeat. Perhaps too upbeat."
She has warned that financial markets maybe a little too upbeat given the persistently high levels of unemployment and debt in European economies. She added that growth prospects in the region could be undermined due to continuing low inflation. Currently the inflation in  eurozone is 0.5%.

On the other hand, she was optimistic that European economy was recovering and until demand starts to rise, interest rates should remain low. European Central Bank prefers inflation close to 2%. Being optimistic she said,"Confidence is improving and financial markets are upbeat, perhaps a little too upbeat."

The European Central Bank cut its main interest rate to 0.15% last month. ECB chief Mario Draghi has since said interest rates will remain at their current level for an "extended period of time in view of the current outlook for inflation".

While ECB has become the first major central bank to introduce negative rates.It also cut its deposit rate - the rate it pays banks to keep money on deposit - to -0.1%

Confidence is improving and financial markets are upbeat, perhaps a little too upbeat.

Lagarde said,"Monetary policy should remain supportive until private demand has fully recovered" and the ECB "has achieved its price stability objective." She added,"There is a danger of a vicious cycle - persistently high unemployment and high debt-to-GDP ratios jeopardize investment and lower future growth."
"Global activity is picking up but the momentum could be less strong than we had expected because potential growth is weaker and investment ... remains subdued," she told.

She said,"Looking at emerging Asian countries, and in particular China, we are reassured because we do not see a brutal slowdown but rather a slight slowing of a growth that has become ... more sustainable and that we see at 7-7.5% this year."

In April, the IMF had predicted that global output would grow by 3.6% in 2014 and 3.9% in 2015. The information of IMF slashing US economic growth rate is there in the market. IMF slashes estimate for US economic growth in 2014, the annual review cut its growth forecast to 2%, citing a harsh winter, weak international demand for the country's products and problems in housing market.

After the financial crash of 2008, many nations across the globe have to restructure and re-balance their economies. While others were recovering substantial sovereign and bank debt led the euro zone to fall back into recession in 2011. In the summer of 2013, eurozone economy managed to expand again, but has failed to build on that with growth of just 0.2 percent in the last quarter compared to the previous period.

"More developed and diversified regional capital markets can support innovation, investment, and long-term growth," Lagarde said. "Deeper integration with world markets would improve productivity and plug countries into global supply chains."

World Markets affected by geopolitical unrest.

World markets plunged down on Friday after Malaysian Airlines Plane crash. The tension in Ukraine affected markets world wide. It has been said that the Flight MH17 was brought down by a surface-to-air missile over a region where Ukrainian government forces and  pro-Russian rebels are fighting.

As the news of crash spread, Japan's Nikkei tumbled by 1% and Germany's DAX fell 0.35%.


Russia and Germany has close trading ties, and it's been anticipated that Germany might lose more than most from a deepening crisis. After the crash, Moscow is going to experience pressure from the world to resolve the conflict between Russia and Ukraine. Such political unrest has affected markets around the world.

On the other hand, aviation stocks are falling in Malaysia, it fell by 0.4%. Four months earlier Flight MH370 disappeared, this is the second tragedy to hit the airline business this year.
After the attack, the most actively traded stock in Kuala Lumpur, Malaysia Airline fell by 11% while Malaysia Airport slide down nearly 5%.


While the tension spread and Russian stocks were also on the slide, extending Thursday's losses triggered by the announcement of new U.S. sanctions targeting leading Russian energy companies and banks on the other hand, the West is trying to pressure Moscow into ending its support for the rebels in Ukraine.


Investors were further thrilled when Israel sent ground troops into Gaza.

On Thursday, US stocks were also seen affected : the S&P 500 declined about 1.2%, the Nasdaq slid 1.4% and the Dow closed down almost 1%, the drop for the Dow was the biggest in two months, and the S&P's fall was the steepest in three months.

While stock markets were falling gold price was up 1.5% higher. The VIX index, which measured market volatility rose up by 36%.


While these events affected world market after the news, Wall Street bounced back Friday.

Political Unrest and shares prices in US

A Malaysia Airline Flight 17- a Boeing 777 crashed in Ukraine border near Russia, on Thursday. Israel began a ground invasion into the Gaza strip. This caused  decline in US shares. Investors have lost the confidence after these political unrest.

The S&P 500 plunged 23.45 points or 1.18%, to 1,958.12,
The Nasdaq index dropped 62.52 points or 1.41% to 4,363.45.

Closing back below the symbolic threshold of 17,000, the Dow Jones index fell 161.39 points, or 0.94%, to 6,976.81

Earlier in the day of new US and European Union sanctions on Russia, such new has made impact in US share market.
Such uncertainty and tension, along with the Israel's invasion into Gaza, investors are attracted to invest in assets like gold and US treasury bonds. Gold futures jumped $17.10, or 1.3%, to $1,316.90 an ounce on strong demand.