Results from the world’s leading automakers on July 29 painted a depressing short-term picture for the struggling industry. But signs that a recovery is near are bubbling to the surface. Honda Motor — Japan’s second-biggest carmaker — recorded an 88% annual fall in operating profit to $267 million as demand slumped. The figure, though, beat analysts’ expectations, while the company lifted its forecast for the full year due to an improving outlook for its global car sales.

On the same day, Nissan – Japan’s No. 3 automaker — posted a third straight quarterly loss $175 million. The company said global recession cut demand for new vehicles and a stronger yen hurt earnings from exports. France’s PSA Peugeot Citroen — Europe’s second-largest carmaker — also reported a loss on July 29, but surprised investors after the firm generated cash by slashing production and reducing inventory amid the global auto slump.

Source: Reuters, Bloomberg

Microsoft & Yahoo to Join Forces

Internet giants Microsoft and Yahoo are on the verge of sealing an online alliance that could create a more formidable rival to Google in the Web search business. A successful completion of the talks would mark an end to Microsoft’s 18-month pursuit of Yahoo, which began with an unsolicited full takeover bid that rocked the internet world. According to reports, Yahoo will scrap its own efforts to best Google in search and rely on Microsoft’s recently debuted Bing search engine.

Source: Financial Times, BusinessWeek

Apple Reject Google’s Apps

Apple has turned down two applications Google submitted for review in hopes they would be added to the company’s App Store. The rejections highlight the increasingly complex relationship between the two companies as both move increasingly into each others’ business territory.

Source: New York Times

American Airlines’ Alliance with BA, Iberia Approved by October

American Airlines expects to win U.S. approval by October for its alliance with British Airways and Spain’s Iberia, according to Craig Kreeger, American Airlines’ senior vice president. Kreeger added the carrier is pinning its hopes on intra-alliance competition and global partnerships to help it survive the current downturn.

Source: Reuters

Sino-American Summit Fails to Make Break-Through

The U.S. and China tried to present a common front on economic co-operation, but remain at odds over climate change after two days of top-level consultations, which showcased Beijing’s growing confidence and assertiveness. Though U.S. President Barack Obama said he would visit China later this year, the summit failed to produce any extensive new agreements.

Source: Financial Times

EU Slaps Penalties on Chinese Steel

European Union trade officials have approved pre-emptive penalties on steel pipe imports from China, a precedent-setting move that suggests Europe is growing more protectionist in the face of the economic downturn. EU policymakers accepted the argument from steel producers — including the world’s largest by volume, ArcelorMittal — that punitive tariffs are needed to protect them from the threat of underpriced imports from China.

Source: Wall Street Journal

ArcelorMittal Posts Third Quarterly Loss

ArcelorMittal, the world’s largest steelmaker, posted a third consecutive quarterly loss on July 29 and said it plans to restart some shuttered output as demand recovers. The second-quarter net loss was $792 million. The loss, which included $1.2 billion of inventory writedowns and provisions for job cuts, missed analysts’ forecasts.

Source: Bloomberg

Chinese Construction Stocks Boom

Shares in China’s largest home builder soared during their trading debut in Shanghai on July 29, demonstrating domestic investors’ huge appetite for new listings. China State Construction Engineering, whose $7.3 billion initial public offering last week was the world’s biggest this year, jumped 90% to an intraday high. The movement has fueled concerns pent-up demand may be feeding an unsustainable bubble in asset prices.

Source: New York Times

Tamasek Loses Almost $30 Billion in Value

Singaporean sovereign wealth fund Temasek said on July 29 it had lost more than $27.7 billion in asset value and may allow public investment for the first time in its history. Tamasek will seek “sophisticated co-investors” and won’t sell the “family jewels” for short-term gains, according to Chief Executive Officer Ho Ching, the wife of Singapore’s Prime Minister Lee Hsien Loong.

Source: Bloomberg

Ticketmaster-Live Nation Merger: ‘Serious Competition Concerns’

U.S. Democratic Senator Herb Kohl — chairman of the Senate Judiciary Committee’s antitrust subcommittee — has urged more scrutiny over a proposed merger between concert ticketing giant Ticketmaster and concert producer Live Nation, saying it presented “serious competition concerns.” Kohl has sent a letter to the U.S. Department of Justice to raise a number of issues over the proposed merger.

Source: Washington Post

M&A Activity to Remain Weak

Recent news from IBM, Amazon, and others suggests M&A deals are being made, but conditions are still far from normal in the world of mergers and acquisitions. M&A specialists warn improvement in the M&A environment could be very slow — much slower than during a typical recovery.

Source: BusinessWeek