BlackBerry Revenue Miss,shares plunged 5.6 percent to $9.51 at 9:54 a.m. New York time

BlackBerry Ltd. published fiscal third-quarter revenue that seems to slide well short of analysts’ estimates, fading the company’s praiseworthy achievement of generating cash earlier than promised. It's revenue dropped 34 percent to $793 million in the three months ended Nov. 29, that's a miss in analysts’ estimates for $931 million. BlackBerry shares plunged 5.6 percent to $9.51 at 9:54 a.m. New York time. Before this there was a drop of  9.6 percent for the biggest intraday drop since July.

Chief Executive Officer John Chen said that company's revenue in the quarter was “not satisfying” and that he needs another couple of quarters before sales will rise. “Now we’ll turn our attention to revenue,” he said.

As Chen's command and working style got it's way in the company, BlackBerry generated positive cash flow of $43 million, a quarter earlier than promised. It even posted an adjusted profit of 1 cent a share. Now. Chen's goals were to reach break-even cash flow by the end of this fiscal year and then return to sustainable profit and revenue growth next year.

An analyst with BGC partners in NY,Colin Gillis said while the stock is down today because of the revenue miss, it not necessary that company won't reach positive cash-flow.

Chen has focused on making software and providing security for governments and corporations and along with that the company is also introducing new phones that focus business users, like the Passport and the Classic, which was introduced on Wednesday. Chen said today that orders for the Classic are higher than orders were for the Passport at the start.

The Waterloo, Ontario-based company recognized revenue on about 2 million smartphones, down from 2.1 million in the second quarter. It was the first quarter that customers could buy the square-screened Passport, which debuted in September. The week the phone was introduced, Chen said the company had pre-sold 200,000 Passports.Chen said today that orders for the Classic are higher than orders were for the Passport at the start.

The company has a net loss of $148 million, or 28 cents a share. A year earlier it had a loss of $4.4 billion, or $8.37 a share. At the end of the quarter it has $3.1 billion in cash and equivalents.  Even thought analyst were expecting 5 cent a share loss, the company has earnings of 1 cent a share, excluding some items, the first adjusted profit in seven quarters.

With oil, Dow, Nasdaq and S&P are down.

Crude prices are lowest in more than five years. Now it's below $58 a barrel.

The Dow had a toughest weekly performance in more than three years. It faced a 3.8% loss with 3000 points this week.The S&P 500 also faced a tough week. It was down more than 3.5% for the week, biggest drop since May 2012.  The Nasdaq got a 2.7% drop.


All analysts  and investors are searching answer of:

is this a pullback of 10% from recent highs?

Even though market volatility has returned in the second half of the year, investors seem to be scared again. The market started to slide down from mid-September through mid-October before staging a sharp rebound. It fostered the Dow to hit a new all-time high just a week ago due to strong U.S. jobs report.

Still, many investors were predicting that the Dow would soon top 18,000 for the first time. And with the course of events, there was a sharp sell-off in oil and it changed everything. Crude prices are lowest in more than five years. Now it's below $58 a barrel. This initiated slide in energy stocks.
Not only oil other stocks also went down. Verizon (VZ, Tech30) fell 1% Friday and is now down 6% this week. Smaller telcos Windstream (WIN) and Frontier (FTR) were laggards in the S&P 500.

In a greater perspective, phenomenon of depletion on the oil price is spreading in other sector too. Yet, investors are still searching for silver lining in the market. 

Citigroup Sees Growth in Spain

Spain is one among the five biggest sources of income for Citigroup within Europe, the Middle East and Africa. It gets more of its revenue outside its home market in comparison to other U.S. lender. Citigroup Inc. (C) is expecting an increase in it's revenue in Spain by 5% to 10% in 2015. It is aware of fees from managing bond sales and share offerings to drive revenue in Spain.


According to the company's spokes person,“Large market capitalization companies always had access to capital markets, but medium-sized ones and companies with lower than investment grade rating needed access, and this has started to change in recent years.”

He added, “Equities will also have a good year in 2015, mainly through capital increases and accelerated equity offers.”

Chief Executive Officer Michael Corbat is working on plans to streamline the bank. The bank is leaving consumer banking in slow growth markets. It's the world's largest lender before the 2008 financial crisis. The bank is pulling out consumer banking from Spain including Japan, Egypt and Hungary. The bank sold all 45 branches, along with its credit card business in June.All together 950 people worked there. Those branches werr sold to Banco Popular Espanol SA (POP) for $296 million.Currently Citigroup now employs 260 people in Spain.

