Business this week

A tentative calm returned to the markets after a bout of volatility sparked by fears about the world economy. The S&P 500 share index notched up its best daily performance in a year and the yield on Greek ten-year government bonds fell towards 7%, having soared to almost 9%. Oil prices climbed. The cautious optimism was induced in part by reports that the European Central Bank is thinking about buying corporate bonds on the secondary market early next year as part of a strategy to steer the euro zone away from its deflationary path. See article

The new normal

China’s economy grew by 7.3% in the third quarter, the worst showing since the depths of the global financial crisis in early 2009. Hampered by rising debt, overcapacity in its industries and a stumbling property market (house sales were down 11% in the first nine months of the year) China’s slowing economy is likely to miss its GDP growth target of 7.5% this year. See article

South Africa slashed its GDP growth estimate for 2014 to 1.4%, from the 2.7% that was forecast back in February. Among other things the economy has taken a hit from a lengthy mining strike that was resolved in June.

Richard Broadbent stepped down as chairman of Tesco. The world’s third-biggest supermarket retailer restated its earnings in light of the errors in accounting for income from suppliers, drastically marking down its six-month pre-tax profit to August 23rd. It also revealed that most of its overstated profit relates to previous accounting periods. See article

Strong demand for Apple’s iPhone 6 helped push the company’s profit up by 13% in the latest quarter, to $8.5 billion, compared with the same period last year. It also shipped 5.5m Mac computers (more than in any quarter since Apple started selling the Mac in 1984), though iPad sales sagged again. This week Apple Pay was rolled out, which lets iPhone 6 users pay for goods in shops through an app that identifies thumbprints. See article

Meanwhile, Tim Cook, Apple’s boss, flew to Beijing to press for official help in halting cyber-attacks. Apple’s cloud services suffered a bad one in China, reportedly by Chinese state-sponsored hackers trying to obtain personal user data.

A tech titan’s struggles

Apple’s earnings may have delighted investors, but IBM’s left them disappointed, with revenue declining for the ninth quarter in a row. Big Blue is struggling more than its rivals to adapt to the rise of cloud computing. Its chipmaking business has become such a burden that it is paying GlobalFoundries, a contract chipmaker, $1.5 billion to take it off its hands. See article

Nokia reported its first year-on-year rise in quarterly revenue in three years. The Finnish company sold its struggling mobile-phone business to Microsoft last year and now focuses on telecom networks. It has won some big contracts, including a deal with China Mobile to deliver 4G services. Its share price has risen by 120% on the Helsinki exchange since the start of 2013.

Christophe de Margerie, the chief executive of Total, was killed after his private plane struck a snow plough at Moscow’s Vnukovo airport. The driver of the snow plough was allegedly drunk. Mr de Margerie’s death shocked the business world and brought tributes from politicians in his native France. Known for bringing a human touch to the oil business, he was not afraid of being outspoken and had been in Moscow to argue for continued engagement with Russia in spite of Western sanctions, which he recently derided as “useless”.

AbbVie lashed out at America’s Treasury Department, all but blaming it for scuppering its proposed $55 billion offer for Shire. AbbVie would have relocated some operations to Britain to benefit from a lower corporate-tax rate, but the Treasury frowns upon tax-inversion deals and issued new rules in September to curb those types of acquisitions. In a statement that officially terminated its offer for Shire, AbbVie said the Treasury had “reinterpreted long-standing tax principles” and caused it to reconsider the transaction.

Stale meat

McDonald’s said it would “fundamentally change the way we approach our business” after another drop in quarterly sales and income. Fast-food rivals are eating into its profit by offering fresher menus. Chipotle Mexican Grill saw its revenue increase by 31% in the third quarter and net profit jump by 57%.

America’s traffic-safety administration expanded a recall for cars fitted with air bags made by Takata, a Japanese company, because of the potential for the bags to explode, even in minor crashes, propelling shrapnel into the car. The advice urged motorists “to take immediate action”.