Factory orders fell slightly in May, slumping 0.5% after a 0.7% increase in April. Unfortunately, this doesn't corroborate the view many investors developed yesterday -- that the U.S. economy is in firm recovery mode -- a view developed after impressive auto sales and strong numbers from the manufacturing sector sent the stock market soaring. Wednesday's gains were more muted, as the Dow Jones Industrial Average added 20 points, or 0.1%, to close at 16,976. Though blue chips ended just shy of the 17,000 level, the index finished at a record closing level nonetheless.

One of the stocks helping the Dow to its record close was Wal-Mart , which tacked on 0.5% by the ring of the closing bell on Wednesday. Wal-Mart might not be the most explosive or exciting stock you've ever heard of (at least I sincerely hope it isn't), but it's a solid investment option for conservative investors. If you become physically ill at the prospect of risk, stay inside, eat healthily, and consider buying some Treasuries. If you merely dislike risk but realize it's a prerequisite for any type of meaningful return, Wal-Mart's not a bad stock to consider. Trading at just 15 times earnings and dishing out a reliable 2.5% annual dividend, you can own a small piece of one of the largest public companies in the world. The day people stop needing clothing, groceries, electronics, furniture, and $4 DVD bins, you can start worrying. However, you'll probably be more concerned with the zombie apocalypse or alien invasion at that point in time.

King Digital Entertainment , next to the remarkable post-IPO performance of GoPro, has been one of the stock market's hottest performers in the last week. Stringing on a fifth straight day of gains, shares of the Candy Crush Saga game developer jumped 6.3% on Wednesday, as the stock came to rest more than 33% above its price just one week ago. Unusually bullish options activity last Friday began the rally in earnest, as Wall Street took notice and bid the stock 5% higher. Those oddly prescient investors were immediately rewarded on Monday, when King Digital posted the best-performing day in its history as a public company, roaring 15% higher on a JPMorgan analyst applauded the company, citing upcoming game launches and the possibility of share buybacks or a dividend being issued in the coming year.

American Airlines doing what it does best. Source: American Airlines

While Wal-Mart was up incrementally and King Digital posted massive gains today, shares of American Airlines didn't even approach breakeven levels, shedding 4.4% on Wednesday. Stocks in the airline industry -- because they are relatively few in number and because airlines boast a business model that's evaded disruption for about a century -- are often highly correlated to one another. Today was no different: Delta Air Lines reported disappointing international travel business in June, sending shares of American Airlines and other global providers skidding as investors braced for similar results. The World Cup is partly to blame for decreased business travel in Latin America last month, as the region turns its eyes to Brazil to root against Belgium -- I mean, to cheer on their home countries.

Tesla shares sold off today by more than 4%. While the stock was certainly due for a pullback after it gained about 18% in the past two weeks, its likely a story citing a decline in Norway Model S deliveries that sparked the sell-off today. But is the report really a reason to fret?

Tesla Fremont factory. Image source: Tesla Motors.

Deliveries do not indicate demand
A Seeking Alpha article by Palos Santos made some bold claims about Tesla's demand today. But the reasoning is flawed.

The headline: "Tesla's Norway Deliveries Drop 47% in the Quarter." Santos' fact on Norway deliveries appears to be correct. Model S deliveries, based on Norway vehicle sales records, are down significantly on a sequential basis. But this offers no insight into the Tesla's potential the rest of the year as Santos' asserts it does.

According to Santos, Tesla may not have the demand to ramp up and meet its ambitious stated goals of delivering about 20,000 vehicles in the second half of the year (about 5,000 more than the company guided for in the first half), since some regions appear to have demand that has peaked.

The U.S. has gone flat, and Europe has gone flat or worse with Norway's drop. China is being fed this quarter. How is Tesla going to produce massive growth in H2 2014? It doesn't seem likely.

The problem with Santos' reasoning is that there is no way investors can know whether or not any region has "gone flat" at this point. As a supply constrained company that spends zero dollars on advertising, offers no promotions, and has no plans to begin spending any money on advertising, the company ships every vehicle it can, every quarter. So, to look at Norway shipments, where the majority of European deliveries likely took place last quarter, and conclude that Europe has "gone flat" (or that demand has peaked) simply doesn't make sense.

The only way investors can gauge demand at this point is to look at orders, not deliveries.

Further, to assert anything about demand based on deliveries at this point is especially odd given Tesla CEO Elon Musk's comments during the first quarter earnings call: 

Very often, in the media, it seems like there's confusion between Tesla production and Tesla demand. For example, like we're sold of Q2 production, already. The term sales usually means demand, but in our case sales means deliveries.

But here is what we do know about demand (or at least those who listen to Tesla's conference calls): Demand has not flattened in North America "We're seeing steadily increasing demand in North America," Tesla CEO Elon Musk said during the call. And in Tesla's first quarter letter to shareholders the company was even more specific: "North American net orders grew sequentially by more than 10% in the quarter."

Tesla store. Image source: Tesla Motors.

Investors would be best off ignoring any reports that are not coming directly from Tesla about demand flattening out in any region. As a supply constrained company, there are far too many factors that go into Tesla's timing and location of deliveries to use the metric to make conclusions about whether demand has peaked or not in a particular region.

But here is a worthwhile question: Can Tesla ramp up production enough in the second half of 2014 to meet its delivery goals? Unfortunately, investors won't have an answer to this question until Tesla offers guidance for Q3 when it shares its Q2 results.

Stocks managed to press further into record territory on Wednesday, albeit with far smaller gains than they managed in yesterday's session. The U.S. economy appears to be improving on the employment front, but some questionable figures on factory orders left things a bit ambiguous for investors, who erred on the side of caution in advance of tomorrow's important unemployment-rate and nonfarm payroll numbers.

Despite modest gains for stock markets broadly, Molycorp , Delta Air Lines , and GoPro fell back sharply today.

Source: Molycorp.

Molycorp dropped 9% as negative comments about the state of the rare-earth metals market continued to drag shares of the mining company downward Wednesday. Prices for rare earths have plunged in recent years, greatly reducing the potential in what many investors once saw as a lucrative opportunity to cash in on demand for the metals used in mobile devices, electric-car batteries, and other high-demand items. A number of analysts have also pointed out that with Molycorp's cash balance on the decline, the possibility that Molycorp could have to do secondary stock offerings in the future to raise capital is weighing further on the share price. Absent an unexpected recovery in rare-earth metals prices, Molycorp will have difficulty recovering the ground it's lost over the past several years.

Delta Air Lines fell 5% as the airline warned that it is seeing excess capacity in its international routes, forcing the company to reduce its fares more than most shareholders had expected. In part, Delta blamed the World Cup for the drop in demand to Latin America, as business travelers postponed trips until the end of the global soccer championship. Even though Delta's domestic performance remains strong, investors have bid up Delta stock far enough that they want to see continued growth from all parts of the business. With greater competition on international routes, Delta doesn't have the same leverage it has domestically to keep a tighter grip on profit margins by pricing fares appropriately.

GoPro plummeted 14%, continuing its topsy-turvy trading activity since going public just a week ago. After a huge jump in its opening days, reports of heavy short-selling activity convinced investors that at least some market participants believe that the stock had gotten ahead of itself. Nevertheless, even after today's drop, the stock is still up 75% from its offering price last week. Moreover, the real test for GoPro will be if it can successfully monetize content that its customers choose to make available on its planned content distribution channels. With success on that front, GoPro could justify its recent performance.

J.C. Penney just can't help picking at a scab. The company announced yesterday that it would appeal a New York Supreme Court justice's recent ruling that Penney's selling of Martha Stewart home goods violated an exclusive contract Macy's had with the domestic diva's company.

