The Week Unpeeled
The Olympics took over the headlines last week and all weekend (more below), with opening ceremonies Friday and competition in full swing and, as all know now, Ryan Lochte knocking Michael Phelps out of the pool, and winning the gold in the 400 IM. A little surprise but exciting nonetheless. Another surprise close to home, at least from the markets standpoint (let’s bridge to message here) was Sandy Weill’s comments last week (the ultimate banking dealmaker) claiming amidst the Libor scandal that maybe commercial banking and investment banking should be separated. (But what about his banking grocery store Citigroup?) Sides are being formed.
- The e- and i-worlds did not fare well with Facebook disappointing with shrinking revenue (stock down now some 38 percent since its IPO); Amazon quarterly profit declining 96 percent; Zynga’s shares also hit hard, sliding 37% on Thursday; and Teflon Apple disappointing on results, with iPhone sales lower than expected and sales and earnings missing analysts’ estimates for only the second time in 39 quarters;
- US growth slowed in the second quarter, up just 1.5 percent;
- Nevertheless, the Dow rallied past 13,000 on expectations that the European Central Bank would work to "do whatever it takes” (ECB Chairman Mario Draghi) to save the region;
- Time Warner announced that CNN president Jim Walton will leaves at the end of the year as the cable network’s rating continue to slump
- The Office of National Statistics revealed the UK economy shrank 0.7 pct between April and June. The fall was worse than expected and means Britain has had negative growth for the past nine months;
- Barclays announced a better-than-expected performance in the first six months of 2012 with underlying first-half pre-tax profits rising 13 percent to £4.23bn;
- Spanish unemployment hit new highs as the country's unemployment rate rose to 24.6% during the April to June quarter, up from 24.4% during the previous quarter;
- Eight ex-News of the World employees, including former editors Andy Coulson and Rebekah Brooks, have been charged with conspiracy to hack the phones of 600 people;
- The 2012 Olympic Games kicked off in London on Friday night with an opening ceremony at the Olympic Stadium. Oscar winning director Danny Boyle had the responsibility of arranging the opening ceremony, which cost £27 million and was estimated to be watched by a worldwide audience of up to one billion people;
- Olympic organizers have already had to issue an apology to North Korean athletes whose images were shown next to the South Korean flag; and
- Bradley Wiggins became the first Briton to win the Tour de France.