The bank expecting to build its business in Spain as the country recovers from a two-year recession and a sovereign debt crisis that led the government to seek aid from the European Union to recapitalize local lenders.

Country Officer William Van Dyke said,“The dynamics in the Spanish economy are better and we see an opportunity to strengthen and grow our balance sheet in the country.”

Spain is providing a 10-fold profit to Citigroup in comparison to 1990. It has $25 million in assets and increased revenue of 10% to 19% every year for the past seven years. It earned $75 million in fees from investment banking in the year through September in Spain. It has 5.6% market share and has to compete with Morgan Stanley.

The bank has client base of 60 companies. Citigroup arranged Spain's 10-year government bond issue in January and a five-year inflation linker in October.

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.

Alibaba's(BABA,Tech30) Rise after it's IPO

Alibaba's initial public offering on September 19 might just have been the top for the bull market-some expert decleared.Now, Stocks have jumped back to the show after solid earnings reports. The Dow & S&P 500 both hit all-time closing highs on Friday and Alibaba (BABA,Tech30) was leading the way.

Alibaba's(BABA,Tech30) stock raised 7% from its first day closing price and more than 20% above its post-IPO low point. There was a 3% price up on Monday. That was a new high. That Monday's rally made Alibaba worth more than Wal-Mart (WMT).

Alibaba worth more than Wal-Mart (WMT)

It's been always anticipated to be a part of bull market appreciation. Now, Alibaba has a chance to prove that valuation at the time of IPO are still valid and can be justified. The company will release its first earnings report since its IPO on Tuesday morning. Analysts are expecting high.

The estimation of about $970 million or 44 cents a share are being expected according to FactSet. It would be an increase of 20% in comparison to last year. There is estimation of 45% sales growth, $2.6 billion according to Wall Street. 

Stocks of Alibaba are doing well. It surged 38% on the first day of trading. The expectations are extremely high. Alibaba seems to be likely to beat earnings and revenue estimations. This will justify the stock price. Analysts will be specifically interested in knowing how strong Alibaba's mobile business is.

There is trading of shares at about 45 times earnings forecasts for the current fiscal year that ends in March.

Alibaba is given $110.32 consensus price target by Wall Street and it's been anticipated to go further more if report is strong. It has a market value of $250 billion, is also worth more than American online retail giants eBay (EBAY, Tech30) and Amazon (AMZN, Tech30).

There is  Alibaba-Amazon comparisons being made after Alibaba made decision to go public.

Microsoft ends retail sales of Windows 7 and 8

The next version of Windows, called Windows 10, is due to be released in late 2015.

The retail sales of Windows 7 and 8 has been officially stopped by Microsoft. Microsoft is taking this action to attract customers to more recent versions of it's product. The conclusion is made strong by statistics suggesting people are finally moving away from some very old versions of Windows. There  is anticipation of people adopting new version of Windows. The next version of Windows, called Windows 10, is due to be released in late 2015.

This decision might even affect the market share of the company. Even though the straight estimation of users adapting new version seems promising, there's still chance of decrease in over all sales and revenue collection till the operating period.

After Q1 report it railed up and now decision to stop sales of Windows 7 and 8 seems attractive.

Consumers are not able to purchase copies of the Home Basic, Home Premium and Ultimate versions of Windows 7 from 31 October. Windows 8 is also no longer available. Copies bought in shops or loaded on PCs and laptops are also affected by the change. All the PCs will have Windows 8.1 as default version. It's current version of windows.

There are many PC makers and they have large stocks of older versions of Windows. So, immediate change might not occur in the market. They will be selling PCs with older version of Windows. There's still a way if you want Windows 7. Users will be able to "downgrade" from 8.1 to Windows 7 Professional and very few PC firms have this option.

Microsoft is trying to distance itself from the original form of Windows 8 even though it is released just over two years ago. Windows 8's original version was not able to live up customers expectation as it lacked some familiar elemets of the desktop version of the operating system.

Windows 7 has been available since late 2009 and is still very popular among users. About 53% of Windows users are on the various editions of Version 7 of Windows. The more recently released Windows 8 has only grabbed a 6% market share and has already been surpassed by 8.1.

Data from Netmarketshare suggests that in October this year users using Windows XP dropped from almost 24% to just over 17%. It is not yet clear what was behind the fall.

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."

Morgan Stanley's total revenue for the quarter rose 12% to $8.91bn.

