European shares touched a 10-month high on Friday on optimism for a global economic recovery and with Nokia and results from U.S. bellwethers boosting the technology sector.

The FTSEurofirst 300 <.FTEU3> index of top European shares rose 1 percent to 978.34 points. Over the week, the index climbed 1.2 percent, its sixth weekly gain in the last seven weeks.

The European benchmark index is up more than 51 percent from its lifetime low of March 9, as investors have become more confident on the prospects of economic recovery.

“Things look good for the time being, but the higher we go the more we could be setting ourselves up for a disappointment,” said Andy Lynch, a fund manager at Schroders.

“The world economy is doing well, French and German GDP are positive, but that’s not surprising given the amount of stimulus being pumped into the market. I have a concern about what happens when the sugar

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Russia's budget deficit widened last month to the equivalent of 3.6% of gross domestic product, increasing by $4.5 billion in May.  Growth of bad bank loans is apparently slowing for the first time since the start of the crisis.  Reuters considers whether the recession will lead to reform.  Aeroflot may lose some of its annual $300 million overflight royalties if a new proposal to the Federal Anti-Monopoly Service is accepted.  In a new bill, Russian holdings may be allowed to protect their overseas assets in the event of bankruptcy.  Grain firm Rosinteragroservis has asked that the 56,000 tons of wheat held in Egypt for quality checks be returned to Russia so it can be sold to Indonesia.  Reports abound on the opening of HSBC's first retail bank in Russia, which hopes to target ...

Highlights include Credit Suisse Group AG (CS) and UBS AG (UBS).Today, Credit Suisse Group AG (CS) reported a surprisingly good first quarter, posting net earnings from continuing operations of CHF2.0 billion, well above the CHF2.1 billion loss in the prior-year quarter and our CHF297 million estimate.This result largely reflected a CHF6.7 billion positive swing in trading revenues to CHF4.9 billion from a CHF1.8 billion loss a year ago as UBS had significantly higher fixed income trading revenues, record revenues in global rates and foreign exchange, and strong results in US RMBS and high-grade trading. This was partially offset by negative revenues from businesses the company is exiting, including valuation reductions of CHF1.4 billion for CMBS.In total, companywide net revenues increased 170% to CHF8.1 billion from CHF3.0 billion in 2008's first quarter as the large increase in trading revenues was partly offset ...

One of the best-known Russian strategists is quitting the country after the backer of his Moscow-based hedge fund, Red Star Asset Management, pulled its mandate amid plummeting markets. James Fenkner, founder and managing director of Red Star, is moving to Santa Barbara, California after working in Russia for 14 years. Fenkner took the decision after Erste Bank, an Austrian retail bank with a network across central and eastern Europe, withdrew its support for Red Star. Erste did not respond to calls seeking comment. Fenkner said his relocation was mainly for family reasons. He said: "We believe that great fortunes will again be made in Russian shares, but one doesn't need necessarily to live 24/7 in Moscow to participate...Like most investors, I want to fly in for a few weeks a year with a better global perspective." Fenkner set up Red Star in ...

Yet another bank has announced that it plans to create an African footprint. First National Bank, South Africa’s third-largest retail bank, is planning to open subsidiaries in Tanzania, Angola, Uganda, Ghana and Zambia.

As the WSJ reported today, the collapse of Lehman Brothers and the sale of Merrill Lynch to Bank of America is just the latest chapter in a stunning redesign of the financial world.  Stand-alone investment banks are dying rapid deaths, with three down in 2008 already (who can forget the spectacular demise of Bear Stearns?).  In their place, a new king is rising - commercial banks.

The key difference between an investment bank and a commercial bank is the source of their cash flow.  A commercial bank like Bank of America or Wachovia takes consumer deposits, which are insured by the federal government to prevent depositors from pulling out all at once (a major catalyst of the Great Depression in the 1930s that is now prevented by tighter regulation and insurance).  Investment banks take no such deposits, and as a result benefit from lighter government

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Tough as it may be to make sense of the level of heat Wall Street is taking currently – as it seems the mortgage and credit crisis is now sounding five alarms – we sat down recently with Director of Zacks Equity Research Dirk van Dijk, CFA. He was able to offer a realistic perspective for us, even if he can’t sugar-coat all the bitterness from the pill.

Can you give us some perspective on the seismic shifts we’ve already seen in trading this week?

Lehman Brothers (LEH), a firm dating back to before the Civil War is gone, bankrupt, kaput. Merrill Lynch (MER) was pressured by the Fed to put it up for sale to Bank of America (BAC), but was able to negotiate an extremely generous price of $29 a share, a huge premium from the $17.05 price they closed at on Friday. ...

Two hurricanes hit America this weekend - one in Galveston and the other in lower Manhattan - both of which have caused billions of dollars in damage.  The financial landscape has been rearranged as much as the sandbars in the gulf have been.  Lehman Brothers (LEH), a firm dating back to before the Civil War is gone, bankrupt, kaput.  Merrill Lynch (MER) was pressured by the Fed to put it up for sale to Bank of America (BAC), but was able to negotiate an extremely generous price of $29 a share, a huge premium from the $17.05 price they closed at on Friday. 

While the strategic rationale for BAC to buy MER is pretty obvious - it weds the biggest retail bank to the biggest retail brokerage firm - what possessed BAC to pony up that sort of price is far from obvious.  They could have had

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Business New Europe Jason Corcoran in Moscow July 9, 2008A detsky sad, or kindergarten, is an unlikely neighbour for a Russian hedge fund, but James Fenkner is not fazed by a little background noise. The founder and chief investment officer of Red Star Asset Management runs a friendly and informal investment shop on an unassuming residential street situated between Moscow's boulevard and garden ring roads. Red Star's team of seven have their heads buried in work as two-dozen two-year-olds run about shrieking seven floors below. It's also a family affair - Fenkner's sister Elizabeth plays a key role as the head of marketing. The firm was set up in 2005 after Fenkner quit Troika Dialog where he had served seven years as head of research and initially as chief strategist. "The market was just ...