Two weeks ago I argued that the department store needed to put this case to bed and accept that former CEO Ron Johnson demonstrated poor judgment in signing on Martha Stewart Living Omnimedia to sell identical goods that were covered by the Macy's contract. After all, the retailer has all but admitted it was wrong.

After Macy's sued its retail rival and MSLO for tortious interference, Penney unbranded Stewart's goods, marketing them under its own "JCP Everyday" label instead; gave back the 11 million shares it had received in her company; and relinquished its two seats on Martha Stewart Living's board of directors. For all intents and purposes it was breaking with that bad decision, despite Johnson's contention that he believed MSLO had found a "loophole" in the contract.

Because Martha Stewart Living reportedly wanted to operate a flagship store of its own, Macy's contract allowed an exception for the creation of an MSLO store as long as it was "owned or operated" by the doyenne of domesticity. Since Penney would be establishing a store-in-store boutique for the goods, it was argued that that was a sufficient parsing of the exception to allow Penney to bring MSLO on board. That MSLO and Macy's ended up settling suggests the loophole wasn't as big as originally thought.

Justice Jeffrey Oing's conclusion that Penney had violated Macy's contract, despite having given the two sides ample time to reach an out-of-court settlement, isn't so surprising.

Yet even his decision against Penney wasn't wholly terrible, as the judge denied Macy's request for punitive damages. While Oing said a judicial hearing officer or special referee will determine the amount of damages and attorneys' fees to be assessed, he mocked Penney's raid as childish in nature rather than "wanton, reckless, malicious [or immoral]."" Sheer embarrassment at having been brought to the brink of financial ruin is penalty enough.

Penney should have just let sleeping dogs lie, as its appeal to the court's ruling on damages led Macy's to declare it would appeal the court's denial of punitive damages. Such damages could be high enough to bankrupt the retailer. That has been a concern -- the judge even stopped Johnson from answering a question about that possibility while giving testimony in the case -- and though Penney is somewhat more financially stable than during its downward spiral, it's not so safe that punitive damages wouldn't push it back over the edge.

J.C. Penney obviously realized the risk involved in signing up Martha Stewart Living, and ought to have taken its lumps. Now that it's chosen to stir up the hornets' nest again, investors may be the ones who get stung.

Restaurant signs for Chipotle's new Pizzeria Locale and ShopHouse. Source: Twitter/@PizzeriaLocale, Twitter/@ShopHouseTweets.

Chipotle Mexican Grill's 21-year track record can only be described as a runaway restaurant success story. But by now that's old news to investors. Along with diners, they're salivating over the next two entrees currently cooking in Chipotle's kitchen: the Asian-influenced chain, ShopHouse, and the Neapolitan pizza joint, Pizzeria Locale.

With regard to these budding concepts, Chipotle's co-CEOs Steven Ells and Monty Moran have generally played their cards close to the vest. But they recently spoke more openly about their ambitious plans for Chipotle's offspring. Here's a rundown of what investors need to understand about ShopHouse and Pizzeria Locale today.

Where did the ideas come from?
With ShopHouse, co-CEO and founder Ells had an inkling that he could create a spinoff concept that resembled Chipotle but with a different cuisine. Still, he needed a nudge to push Chipotle outside of the world of burritos. That's where Chipotle's director of concept development, Tim Wildin, came in. Wildin was aware of Ells' love for Thai food, so he arranged for a culinary-inspired trip to Asia for Ells and a few others to taste some of the authentic ethnic cuisines. It was there that the idea of ShopHouse was born. According to Wildin, "None of this was driven by market research or customers. Nothing... It would be totally different and it probably wouldn't be successful. This was driven by a love of really good food." ShopHouse launched in Washington, D.C., in 2011.

For Pizzeria Locale, Ells crossed paths with two old friends and successful restaurant entrepreneurs, Lachlan Mackinnon-Patterson and Bobby Stuckey, who were looking to expand their Boulder, Colorado-based pizza joint. Ells suggested they take a page out of Chipotle's book and lower the prices while ditching the table service for an assembly-line counter. Then, he offered to invest in it to take it to the next level. The tag team kept their fast-casual pizza dreams a secret from 2012 to December 2013, when The Wall Street Journal broke the story.

What's on the menu?
ShopHouse serves Asian-inspired cuisine in bowls and Pizzeria Locale serves traditional personal pizzas. Both outlets allow customers to customize according to their tastes. As with the Mexican restaurants, it's all about fresh, responsibly sourced ingredients, time-honored cooking techniques, tons of prep work, and then incredibly speedy turnaround time in the restaurants.

Ells shed light on how they stand out from the pack at a recent conference:

At ShopHouse: "I would say the difference between ... typical fast food Asian that we think of in the United States and ShopHouse is extraordinary. The flavors here at ShopHouse are bold and bright, a lot of emphasis on vegetables, real meats, roasted meatballs, a beautiful braised tofu and then finish it off with our green papaya salad, or pickled vegetables, fresh herb topping."

Source: Flickr/Ted Eytan.

At Pizzeria Locale:

It's a different approach starting with the dough, it's a long fermentation, a long rise, a 24 hour rise, and it's done right in sight of the customers, the first thing the customer sees, beautiful ingredients, we use the same Niman Ranch Pork, the same rBGH-free dairy, the food with integrity emphasis is there and customers are going to the service line in exactly the same way that they do at Chipotle.

The pizza takes two minutes to bake and when they finish assembling their pizza, it goes right into the oven, the customer then continues down the line and might get some prosciutto, sliced prosciutto on our cheese slicer, some meatballs, that can make a salad, there is a variety of different salads and wines and then by the time they are at the register, and finish paying, their pizza is ready. So it's a really new way to think about pizza and people are very, very excited about it.

Source: YouTube/Pizzeria Locale.

How many stores have opened? Where are they?
ShopHouse: Six in Washington, D.C., and Los Angeles combined; the company plans to have 10 to 12 open in these cities by the end of 2014.

Pizzeria Locale: One in Denver; a second is under construction and a site location is being identified for the third.

How does that compare to Chipotle's overall store count?
Chipotle's total restaurant count stands at 1,637. So, ShopHouse and Pizzeria Locale make up a paltry 0.43% of stores currently.

How is the expansion process going?
The answer to this question depends on the yardstick you measure against. Chipotle has carried out a methodical, test-and-learn strategy at ShopHouse, for example, in Washington, D.C., which included a full two-year trial period starting in 2011. Only in the past year has Chipotle started to scale the concept to Los Angeles.

With that in mind, the rollout at ShopHouse has been slow and steady, but Chipotle believes the infrastructure is in place to gradually expedite that process now that it's finalizing the menu items.

There's no reason to question that logic. These concepts vary from its existing Mexican restaurants in only one real way: the food tastes different. That's it.

Source: Flickr/the food-e.

According to leadership, everything from real estate to investment costs to employee count to menu pricing is quite similar across all three chains. For managers of individual restaurants, it's almost like "plug-and-play" since the process of serving food is so similar across the board. That's the strategy, at least, and it's one that Ells believes will also set its restaurants apart from the also-rans:

It's much different than the kinds of growth strategies you hear about from all of our competitors who talk about, oh, we're going to open up 100 restaurants or 500 restaurants...You hear these sorts of things. To me, that's not a strategy.

What are the prices like? And how are the reviews?
ShopHouse: In D.C., according to reviews on , a bowl with protein, rice or noodles, and veggies priced out at $7 to $10 depending on the customer's selections. With 452 reviews to date, ShopHouse has an average rating of 3.5 stars.

Pizzeria Locale: According to reviews of the Denver location on Yelp, pizzas range from $7 to $11 depending on the ingredients chosen and time of day. Of 114 reviews, Pizzeria Locale garnered a 4-star average.

