A weather-hit third quarter notwithstanding, courier giant FedEx's fiscal year 2014 that ended in May was "a good year", according to CFO Alan B. Graf Jr., and 2015 could be "even better". The Tennessee-based company beat both top- and bottom-line estimates for the fourth quarter, and expects e-commerce, cost-cutting efforts, and the improving global macroeconomic situation to drive future growth.

Source: FedEx.

Results at a glance
In 2014, FedEx reported total revenue of $45.6 billion compared with $44.3 billion in the past year. Combined revenue for the quarter beat analysts' consensus at Reuters of $11.66 billion, and stood at $11.84 billion, up 3.5% from the year-ago period. Top-line growth trickled down to the courier major's bottom line, which rose by an astounding 34.6% to $2.1 billion for the fiscal year, and more than doubled for the fourth quarter to $730 million over the year-ago quarter's $303 million.

FedEx Express, the company's largest business segment, saw subdued results. For the fiscal year, the segment recorded $27.1 billion in revenue, down 0.2% over last year, while fourth-quarter revenue saw a mild improvement of 0.3% to $7 billion. Overseas priority volume finally improved in the quarter after four straight quarters of declining numbers. Higher rates, increased weights per package, and favorable service mix boosted international export yield by 2% in the quarter, which suggests that FedEx's yield management efforts to maximize revenue and returns could be paying off. The positives, however, were slightly offset by lower revenues from Express freight and fuel surcharge.

The Ground division continues to pick up steam, rising 9.8% to $11.6 billion in the fiscal year against the previous year, thanks to higher shipment of online orders. Quarterly revenue came in at $3.01 billion, up 8% year over year. Average daily volume also rose 8% in the quarter over the year-ago period, and would have been even better had FedEx not lost a key customer to larger rival United Parcel Service.

Ground segment's share in FedEx's total revenue has been increasing steadily from 20% in 2009 to 25% in 2014 as seen in the chart below, while Express' share is gradually shrinking.

Comparing proportion of Express revenue and Ground revenue on consolidated revenue. Source: FedEx Q4 FY14 Stat Book, 10-K 2013, 10-K 2012, and 10-K 2011.

The road ahead "to be even better"
FedEx believes that global GDP could grow at a decent rate of 2.7% in 2014 and 3.1% in 2015, while the U.S. economy would expand by 2.2% in 2014 and 3.1% in 2015. This could drive FedEx's package volumes.

Despite these improvements, geopolitical pressure in different emerging markets and fluctuating energy prices might have a bearing on logistic companies like FedEx. CFO Alan Graf threw a word of caution: "It used to be that international trade was a multiple of GDP, and those days have passed." As a measure, the company is tightening control over costs, rightsizing capacity, reorganizing the Express segment, and restructuring its network.

FedEx's growth is expected to mainly come from the Ground segment with online sales driving volumes. FTI Consulting forecasts that online retail sales in the U.S. could nearly double from $260 billion in 2013 to $508 billion in 2020. The company is expanding its fleet to develop its Ground network, and is scheduled to take deliveries in the current fiscal year. Apart from this, the recently announced 'dimensional weight' pricing will push up the Ground segment's performance.

FedEx fleet, Source: Flikr.

FedEx has found a solution to a recurring problem, weighing down revenue. In May, it announced that Ground delivery charges would be revised effective January 2015, wherein charges won't depend on package weight alone, but size as well. The very next month, UPS made a similar announcement. Though the decision may affect volumes, but that could be compensated by higher revenue per package and better utilization of cargo space.

In fiscal year 2015, the company expects to earn $8.50-$9.00 a share, excluding fuel impact, but including an estimated gain of $0.45 through a share repurchase. FedEx aims to add $1.6 billion to the operating profit of its Express business in fiscal year 2016 over what it recorded in 2013.

Foolish bottom line
FedEx has shown resilience in the face of difficult weather. A better trade environment, a strong Ground segment, revised pricing policies, and significant cost-cutting programs are good signs for FedEx's future earnings prospects. The icing on the cake for investors is that the company has repurchased 9.9 million shares and increased its quarterly dividend by 33%.There is good reason to believe that FedEx is striving toward maximizing shareholders' value.

Source: FireEye

As cyber attacks remain a growing threat, the reasons to own enterprise security stocks may seem clear. Companies like FireEye , Proofpoint , and Palo Alto Networks  have been Wall Street favorites, with the latter recently catching a bullish upgrade as the top-in-class investment. Albeit, should you be so bullish?

Not all security is created equally
Like most industries, investors have a tendency to group together enterprise security stocks, believing that one is just as good as the other. But, the noted companies have unique approaches that all serve different areas of the industry.

Palo Alto is the largest of the three, offering advanced malware protection and next-generation firewalls that work on both traditional and physical servers, and also virtualized and cloud environments.

FireEye sells appliances that alert customers of advanced persistent threats, those that basic security software can't detect. However, FireEye's products can't eliminate the threat, which consequently creates the need for additional security products.

Proofpoint is an up-and-coming player that sells products to protect against malicious links and emails. One of its key products is Targeted Attack Protection, which saw year-over-year growth more than double last quarter.

A recent surge in demand
A rise in corporate cyber crime has executives willing to invest in protection. In a recent survey of Chief Security Officers, 43% plan a major firewall refresh in 2014 versus just 23% last year, which suggests accelerated growth for security companies.

