Global business
Russia's economy shrank by 4.6 percent in the second quarter compared with the same period last year, confirming that the country is in recession after contracting 2.2 percent in the first quarter. The rout in oil and other commodity prices and a fall in the ruble have battered Russia. Recent data showed that retail spending slumped by 9.4 percent in June, year-on-year.
Saudi Arabia issued government bonds worth $5 billion to domestic investors, in only its second sovereign-bond offering since 2007 (the first was in July). The bonds have a range of maturities between five and 10 years. More sales are in the works as the country seeks ways to cover the gap in public finances caused by the fall in oil prices.
The International Energy Agency raised its forecast for global oil demand this year by 200,000 barrels a day, to 94.2 million. But despite the extra demand, the glut in oil is expected to last into 2016, keeping oil prices subdued. The IEA nonetheless thinks that a "rebalancing has clearly begun" in markets and it expects America's soaring output, which has been a big factor in depressing the oil price, to decline next year. Its outlook does not include higher production from Iran if sanctions are lifted.
Warren Buffett struck the biggest deal of his career as Berkshire Hathaway, his investment company, agreed to buy Precision Castparts, a maker of components for the aerospace and industrial gas-turbine industries, for $37.2 billion. Some think Buffett is paying too high a price for Precision, but he is banking on a steady stream of revenue from supplying engine parts for new aircraft, for which there is strong demand.
General Electric sold its health care financing business to Capital One, a financial company best known for its credit cards, in a deal valued at $9 billion. GE is in the process of selling around $200 billion in financial-services assets to refocus on manufacturing.
In a boost to the Indian government's efforts to attract foreign investment, Foxconn, a Taiwanese manufacturer that assembles the iPhone and other consumer electronics at its factories in China, pledged to invest $5 billion in Maharashtra state to build new facilities there. For years India has been trying, and failing, to develop manufacturing on a similar scale to China. Foxconn has already begun a partnership with Xiaomi, a Chinese smartphone company, to assemble phones in India.
Alibaba's quarterly earnings disappointed investors. Profit was flat if a one-time gain from the sale of an asset is excluded. The Chinese e-commerce company's share price is down by 35 percent from its high last November, two months after it floated on the stock market in the world's biggest IPO. As a sop to investors, it has announced a $4 billion share buyback program.
Google is to turn itself into a conglomerate by creating a holding company called Alphabet, which will house all its businesses, including its various forays into driverless cars, wearable devices and other "moonshot" ventures.
Political economy
Greece struck an agreement with its creditors on reforms needed to unlock bailout funds and prevent it from defaulting. The agreement involves a new independent fund for privatizing government assets and other structural reforms. It clears the way for a new bailout, Greece's third, estimated at a total of €86 billion ($96 billion). Eurozone governments must now ratify the deal in order for Greece to receive funds needed to make a €3 billion payment to the European Central Bank.
Ukraine warned of an escalation of fighting with Russian-backed separatist rebels in its eastern regions. Ukraine's prime minister, Arseniy Yatsenyuk, accused the rebels of shelling Ukrainian positions, while Russia's foreign ministry blamed Ukraine for the escalation of violence. Some 200 Ukrainian soldiers have been killed since a cease fire was signed in Minsk in February.
Jihadists in Mali killed five hostages in an attack on a hotel used by the United Nations and foreign aid workers in the town of Sevare, which is much farther south than the area previously afflicted by jihadist violence. Five Malian soldiers and three attackers also died in the incident.
Islamic State claimed to have killed a Croatian hostage who was kidnapped in Cairo. The group released pictures purportedly showing his beheaded body. His kidnapping and murder mark a dangerous escalation of IS activity in Egypt.
Islamists in Bangladesh hacked to death another secularist blogger. Niloy Neel is the fourth writer to have been murdered by extremists in the country this year.
In Japan the first nuclear reactor restarted since the Fukushima disaster in March 2011 under a new safety regime. A power company reactivated one of its reactors at a nuclear plant in Kagoshima, on the southern island of Kyushu, and said its second reactor could open by October.
Australia proposed a cut to carbon-dioxide emissions of at least 26 percent by 2030 from 2005 levels, which is at the lower end of pledges made by developed countries ahead of a United Nations climate-change conference in December. Australia's emissions per person are among the highest in the developed world.