Morgan Stanley's total revenue for the quarter rose 12% to $8.91bn.

Morgan Stanley has reported an 87% jump in profits to $1.65bn (£1bn) in the three months to the end of September. Morgan Stanley is a US investment bank.Since it is a investment bank, it is different from other commercial banks. It handles trading of currencies, commodities and bonds was a big driver of profits, wealth management and even,advising high earners on their finances.

It's bond trading activities have reportedly benefited inspite of  obstacles at bond giant Pimco.

This September, Bill Gross,trading superstar  made a surprise exit from the world's biggest bond firm.
The departure of the superstar,Mr Gross from Pimco induces investors to withdraw billions of dolklars from the company and remaing could be used to learn other trading business.

Morgan Stanley's total revenue for the quarter rose 12% to $8.91bn.

19.4% to $997m were from bond trading and in addition to that wealth management revenue rose 9% to $3.79bn.

Similar to it, Goldman Sachs reported a 50% rise in profits.

As of September 30, 2014, the Firm’s Common Equity Tier 1 risk-based capital ratio was approximately 14.3% and its Tier 1 risk-based capital ratio was approximately 16.1%. The Firm is subject to a “capital floor” such that these regulatory capital ratios currently reflect the U.S. Basel III Advanced Approaches (“Advanced Approach”) transitional rules, which represent the lower of the Firm’s capital ratios calculated under the Advanced Approach and U.S. Basel I and Basel 2.5 capital rules, taking into consideration applicable transitional provisions under U.S. Basel III.1

Compensation expense of $4.2 billion increased from $4.0 billion a year ago primarily driven by higher revenues. Non-compensation expenses of $2.4 billion decreased from $2.6 billion a year ago primarily reflecting lower litigation costs.

Chairman  James Gorman said,"We are well positioned to create superior returns for our shareholders, particularly as the US economy continues to strengthen."

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.

Warren Buffett-Selling 245 million Tesco shares

245 million shares of Tesco is sold by Berkshire Hathaway investment company.

245 million shares of Tesco is sold by Berkshire Hathaway investment company. Berkshire's holding is below 3% after the sale.Berkshire Hathaway firm owned a 3.7% stake in Tesco at the end of 2013, a stake worth about £1bn. Berkshire Hathaway is Warren Buffett's investment company. He is also known as the "the Sage of Omaha."

Earlier this month he told on CNBC,"I made a mistake on Tesco. That was a huge mistake by me."

The supermarket's sales are declining and in addition to that share price has fallen to an 11-year low this year.The supermarket's share price has plunged more than 50% over the last 52 weeks after falling sales and there was unrest among investors because of  accounts mis-reporting.

Similar to Berkshire Hathaway, Blackrock, also began selling down its 5% Tesco stake in September.

Mr Buffett is known for making most likely estimation about established companies rather than investing in riskier stocks.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.

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.

CSX-Union Pacific stock trading, which one will outperform other?

CSX has risen 16 percent since March 23,2011

New investors are attracted to CSX as CSX’s coal shipments show signs of stabilizing.The number of coal carloads CSX transports was up 3 percent for the week ended Oct. 4 from same period a year ago after years of contraction.

Since March 23, 2011,CSX has risen 16 percent, compared to Union Pacific’s 119 percent gain. Even though the  stock-price ratio is close to the lowest since 1981, it’s up 0.8 percentage points this month, the biggest increase in a month. The point is whether investors will start putting more capital into this trade now that it’s at a multidecade low.

“Fewer coal-related headwinds have been the overarching driver”said Ben Hartford, an analyst with Robert W. Baird & Co. in Milwaukee.

Based on Jacksonville, Florida,CSX is generating 24 percent of total 2013 revenue transporting coal and is more dependent on this commodity while Nebraska-based Union Pacific generates 19 percent.
CSX stock lagged behind Union Pacific because of declining the price of natural gas which made it cheaper alternative for utilities.

Union Pacific hauls primarily Powder River Basin type coal, which is cheaper than CSX’s Appalachian variety, so it's volumes declined less.

 CSX stock could “narrow the gap” with Union Pacific as coal becomes a “less significant headwind” for CSX, Hartford said.

Jim Stellakis, founder and director of research at Technical Alpha Inc. in Greenwich, Connecticut, said that the pair-trade ratio could “move sideways” for a few months before there’s a clear sign that a possible downtrend in place since 2011 has broken. If ratio goes up overcoming a recent high in January 2014 -- “that’s a good sign there’s a switch under way, as investors are starting to see more value in CSX relative to Union Pacific.”