Can either concept make as much money as a Chipotle restaurant?
In the long run, management believes profitability could mirror Chipotle's. Here's what Ells had to say about the economics at another recent conference:

The economic model for both Pizzeria Locale and ShopHouse was built to be the same as Chipotle. So the potential for the economic models are the same. The one variable, though, is the sales. These are two new brands that are just starting, so obviously you don't have the same kinds of sales that Chipotle has. ... I think the huge potential here is to leverage our field structures so that the field managers can run all three different brands. And they're doing that now in Los Angeles and in Washington, D.C.

For perspective, Chipotle's net profit margin currently hovers around 10% and its three-year average return on invested capital is an impressive 24%.

Will they franchise either restaurant concept? 
No. Chipotle owns all of its Mexican restaurants and intends to follow the same expansion formula with ShopHouse and Pizzeria Locale. Currently, Chipotle is an equity partner in Pizzeria Locale with restaurateurs Mackinnon-Patterson and Stuckey. Their contract gives Chipotle the option to become the majority shareholder as the restaurant chain grows.

What does a ShopHouse or Pizzeria Locale experience look like?
If you've yet to visit D.C., Los Angeles, or Denver to give either concept a try, take a look for yourself in the following videos:

The Motley Fool visits ShopHouse in 2012:

From the restaurant's website: the Pizzeria Locale experience.

On Wednesday, stocks extended their gains from yesterday's big jump, as investors remained enthusiastic about the prospects for strong returns in the second half of 2014 despite the current lofty levels on the most popular market benchmarks. Given that the Dow and S&P 500 once again hit new record levels today, it's no surprise that hundreds of stocks in the market are setting new highs at current levels. Nevertheless, some of those stocks performed more remarkably than others, and Stillwater Mining , Constellation Brands , and Gilead Sciences were among the more noteworthy of the company's reaching their best levels in a year or more on Wednesday.

Source: Stillwater Mining.

Stillwater Mining climbed 2.5% as investors continue to benefit from improving conditions in the platinum and palladium markets. Yesterday's positive news from the auto industry on June sales helped push platinum-group metals prices higher, with automakers needing the precious metals in order to produce pollution-control devices for their vehicles. At the same time, international production of the metals has been in jeopardy for a while, and even though labor groups in South Africa had come close to agreeing on a deal to end a long strike, some concerns about a potential new strike among miners in South Africa pushed spot prices higher. Even though Stillwater Mining has diversified its mining exposure to include gold, most investors still look at the company as a play on its platinum-group metal production, and right now, all signs look favorable for continued growth there.

Source: Wikimedia Commons.

Constellation Brands gained more than 2% as the beer and spirits giant released its latest earnings report. Sales jumped more than 125% thanks to the company's acquisition of Grupo Modelo's U.S. beer business last year, and strong demand led to higher volume growth and a jump of 14% in net sales. Even though sales of wine and spirits were somewhat sluggish, falling 1% after adjusting for currency fluctuations, investors applauded an increase in Constellation's profit guidance, which it raised from a range of $3.95 to $4.15 per share to a new range of $4.10 to $4.25. With operating margins for the beer business soaring, Constellation seems to be riding the right wave to future growth.

Source: Gilead Sciences.

Gilead Sciences rose 2% to set a new all-time high today, as the biotech giant continues to draw enthusiasm over the prospects for its Sovaldi treatment for hepatitis C. So far, sales of the hep-C drug have been extremely strong, and Gilead hasn't even yet tapped the full potential of the drug as it's still looking for approval in some high-profile international markets, including Japan. Yet Sovaldi isn't the only treatment making news for Gilead, as the company awaits FDA approval decisions for its idelalisib drug to treat various types of blood-related cancers. With deadlines for FDA review coming in the next couple of months, shareholders hope that positive news will serve as a catalyst for further gains.

General Electric  and Honda  might be two of the most diversified transportation companies in the world, but their product lines hardly overlap. Until now, that is.

After 10 years in the making, GE and Honda conducted a maiden flight of their first jointly developed sleek new business jet on Tuesday. It's called the HondaJet, and it represents the Japanese company's first foray into the aircraft business. For GE, it's another example of how the company's taking the long view to co-create what Honda refers to as "the world's most advanced light jet" to date.

An early picture of the GE Honda AeroJet, a joint venture between GE Aviation and Japan's Honda. Source: General Electric.

GE takes the business jet to a higher level
Back in 2004, GE and Honda joined forces in a 50-50 split venture known as GE Honda Aero Engines to bring light, low-cost business jets to market. They setup shop right next to GE's Aviation headquarters in Cincinnati to be close to crucial research taking place in advanced materials.

Their aim was to co-develop a new-generation engine that would be situated above the wings of a small aircraft to reduce drag and cabin noise, and improve performance and fuel efficiency. That engine became known as the HF120, the smallest in GE's portfolio. The picture above shows the unique mounting of the engine on top of the wings. Below is a tighter view of the HF120 engine placed next to GE's largest engine currently in production, the GE9X.

GE's smallest and largest engines: the HF120 (left) and GE9x (right). Source: General Electric.

For perspective, the HF120 measures a mere 18.5 inches in diameter and produces 2,095 pounds of thrusts, whereas the GE9X has a fan diameter of 132 inches and a projected thrust of more than 100,000 pounds.

Despite its relatively small build, the HF120 packs a punch. The twin engines are designed to push the HondaJet to a top speed of 420 knots, the equivalent of 483 mph. At the same time, the HondaJet was designed to cruise at a maximum altitude of 43,000 feet over a range of 1,357 miles.

These specs only tell part of the story, though, according to GE. As followers of GE Aviation are aware, the company is highly optimistic about the advancements in materials that offer tremendous benefits, be it reducing drag, noise, or maintenance costs or even increasing the temperatures at which parts can function properly.

For the HondaJet, key materials advancements include a fuselage made from a light carbon fiber composite, and next-generation all-glass electronic systems, also known as avionics. Beyond those, GE stated in a 2007 press release that advanced airfoil materials and coatings would give the plane "the ability to operate in service for an industry record-setting 5,000 hours before the first major overhaul," thereby decreasing the cost of ownership for end users. That's an attractive selling point, even for those willing to shell out millions for a private jet to begin with. What's even more impressive is that Honda's pricing the plane at $4.5 million, which presents a 68% discount relative to a comparable Gulfstream jet at roughly $14 million.

So, GE and Honda are producing a quieter, lighter, more reliable plane at less than half the price of the competition? I'm sold. In fact... I'll take two.

Foolish takeaways
With the first production flight complete, Honda and GE can move forward with their plans to enter the highly anticipated HondaJet into service in 2015. Will the debut subsequently cause GE's stock to soar, as well? Probably not. But here are two interesting takeaways:

1. The HondaJet shows that GE is committed to long-term bets, even if they take years to payoff. I've referred to these investments as "moon shot" bets to steal a phrase from Google's Larry Page. And these are risks that investors like to see big companies taking, especially in an aircraft engine market that's expected to generate $500 billion in sales during the next decade.

2. The HondaJet's test flight took place in Greensboro, N.C., where Honda's production facility is located. That's conveniently close to two cutting-edge aviation facilities currently being constructed in Asheville, N.C., and Greenville, S.C. This is a prime example of what economists refer to as "geographic clustering." What's particularly exciting is that new advancements are more easily shared when they're -- surprise -- happening right down the road. In this case, collaborating with Honda adds a whole dimension. For GE, it looks like outsourcing might be a relic of the past.

The Ford Fusion Energi Was The Darling Of Plug-In Sales For June Of 2014 In The US

After electric vehicle sales flew off the chart in May with a record 12,000 cars sold, it was assumed June would be a pull back month of sorts as the consumer took a breath and as national EV inventories would need to be replenished.

The Nissan LEAF Lead All Plug-Ins For Sales For The 8th Consecutive Month

And while June did ultimately fall short, it missed by only a hair (160 units) with an estimated 11,893 plug-ins sold in the US.

Compared to June of 2013, that was an improvement of 43% over the year prior. Adjusted for the 2 additional selling days in 2013 (26 vs 24), sales increased by a staggering 55%. For the year to date, an estimated 54,463 Americans have chosen to buy a new EV, which is up 33% from last year at this point when 40,847 EVs were sold.

At the current pace, 130,000 new vehicle purchases would be of the plug-in variety for 2014; closing in on that elusive one in every 100 vehicles purchased figure.

Looking at June specifically it was Ford, who despite having to restate the all electric range and fuel efficiency of its plug-in Energi models, unexpectedly took the forefront by selling more than 3,000 EVs for the first time in its history-lead by a new all-time high 1,939 Fusion Energi sedan sales:

• Ford Fusion Energi-1,939
• Ford C-Max Energi-988
• Ford Focus Electric-197

Tesla Motors To Shift Its Attention To China This Summer

According to our tracking, a strong month was also posted by Tesla Motors as the company looked to catch up on US orders before shifting production away from the US this summer in favor of international and RHD (right hand drive) deliveries in July and August.

And while Tesla and Ford were the 'big name' movers for June, Nissan continues to be the backbone of the electric vehicle industry in the US as the LEAF set its 16th consecutive record month for year-over-years sales in June with 2,347 cars sold.

Once again, that is 16 consecutive months of record sales for the LEAF. The electric Nissan has also been the best selling plug-in vehicle overall for the past 8 months in a row.

The only drag on the industry in June continues to be the Chevrolet Volt, as sales were off 34% (1,777 vs 2,698) during the month. Overall for the year, the Chevy is off 13%, the only major production EV to show a loss.

2014 Monthly Sales Chart For The Major Plug-In Automakers *Estimated Tesla NA Sales Numbers (Q1 Sales reported @ 6,457-3,000 Intl Delivers) *Fiat 500e data estimated for Jan/Feb

Some points of interest for June EV sales:

New all-time monthly sales highs (previous high):

• Ford Fusion Energi-1,939 (1,342)
• BMW i3-358 (336)
• smart ED-278 (206)
• Cadillac ELR-97 (81)

Highest EV sales as a ratio to the brand:

• smart 278 EV sales (vs 392 petrol cars) - 41%

Top Selling Plug-In Manufacturers:

1. Ford-3,124
2. Nissan-2,347
3. General Motors-1,959
4. Tesla Motora-1,800 *(est)
5. Toyota-1,662

The ADP employment report, a much-watched monthly gauge of U.S. private sector employment, walloped Wall Street estimates today. According to ADP, private sector payrolls expanded by 281,000 last month, a far cry from the 213,000 consensus experts had called for. Stocks were blasé about the bullish data, hardly budging from yesterday's levels. Delta Air Lines , Harley-Davidson, , and Facebook, even had the nerve to finish Wednesday deep in the red, as three of the S&P 500 Index's worst decliners. The S&P advanced only slightly, adding 1 point, or 0.1%, to end at 1,974, a record closing high.

With America's birthday looming on Friday, Wednesday marked the last full day of trading in the holiday-shortened week; markets will close at 1 p.m. ET tomorrow. Not wishing to waste any time, Delta Air Lines investors got a healthy dose of selling in today, as shares plunged 5.1%. The airline, which keeps shareholders informed with monthly reports on various metrics, announced some less-than stellar June results today. In particular, the higher-margin international traffic advanced a meager 1.9% last month, a deceleration of more than 50% from April's growth levels.

One thing's for sure: Delta's international struggles in June probably weren't due to droves of Harley-Davidson riders taking to their bikes for intercontinental trips. Aside from the sheer impracticality of a mass, choreographed migration of bikers (Myrtle Beach Bike Week being a notable exception), there's the issue of Harley's second-quarter sales. The stock fell 3.6% on Wednesday after research firm Raymond James downgraded shares to "market perform" from "strong buy," citing channel checks that implied chopper sales at the iconic company probably wouldn't live up to Wall Street's 11% sales growth estimate for the second quarter.

Facebook's own Facebook page encourages users to create groups for those with similar interests. Who's passionate about business ethics? Image Source: Facebook.

While about half a dozen utilities stocks lost more ground than Facebook shares today, their underperformance had more to do with systemic concerns about the sector they hail from than anything company-specific. Facebook stock, meanwhile, lost 2.4% Wednesday under much more interesting -- and controversial circumstances. The world's largest social network admitted to running a psychological experiment back in 2012 on hundreds of thousands of its users -- without their consent. The company only apologized today - and for the way it communicated to users about the experiment, not for actually conducting the experiment itself. The half-hearted apology followed news that Britain had launched an investigation into the experiment, which tested whether manipulating a user's "news feed" would in turn affect the user's own mood. The results confirmed that this was the case.

Charlie Munger, the Vice Chairman of Berkshire Hathaway  and longtime investing partner of Warren Buffett, is known for frequently quoting the 19th century mathematician, Carl Gustav Jacob Jacobi:

"Invert, always invert."

Munger argues that solving a problem often requires one to look at it from a counter perspective. If you're aiming to sell a product, it can be helpful to ask, "How would I get people to not buy my product."

With this "inversion" in mind, we asked five Fools to look at Berkshire Hathway's portfolio of stocks and tell us which company they would avoid buying -- rather than the typical question "Which Buffett stock would you buy?"

John Maxfield: Wal-Mart

I'm not somebody who thinks Wal-Mart is doomed. At the same time, I do believe its best days are behind it.

Matt Frankel: General Motors 

GM's stock does have significant upside potential, but it's just too risky right now for my taste.

We still don't know the full effect and legal implications of the vehicle recalls, which seem to get bigger and bigger. After the latest round of recalls announced June 16, GM has recalled more than 16 million vehicles this year alone, more than the amount of new cars the company is expected to sell this year in the U.S. A recent report ties GM's faulty ignition switches to 74 deaths, while GM only claims responsibility for 13, so there is still a lot of potential for legal backlash.

Aside from the impossible-to-quantify eventual legal fallout, GM simply doesn't have the "wide moat" Buffett normally looks for in stocks. That is, there is nothing to give GM a distinct competitive advantage over rivals like Ford, Nissan, Toyota, and others. The auto industry itself could face challenges over time as fuel costs rise and technology evolves.

I love General Motors' products and actually own a GM car (which was just recalled), but the risk-reward just doesn't make sense, in my opinion.

Kingkarn Amjareon: Like Matt, I'm avoiding General Motors.

General Motors is one of the three largest auto manufacturers in the United States and, from a valuation point of view, does make an attractive value proposition.

However, General Motors' recall disaster poses serious bottom line risks for the company. With the recalls rolling in worldwide for a variety of safety issues, General Motors faces not only recall costs in the billions, but also painful fines or an expensive settlement with an increasingly hard-charging Department of Justice which could put short-term selling pressure on General Motor's stock price.

In addition, General Motors has suffered significant brand damage due to a series of highly publicized safety-related recalls which could hurt GM's topline growth and market share in the coming years.

Patrick Morris: I'm on the same page regarding Wal-Mart and GM, but I'd also add Starz  to the companies I'd avoid.

While it trades at a very reasonable 12 times forward price-to-earnings multiple, the business scares me. With people being willing to cut ties to their cable companies -- whom Starz depends on for profits -- its long-term "moat" and future seems incredibly uncertain.

In 1991, Buffett said; "most media properties continue to have far better economic characteristics than those possessed by the average American business. But gone are the days of bullet-proof franchises and cornucopian economics."