Investors like Timothy Ghriskey, chief investment officer at Solaris Asset Management LLC in New York, does not follow the bet because his company currently hols Union Pacific. CSX has been plagued by congestion on its East Coast rail network, Ghriskey said. The company increased hiring and capital spending to alleviate this. Also that it relies more on the export market for coal, specifically China, where demand has been weak.
Still, the performance gap between these two stocks could reverse, as it has in the past, said Hartford, who maintains a neutral recommendation on Union Pacific and an outperform on CSX.

Driven largely by it's higher margin, CSX outpaced Union Pacific, between 2002 and 2008.
CSX is scheduled to report third-quarter results Oct. 14, followed by Union Pacific on Oct. 23. The implied one-day stock-price move after the announcement is about 3.5 percent for CSX.
Ghriskey said “pair trade is certainly something to watch,” even for investors with a position in only one of these stocks,

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."

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.

$7billion settlement by Citigroup, Investors seem to be happy with that decision because stock price rose.(3.02%)

The Citigroup fines are said to have surprised stock analysts and people inside the bank, who had hoped to settle for less.Citigroup will pay $7 billion to settle an investigation into risky subprime mortgages, the type that helped fuel the financial crisis. Following the decision for consumer relief, the bank reported a stronger than predicted quarterly profit, and saw its share price rise by 3.02% to $48.42 (£28.34).


Citigroup's chief executive, Michael L Corbat, said,"We believe that this settlement is in the best interests of our shareholders, and allows us to move forward and to focus on the future, not the past." Investors seem to be happy with that decision because stock price rose.

The bank offered to pay less than $4billion to resolve the  investigation. In reaction to it the justice department warned last month that it would sue the bank for offering less than what government was seeking.

The bank will take a pre-tax charge of about $3.8 billion because of the settlement during its second quarter.

Citigroup said Monday that its net income dropped in the second quarter after the settlement was arranged. That charge pushed down Citigroup's net income to $181 million from $4.18 billion a year earlier.On a per-share basis, net income was 3 cents, compared with $1.34 in the second-quarter a year earlier. Excluding the charges and an accounting gain, the bank's second-quarter profit rose 1 percent to $3.93 billion, or $1.24 a share.

The bank earned $3.89 billion, or $1.25 per share, a year earlier. Revenue was $19.4 billion, excluding the accounting gain, compared with $20 billion a year earlier.

Adeal between the Justice Department and JPMorgan Chase & Co., the nation's biggest bank was similar to this settlement, but it's much larger than this.After months of negotiations, the bank last year agreed to pay $13 billion after an investigation into toxic mortgage-backed securities..

Portugal is trying to dimish fear over Banco Espirito Santo

Portugal's Largest bank is trying to ease it's investors and saver.

Banco Espirito Santo is trying to calm down the investors that the bank is not in need of extra funds.
It has said that it has sufficient finances to deal with its parent company's debt problems.
On Thursday, the banks's financial strength hit the stock market. On the other hand, Portugal's central bank said investors and saver should not be worried about the bank's financial situation.


What's the impact?
Banco Espirito Santo (BES) and Espirito Santo Financial Group- which holds a 25% stake in BES - both's shares fell sharply on worries about the financial health of the Espirito Santo group. BES shres were even suspended for regulation in Lisbon stock market. It closed at  0.4810 euros in Lisbon.
In order to remove this fear and recover from the loss the group is releasing a restructuring plan of Espirito Santo Group.
It even said,"BES Executive Committee believes that the potential losses resulting from the exposure to Espírito Santo Group do not compromise the compliance with the regulatory capital requirements."

Mr Pedro Passos Coelho, Portugal's Priminister said: "There is no reason for the state to intervene in a bank which has solid capital and which has a comfortable margin to deal with any eventuality, even the most adverse".

These events initiated a chain reaction in Europe and US about the perception of European banks. The bank's trouble is expected to affect Portugal seriously since it's last bailout. In the harsh condition of the financial crisis, Portugal took a 78bn euro ($106bn; £62bn) bailout from its European partners and the International Monetary Fund. The government's burrowing costs reached 3.5% in April which was eight-year low but the country's financial sector's condition are pushing it back up.

Even though strategists are not sure about the outbreak of the crisis to other countries and how will the bank do in future, there's still no certainty that the market is going to take it normal.