Considering the Berkshire Hathaway position in Starz has been reduced by more than 90% from $652 million at the end of 2012 to just $62 million at last count, one has to think Buffett believes it isn't just "bullet-proof franchises and cornucopian economics," but perhaps all economics which are now gone for media companies like Starz.

Jim Royal: Coca-Cola .

Sure, Coca-Cola will continue to grow and perform adequately, but the days of real fizz are long behind this sugar-water server.

Soda sales just don't have the pop they used to in the U.S., and while Coke still has excellent opportunities abroad and an enviable distribution network that allows it to capitalize on wherever consumers' drink tastes lead, the company is just too large to have the oomph that I'd want in my portfolio.

It's a problem shared by many of the positions in Berkshire's portfolio. Of course, the government is floating Buffett billions in cash via deferred capital gains taxes, so it makes plenty of sense why he wouldn't want to sell.

But for new investors, why buy Coke with expected long-term high single digit returns at best? I know quite a few places to receive 15-20% annual returns, so most of the large, long-tenured stocks in Berkshire's portfolio are not for me, anyway.

The Dow Jones Industrials set their 13th record of the year on Wednesday, posting a 20-point advance that brought the average to within 24 points of the 17,000 level. Even as second-quarter earnings season looms large in the near future, investors are still paying close attention to economic data, and tomorrow's key report on the jobless rate and nonfarm-payroll jobs creation has the potential to move the Dow. Let's look at what investors are expecting tomorrow and how the results could affect Dow components Wal-Mart and McDonald's in particular.

Focusing on jobs
Currently, economists expect the economy to have created 215,000 jobs in June, roughly unchanged from May's report, and for the unemployment rate to stay at 6.3%. As you can see below, those figures would be consistent with the long-term drop in unemployment and the ongoing steady creation of jobs since the recession ended.

US Change in Nonfarm Payrolls data by YCharts

Yet when you look behind those employment numbers, one troubling trend emerges. Even as the unemployment rate has fallen sharply, so too has the participation rate among working-age Americans in the labor force:

US Labor Force Participation Rate data by YCharts

What that figure suggests is that many people are simply leaving the labor force. Even though those people don't have jobs, they're not counted as unemployed for purposes of determining the unemployment rate. As a result, the decline we've seen in unemployment is in some ways illusory if those non-participants have given up out of frustration rather than by choice.

What to watch for
Nevertheless, today's report on private job creation was much higher than investors had expected. While some doubt whether the private data will match tomorrow's government report, any support for employment will have significant economic impact.

Source: McDonald's.

In particular, both Wal-Mart and McDonald's have seen sluggish growth, and part of the cause of their troubles stems from the failure of many lower-income and middle-income workers to participate in the economic recovery. Wal-Mart has cited changes to food-stamp programs as part of the cause of recent sales disappointments, and McDonald's has recommitted itself to its value-menu strategy in order to woo those of lesser financial means through its doors. As their customer base becomes better off, both McDonald's and Wal-Mart have the capacity to win more of their business and finally pull out of the difficult times they've had lately.

A strong employment report tomorrow could easily give investors the boost they need to send the Dow Jones Industrials above 17,000. Whether they stay there, though, will depend on continued strength in the economy both in the U.S. and across the globe.

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Bank of America  gained 1.6% today after Deutsche Bank upgraded the banking gorilla from hold to buy.

So what: Along with the upgrade, analyst Matt O'Connor boosted his price target to $18 (from $16.50), representing about 15% worth of upside to yesterday's close. So while momentum traders might be turned off by Bank of America's price weakness in recent months, O'Connor's call could reflect a sense on Wall Street that the concerns surrounding its growth trajectory are becoming overblown.

Now what: According to Deutsche, Bank of America's risk/reward trade-off is rather attractive at this point. "We think the most meaningful negative catalysts have been identified and largely priced in," said O'Connor. "From here, Bank of America is well-levered to a potential pickup in capital markets revenues, higher interest rates, and an improving US economy." When you couple that upbeat outlook with Bank of America's cheapish price-to-book of 0.8, it's tough to disagree with Deutsche's bullishness. 

Back on May 8, Coca-Cola  quietly started adding to its previously announced 10% position in Keurig Green Mountain  by buying shares on the open market. The trades, placed over three business days, preceded an announcement that the company would exercise its option to acquire up to a 16% stake in GMCR.

Over the course of 945 separate transactions, from humble "round lot" 100-share trades, to single purchases in excess of $5 million, the company bought in force, in the end acquiring $302.3 million worth of GMCR stock.

There was just one hitch in this well-executed accumulation: Keurig Green Mountain's stock price was rising rapidly in real time. It wasn't propelled by exiting short-sellers -- those had largely scrambled down from the Green Mountain when Coke first announced its presence in the stock in February. The previous evening, GMCR had reported second-quarter 2014 revenue that increased almost 10% over the prior year, demonstrating to many that the company had regained its sales momentum.

From Coke's first purchase at $96.65 on the 8th, a Thursday, to its last trade the following Monday, Keurig Green Mountain's share price would climb almost 11.5%, as Coke found itself bidding against other buyers enthused by GMCR's earnings report, while simultaneously contributing to the upward pressure on the stock.

By the time the closing bell rang on May 12, Coke had acquired its total batch of 2.8 million shares at an average price of $107.75, meaning that it had seen its excursion grow more expensive by $31 million. 

Of course, $31 million is a pittance for Coke -- it sells that much of its products every six hours. But the rapidly rising share price of GMCR has ostensibly forced management to grapple with a fundamental question: How many shares of the company does Coke want to own, and how quickly?

Now we just need doughnuts. Image from Flickr/planetc1 under Creative Commons license.

Keurig Green Mountain reminds Coke of a company it already knows very well
Exercising its option to purchase more shares of Keurig Green Mountain just 14 weeks after its first announcement of ownership speaks volumes about Coke's future intent. The market responded so positively to news of its initial stake that Coke was quickly put in the position of having to buy shares at a premium it created itself.

I've argued that the market really can't value the future impact of Coke's trademark on GMCR revenue at present. This imprecision will provide buoyancy to the stock until earnings come in from Coke-branded drinks on the upcoming Keurig Cold carbonated single serve platform. You can read this analysis here. GMCR now trades at a 54% premium to where it did the day before Coke announced its initial position in February. It's evident that Coke has revised both its expectations and its interest level, and probably wishes it had negotiated a larger initial purchase.

Coke's desire to add to its GMCR position may have something to do with Keurig's resemblance to Coke itself. If you were to strip away the details from these two companies, you'd find two very similar operations. Coke is a $46.8 billion company that licenses its intellectual property (its brand formulas) to bottlers and restaurants, and returns about 18% net profit each year.

Keurig Green Mountain, which is compensated to distribute other brands' coffees through its proprietary technology, is approximately one-tenth the size of Coca-Cola (at $4.4 billion in annual revenue), and returns roughly 11% profit each year, although last quarter its net profit clocked in closer to Coke's, at 15%. As a financial model, Keurig Green Mountain is a younger version of Coca-Cola, with a higher growth rate.

Coke's money and distribution can scale GMCR quickly
Seeing the similarities, Coke's management probably recognizes that its resources could fuel Keurig's growth on a global basis. Keurig Green Mountain has existed as a North American company since its inception. At the end of its last fiscal year, it estimated that it had only a 13% market penetration in North America. While there is surely further potential on this continent, much opportunity lies ahead in other markets: The company's international push did not start until fiscal 2014.

If Coke owned GMCR outright, it could subsidize international expansion by using its balance sheet for price investments in GMCR's technology. In other words, Coke has the deep pockets to offer GMCR's Keurig machines at a discounted price in Europe and Asia (two major coffee markets), which will speed adoption of Keurig's technology versus existing competitors such as Nestle. Nestle's "Nespresso" single-pod machine is the current single-serve coffee leader, with 26% share of the global market. Hastening adoption of Keurig brewing systems will pave the way for Coke's unparalleled distribution system to move K-cups en masse -- and wrest market share from Nestle.

Image from Flickr/Taymaz Valley under Creative Commons License

GMCR is hitting the wrong line item on Coke's income statement
Perhaps the most persuasive reason for Coke to completely own Keurig lies in the mechanics of accounting. For the time being, Coke recognizes its GMCR holdings as "available for sale" securities. Changes in market value of the shares occur in the "other income" line of the income statement. As Coke's interest rises toward the 16% mark, it may change its accounting to reflect an equity investment, with its proportionate share of income from GMCR recorded in the income statement's "equity income" line item, net of any dividends received.

While such accounting would positively affect earnings per share, or EPS, the impact of owning a rapidly growing company whose prospects will improve under Coke's ownership is muted. If Coke owned GMCR outright, the smaller company's revenues and expenses would consolidate under Coke's income statement, and affect measures that Coke investors pay close attention to, such as operating income. More importantly, GMCR's revenue growth would improve Coke's overall reported revenue growth. As I discussed, Keurig Green Mountain is only one-tenth the size of Coke, but it's expanded revenue by a compounded annual growth rate of 28% over the past three years. It's conceivable that Keurig Green Mountain, even after factoring in slower growth, could double its revenue over the course of five to 10 years, at which point it would have a measurable influence on Coke's revenue. Coke loses all this benefit if it continues to hold just a 16% stake, accounted for in a single line item, at the very bottom of its income statement.

A final clue: close ties in the relationship
As I've written about previously, Keurig Green Mountain's CEO, Brian Kelley, is himself a Coke veteran, with an understanding of how Coke can assist the company to scale up its operations. During GMCR's most recently conducted earnings conference call, Kelley noted:

We are also in the final stages of closing on the site for the first dedicated commercial cold -- Keurig Cold production facility in the southeastern United States.

Source: GMCR quarterly earnings call transcript

Last week, Georgia Gov. Nathan Deal confirmed that Keurig Green Mountain has closed on a $337 million, 585,000-square-foot production facility for the upcoming Keurig Cold machine, just outside Atlanta -- Coca-Cola's corporate headquarters. This reveals from Kelly's perspective just how important both Coke's trademarks and expertise will be in selling Keurig Cold machines and "Cold" carbonated servings. It's also yet another clue that these two corporations are gearing up, perhaps inevitably, for a much closer relationship. 

Economic doldrums and intense competition have forced clothing retailers like Gap , American Eagle Outfitters , and Abercrombie & Fitch to operate on lower prices. This has in turn resulted in sluggish growth for these companies. In fact, some of these retailers have now started cutting their costs more vigorously in order to remain profitable.

Let's analyse Gap in detail and see where it's heading under these trying circumstances.

First quarter earnings
Gap's first quarter earnings came in at $0.58 per share, beating the Zacks Consensus Estimate of $0.57 per share. However, earnings were down 18% from the year-ago figure of $0.71 a share; this was attributable to higher occupancy expenses and cost of goods sold along with unfavorable foreign currency fluctuations.

Identical-store sales inched down 1%, while net sales ticked up 1.2% to $1,774 million. On a constant currency basis, net sales were up 2% from the comparable quarter. Gap's online sales also jumped 15% to $575 million.

Same-store sales for Gap Global fell by 5% while Banana Republic Global's comps dropped by 1%. Comps at Old Navy Global stores were up 1% compared to 3% in the last period's quarter.

What is Gap up to?
Besides paying its shareholders a cash dividend of $0.22 a share, Gap also bought its shares worth $219 million during the quarter. Last year, the company authorized a share repurchase program of $1 billion, of which $443 million shares are still remaining.

Gap has identified Asia as a potential high-growth region. During the quarter, it launched its first ever Old Navy company-operated store and e-commerce site in Mainland China. In addition, it also introduced its first ever Old Navy franchise-operated store in the Philippines and plans on opening four more during this year. Gap also introduced its first ever store in Taiwan during this quarter.

Gap also opened six new Athleta stores in the U.S., which is in line with its target of operating 100 Athleta stores by the end of fiscal 2014. Overall, the company opened 31 new stores while closing 16 stores, bringing the total store count to 3,565 across 48 countries. Going forward, Gap wants to open 185 company-operated stores in fiscal 2014. The company's primary focus remains on expanding its Gap stores in China and Old Navy outlets in Japan. It will also be shutting down 70 company-operated outlets.

Gap's Reserve-in-Store service, which has done a great job, has now been rolled out to 500 Gap stores and 400 Banana Republic outlets. The company expects the service to drive its sales in the coming years, which is why it's actively marketing it across the US.

Gap has reaffirmed its earnings' guidance for fiscal 2014; it expects earnings per share of $2.90-$2.95.

Industry peers
Because of weak top-line growth and increased markdowns, American Eagle Outfitters' first quarter earnings fell 89% from the prior-year quarter. The retailer's net sales dropped 4.9% to $646.1 million, missing the Zacks Consensus Estimate of $657 million. Identical-store sales declined by 10%; comps at Aerie stores decreased by 4%, while it declined 11% at AE Total Brand stores. Gross margin also shrank by 420 basis points to 34.9%.

In the next quarter, the company expects its per-share earnings to remain flat at $0.10, as it projects high single-digit decline in comparable sales.

Abercrombie & Fitch reported better-than-expected results in the first quarter; its revenue dropped by just 2% to $822 million, while analysts were expecting the company to post sales of $798 million. The retailer's loss per share came in at $0.17, which was lower than estimates of $0.19 per share. Though comparable-sales were down by 4%, there was significant improvement from previous quarters' high rates of comps decline. 

In order to keep a check on its losses, Abercrombie will be reducing its average unit costs in the coming quarters. It will also be shutting 70 stores this year to help reduce its expenses.

Final thoughts
Gap's first quarter earnings beat estimates, though it fell behind last year's figure. While the company kept opening new locations, it was hit with higher occupancy costs that lead to weaker earnings. Had foreign currencies remained stable, its net sales would have grown by 2%. One of the highlights of the quarter was Gap's tremendous growth in online sales. E-commerce, along with expansion across the Asian region, will fuel the company's growth in the future.

One area that the company should work on is its merchandize margins. In such a competitive retail environment, Gap can't increase its prices for more margins. Instead, it should try to cut down on its cost of goods sold, which kept increasing during the first quarter.

As the retailer is still in the expansion phase, it's bound to incur more expenses in the coming quarters. The company's comps across its major segments are decreasing, which is a worrying sign for investors. Considering this and the above discussion, I will remain neutral on Gap at this point in time. 

There are few things as rewarding as finding a consistent and generous-yielding dividend stock. It's for this reason that income-seeking investors have come to know and love Walgreen , the well-known chain of pharmacies.

Its attractive qualities are too numerous to list here, but there are nevertheless three that stand out. First, with a price-to-earnings ratio of 26, its stock is neither wildly under- or overpriced. Second, with a dividend yield of 1.7%, it's only slightly below the 1.9% average yield on the S&P 500. Finally, it's paid uninterrupted dividends for an impressive 38 consecutive years.

It's for these three reasons, in turn, that Motley Fool contributor John Maxfield concludes in the video below that dividend-seeking investors could do a lot worse than Walgreen when it comes to finding a worthy addition to their portfolios.

Walgreen Co. , the largest owner and operator of pharmacies in the United States, announced its third-quarter earnings results on June 24 and its stock reacted by making a move to the downside. It's not often that we see a pullback in this American titan, so let's take a look at the results and other key financials and then compare it to its largest competitor, CVS Caremark , to determine if this decline is our opportunity to buy or if there is an underlying issue that is warning us to stay away.

Source: Walgreen Co.

Walgreen mixes it up in the third quarter
Walgreen released its third-quarter report before the market opened on June 24 and the results were mixed compared to the consensus analyst estimates; here's an overview:

Source: Benzinga

Walgreen's earnings per share increased 7.1% and revenue increased 5.9% year-over-year, driven by an impressive 4.8% comparable-store sales rise; this strong growth in comparable-store sales was helped by an 8.4% increase in prescription sales, which accounted for 64.4% of total sales during the quarter. Walgreen also noted that it now owns an incredible 19% share of the retail prescription market, up 20 basis points from the year-ago quarter.  

Source: Walgreen Co.

Gross profit increased 4.2% to $5.44 billion and operating profit increased 3.5% to $1.03 billion, but the gross margin contracted 40 basis points to 28.1% and the operating margin contracted 10 basis points to 5.3%; these contractions resulted from cost of sales increasing 6.6% and selling, general, and administrative expenses increasing 4.3%. 

For the quarter, Walgreen had roughly $1 billion of free cash flow; the company used this free cash and the $2.11 billion in cash and cash equivalents it had at the beginning of the quarter to retire $742 million in long-term debt, pay $301 million in dividends, and open two new stores; as of the conclusion of the third quarter, the company had $3.75 billion in long-term debt, $2.13 billion in cash and cash equivalents, and 8,683 stores in all 50 of the United States, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands. 

Source: Walgreen Co.

So were these results good, bad, or so-so?
With all of the results in hand, I think it was a great quarter for Walgreen, regardless of whether or not it met the expectations of analysts, but the stock reacted by falling 1.7% on the day of the release; in the trading days since, the stock has traded erratically, but I believe it represents a great long-term opportunity at current levels. Here are my three top reasons why Walgreen's belongs in your portfolio today:

1. Prescriptions: Sales of prescriptions have shown consistent growth over the last decade and I believe this trend is here to stay; with a now 19% share of this market, Walgreen's is by far the best way to play it.
2. Expansion: Walgreen's currently has more than 8,600 stores, but there are still plenty of untapped markets for it to expand to. I believe the company could easily grow its store count to 10,000 over the long-term.
3. Joint Venture with Alliance Boots: Walgreen's and Alliance Boots entered into a joint venture to form the world's first "pharmacy-led, healthy and wellbeing enterprise" in August of 2013 and it has already positively affected the financials of both companies. The two companies will continue to build on this relationship and I believe it could be one of the main drivers of Walgreen's growth going forward.

A record quarter for the competition
CVS Caremark, the second-largest owner and operator of pharmacies in the United States, released earnings of its own back on May 2 and it too reported mixed results; here's a summary of its first quarter:

Source: Benzinga

Earnings per share increased 22.5% and revenue increased 6.3% compared to the same period a year ago, as comparable-store sales grew 1.4%; these results were driven by a 10.3% increase in revenue from its pharmacy services segment and a 2.7% increase in its retail pharmacy segment. 

Source: Wikimedia Commons

CVS' gross profit increased 6.5% to $5.94 billion and operating profit increased 19.5% to $2.02 billion, as its gross margin expanded 10 basis points to 18.2% and operating margin expanded 70 basis points to 6.2%; cost of sales and operating expenses increased just 6.2% and 0.9%, respectively, which enabled the margin increases. 

Lastly, CVS generated $1.8 billion in free cash flow during the quarter which allowed it to repurchase $801 million worth of its common stock, pay $325 million in dividends, open 15 net new retail drugstores, and reaffirm its full-year outlook, among other things. The company now operates 7,829 locations in 47 states, the District of Columbia, Puerto Rico, and Brazil.

All in all, it was a healthy quarter for the No. 2 company in the industry. I believe CVS could provide substantial returns over the next several years, so investors who are not sold on Walgreen's potential should take a deeper look at it.

The Foolish bottom line
Walgreen Co. is one of the most powerful brands in the United States and its now 19% share of the retail prescription market proves that it is a growing force to be reckoned with. The company's stock took a slight hit after mixed third-quarter earnings, but I believe the long-term potential of Walgreen far outweighs any short-term negativity so Foolish investors should give it a second look.

German flag. Source: Wikimedia Commons.

Around the world, retirement ages have been going up gradually. But Germany just shocked the rest of Europe by freeing up early retirement benefits for certain workers.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, talks about the shocking move that Germany recently made. Dan notes that historically, Germany has pushed for raising the retirement age, implementing an increase from 65 to 67 gradually over the next 15 years or so and with discussions of raising the retirement age further to 69. Germany also put pressure on other European countries to raise their retirement ages. Now, though, Germany is allowing workers with 45 years of work history the ability to retire two years early than full retirement age with a full pension, meaning that some could end up getting full benefits as early as age 63. Dan concludes that with accusations of hypocrisy from the rest of Europe, Germany's early retirement victory might prove short-lived.

European plane maker  Airbus recently received a rude shock. One of its key clients and the fastest growing Gulf operator, Emirates Airline, cancelled a multibillion-dollar deal the two had made back in 2007. What makes matters worse is that the cancellation is for the A350 aircraft on which Airbus' future hopes are tied, and it happened just months before the aircraft enters service. The A350 is Airbus' answer to Boeing's 787 Dreamliner and regarded as a modern marvel. How does this setback affect Airbus? Let's find out.

The multibillion-dollar setback
Emirates recently called off its 70 orders for Airbus A350 wide-body aircraft, which is the largest cancellation suffered by Airbus to date. The deal amount was around $16 billion in 2007, and the current list price is roughly $21 billion. Though Emirates management did not cite any specific reason for the decision, suggesting it had to do with "fleet management," it did sound an alarm bell for Airbus. The company is currently pressed for cash, having invested around $15 billion on development of the fuel-efficient A350XWB aircraft, which is expected to showcase similar technology as in Boeing's widebody Dreamliner 787 jets. 

The A350-900, Source: Airbus.

With this cancellation, the order book for A350XWBs currently stands at 742 from 38 customers. Albeit this number shows that the backlog is strong and not dwindling, the cancelled Emirates order did represent around 8.5% of Airbus' backlog. This is also a big competitive setback as Emirates placed orders for 150 Boeing 777Xs with 50 more options at the Dubai Air Show in November. Bloomberg reports that Mark D. Martin, CEO of Dubai-based Martin Consulting, has said that "the 777 is now increasingly becoming the mainstay fleet of Emirates ... the 777 is flying to almost all their key destinations."

Airbus-Emirates relationship continue
The Emirates' cancellation made investors nervous, and the stock price dropped, but COO John Leahy has soothed concerns by saying other operators have shown interest in buying the planes, and the company hopes to sell the lot by 2020. The firm order of 50 A350 planes by Etihad Airways from the Dubai Airshow also serves to neutralize the negative impact of the Emirates cancellation. The plane maker has a huge wide-body aircraft backlog of 5.6 years of production, with a majority of A350 logged orders. 

The deal cancellation does not signal a rift in the long-standing relationship of Airbus and Emirates. A few months back in November 2013, Emirates placed orders for 47 A380s. Given that the superjumbo jets are finding it difficult to find buyers with growing popularity of twin-engine aircraft, the deal was a nice surprise. Tim Clark, President of Emirates Airlines, said while appreciating this airplane, "The A380 is our flagship aircraft. It is popular with our customers and delivers results for us in terms of operational performance." Emirates already has a fleet of 48 A380s in operation and remains the top client for this aircraft. 

The Emirates fleet dynamics. Source: airchive.com.

With this order Airbus' backlog for A380 superjumbo increased to eight years of production, far ahead of Boeing's backlog of 2.8 years of production for its own superjumbo 747. 

Airbus is in a strong market position
Airbus won 15 new customers in 2013 and ended the year with close to 51% gross market share in the aircraft category over 100 seats. It successfully closed its order book 80% higher than that reported in 2012 for commercial aircraft. This was almost 11% greater than the net order count reported by Boeing. Airbus President and CEO, Fabrice Bregier, stated -- "In 2014, there will be further improvements in our global competitiveness, efficiency and effectiveness. The focus also will be on incremental innovation that is simpler, less risky, and less costly and comes faster to market."

True to his words, within the first five months of this year, Airbus racked up 203 net orders that is a comfortable count for the airplane manufacturer. The company is undertaking several measures to improve its profitability and free cash flow generation that has been a big concern for investors.

Foolish last word
The cancellation of the Emirates order is definitely bad news for Airbus, but it's good to know that the company is confident that this would not disrupt its delivery schedule. Emirates is a big account for the plane maker, and the A380 order marks the trust that the airline still has on Airbus manufactured airplanes. The strong backlog and the ongoing recovery in the commercial airplane segment provide Airbus with a cushion for what could have been a big blow to its future revenue prospects.

Today may have only been a half day for the market, but we were absolutely inundated with economic data that was pushed forward by tomorrow's July 4th holiday.

No report pushed the broad-based S&P 500 higher more than the nonfarm payroll figures for June. According to the U.S. Labor Department's early morning data release, nonfarm payroll employment rose by 288,000 in June, which was significantly higher than the range offered by economists of between 210,000 and 230,000. It also echoed the strength from yesterday's ADP private sector employment report. Because this number was so strong, and the labor force participation rate continues to dip over the long term, the U.S. unemployment rate ticked 0.2% lower, to 6.1%.

The monthly jobs report certainly overshadowed a relatively tame release of the initial weekly jobless claims data, which rose 2,000 from the prior week to a seasonally adjusted 315,000. Although investors would much prefer to never see this figure go up, a seasonally adjusted rate near 300,000 would certainly be conducive to slow, but steady, improvement in the jobs market, and would imply that the unemployed are having an easier time finding and keeping work.

ISM Services for June was also released this morning, and came in with a reading of 56 compared to May's reading of 56.3. This slight dip shouldn't be too surprising, as we witnessed slower expansion in the Chicago PMI earlier this week; so a slight slowdown in the service sector isn't much cause for concern.

Finally, average hourly earnings for June matched Wall Street's projections, and rose 0.2%. They also rose 0.2% in May. Higher pay for workers is important because it could lead to more disposable income and higher consumer spending. Since U.S. GDP is so intricately tied to consumer spending, this steady hourly earnings rise could bode well for the U.S. economy.

By day's end, the broad-based S&P 500 had climbed to yet another all-time closing high, rising 10.82 points (0.55%) to end at 1,985.44. The psychological 2,000 mark is now well within reach.

Source: Barta IV, Flickr.

It may have just been a half day of trading, but small-cap fiber-optic components supplier Alliance Fiber Optic Products came out to play with the big boys, rising 7.5% after research firm Sidoti initiated coverage on the company with a buy rating and a price target of $28, implying as much as 51% upside based on yesterday's closing price.

Alliance Fiber Optic is a company I once held in my own portfolio, and I can tell you from firsthand experience, its quarterly results have regularly blown away what few Wall Street estimates have been out there for nearly two years. As telecom providers and businesses with big data centers look to build out their infrastructure both in the U.S. and in overseas markets like China, Alliance Fiber Optic will be there to benefit. With a double-digit five-year top-line growth expectation, and a forward P/E of less than 15, I'd say shares still look relatively inexpensive.

Following closely behind Alliance Fiber Optic is metallurgical coal miner Walter Energy , which extended yesterday's gains by tacking on another 6.9%. What's odd about Walter Energy's move higher is that it comes after Standard & Poor's cut its corporate credit rating down to CCC+ from B-, due to what it believes are unsustainable debt levels given low metallurgical coal prices and reduced production expectations.

Source: Walter Energy.

On the other hand, bargain investors who remember that Walter traded at close to $140/share just three years ago anticipate quite the bargain could be had by purchasing shares here. While I'm a personal fan of the coal sector, Walter Energy is not a company I'd consider a strong buy here. Its high debt levels are worrisome, and I personally foresee thermal coal prices stabilizing long before met coal does. Obviously, the coal sector isn't going to disappear anytime soon; but if met coal, which is used to strengthen steel, can't find traction in this economic environment, then it might be best to avoid Walter Energy altogether for the time being.

Source: Cree.

Lastly, LED lighting specialist Cree shot higher by 5% after research firm Oppenheimer upgraded Cree to a buy, and boosted its price target to $59 from $52, implying as much as 17% upside to shares based on yesterday's closing price. Specifically, Oppenheimer pointed out Cree's operating leverage and strong management team, which it believes makes the company a solid long-term play in the LED space.

While I can appreciate Oppenheimer's opinion, and would certainly agree that Cree has double-digit top-line growth potential during the next couple of years, I also believe that investors have more than priced that opportunity into Cree's shares. Furthermore, Cree has proven in the past to be somewhat inconsistent around earnings time, which makes its forward P/E of 27 appear all-the-more scary. Like Walter Energy, Cree is a stock I'd suggest watching safely from the sidelines.

Source: Coach

Over the last two months following its last earnings report Coach  has seen its stock price continue to tumble almost daily.  The results were disappointing but at some point will the fall be enough?

Now as the stock barely holds onto $35 at the time of this writing after falling like a brick by another one-third since earnings day, the bag company may unfortunately still have plenty more room to drop like a stone.

Be careful of falling knives
Two months ago, Coach reported fiscal first-quarter results. North American sales slid 18%, same-store sales fell 21%, and net income plunged 20%. I wish I could say this occurred because of weather or some other crazy excuse, but the declines have been part of an overall trend for Coach.

As I wrote about in the previous fiscal quarter, for the second quarter North American revenue got chopped 9%, same-store sales got slashed 14%, and overall net income got clipped 16%. The company then warned of a "new competitive landscape." It sounds like the landscape has only gotten worse, not better. How do you value and invest in an outlook and results that look like a falling knife?

Anti-investor day
Coach held an "Analyst and Investor Day" in order to present the company's plans for the future and quell Wall Street's concerns. Instead, the meeting spooked investors, who ran for the hills and slammed the stock downward that day as many investors threw in the towel.

During the meeting Coach announced that it will close 70 of its stores, warned that revenue would likely drop by a low double-digit range over the next year, and predicted that North American same-store sales would continue to spiral downward by a high-teen percentage.

While Coach pays a decent dividend with a yield of around 4%, it's more of a consolation prize for a stock that's doing the limbo dance. How long can a company keep up its dividend when net income and its very business appear to be going down the tubes?

Source: Coach

Coach tries to coach investors
Coach insists that it's not about the here and now or even the next collection it will launch, it's about the long term and how the brand evolves. Victor Luis, CEO of Coach, stated, "We are confident we're taking the appropriate strategic actions, knowing that this is a multi-year journey that ensures both brand vibrancy and healthy, long-term growth."

But really, what else is he going to say -- we're doomed, you all better sell and get out while you can? How often do brands that were hot yesterday and have become duds today resurface as hot again in the future? I suppose there are plenty of examples like Adidas, but they are few and far between in overall terms.

Foolish takeaway
There are certainly no solid signs in North America of a Coach brand revival since the brand apparently hasn't stopped collapsing yet. Fools should wait on the sidelines for at least some clue of stability on sales or even a slower pace of the bleeding apparent from negative growth before it's time to consider Coach again. If and when the business turns around and returns to hyper growth again, investors will likely have plenty of time to grab on for the ride, even if a little late, while avoiding the dangerous risk the stock currently seems to present.