Moreover, Palo Alto posted a solid fiscal third-quarter report last month, where it beat analyst expectations and grew revenue by 48.8% year over year. The company's services revenue, which includes cloud security subscriptions, outgrew total revenue with growth of 64% year over year.

Proofpoint also posted a solid quarter in May with revenue growth of nearly 40%. This quarter beat Wall Street expectations and sent shares soaring double-digits. FireEye is the fastest-growing security company in the space, in part due to several big acquisitions like Mandiant. However, analysts still believe FireEye can generate more than 50% annualized growth for the next three years.

You're going to pay to play
While explosive growth surrounds this industry, the key question remains how much investors are willing to pay for exposure. FireEye, in particular, trades at nearly 30 times sales, meaning investors are taking big bets that the company will eventually grow to support its $6 billion valuation.

Furthermore, the company is far from profitable, spending $2.18 in operating costs for every $1 in revenue. Hence, there are serious questions about whether the company can ever produce profits to compliment long-term growth concerns.

Proofpoint's nine-times-sales multiple is not nearly as ridiculous as FireEye's, nor is its operating margin of negative 21%. Until recently, Proofpoint hasn't had the growth of its peers, but if its new-found growth is sustainable, the company could be a good investment.

Lastly, Palo Alto looks expensive at 12 times sales, but as the need for cloud-based security increases, with firewalls being a fundamental piece of any company's security pie, Palo Alto is a company that could thrive long-term. Specifically, Palo Alto's firewalls are unique because they interact with the cloud and virtual technologies, both of which are increasing in popularity.

Therefore, while FireEye's advanced persistent threats and Proofpoint's email-like security products are a luxury, firewall protection remains a necessity for both consumers and enterprises that store delicate information. As a result, this fact favors Palo Alto as a long-term security stock that could meet and surpass high expectations.

Foolish thoughts
According to Morgan Stanley, one in four chief security officers in the enterprise space will use Palo Alto as either a primary or secondary firewall vendor at the time of their next refresh. Currently, Palo Alto has a 2% market share as a primary vendor, giving it the opportunity for significant long-term growth.

Moreover, the fact that many of the company's current customers will soon be forced into product refreshes should bode well for the company. With all things considered, Palo Alto looks secure in an industry that is still very speculative, making it a clear investment favorite. 

Gevalia Coffee, a well-known Mondelez coffee brand. Image by Slipp D. under Creative Commons license.

When Starbucks announced recently that it was raising prices on some of its retail and packaged coffee, Mondelez International  executives must have breathed a sigh of relief. That's because coffee pricing is something they don't have to worry about anymore -- at least not directly.

Back when Mondelez spun off its lower-margin Kraft grocery division in the fall of 2012, the company presented to investors both a rationale for the spinoff and a long-term goal: Mondelez would promote its snacking power brands such as Cadbury and Oreo, and grow organic revenues by 5% to 7% each year.

Several factors emerged that made it apparent that this goal, at least for the present, was an overreach. Among them, Mondelez miscalculated its rate of expansion in emerging markets. One of the more surprising weights on the company's organic revenue growth turned out to be coffee. Coffee pricing is inherently difficult, and as climate change increases the unpredictability of supply, it won't get any easier for multinationals to hedge their purchases with precision, while engaging one another in price competition on grocery-store shelves. Coffee futures are up 65% just this year alone.

From the first quarter that Mondelez reported earnings post-Kraft (Q3 2012) to its last reported quarter (Q1 2014), coffee has been cited as a drag on either organic revenue or operating income in every single earnings report. The pressure on organic revenue has not been insignificant: In one quarter the drag was as high as 1.3%, and in many quarters coffee pulled down top-line results anywhere between 0.5% and 0.8%. When one considers that the company has recently come painfully close to the bottom end of its projected range of 5% to 7% organic revenue growth, it's clear that coffee was acting in some fiscal quarters as a very visible and frustrating barrier to breaking through.

Douwe Egberts coffee, a flagship brand of D.E. Master Blenders. Image courtesy Andrew Currie under Creative Commons license.

This is why Mondelez's recently announced sale of its coffee business to European coffee titan D.E. Master Blenders 1753 is an astute reshuffling of assets. Mondelez will receive $5 billion in cash and retain a 49% equity stake in a new joint company to be named Jacobs Douwe Egberts. JDE will have annual revenues of over $7 billion, and will occupy the No. 2 position in coffee worldwide behind Nestle S.A. 

By selling its coffee business and retaining a significant but minority stake in the new company, Mondelez essentially turns its coffee business into an equity investment, which removes the effects of coffee from its normal operations. In other words, the earnings from Mondelez's share of JDE will only appear at the bottom of the income statement, in a line item for equity investments.

As coffee revenue will thus not appear on the top half of Mondelez's income statement, it will cease to hamper the company's organic growth rate. But Mondelez still gets the benefit of the coffee portfolio, by participating in earnings of the new company. And more important, management doesn't have to devote its attention to balancing out the effects of bulk coffee inventory in its revenue and operating earnings mix.

This spinoff is the opposite of a situation I have described in an article regarding Coca-Cola, in which it will be advantageous for Coke to add to its position in Keurig Green Mountain and acquire that company outright, in order for it to see the fast-growing Keurig's revenues on its income statement.

Benefits of decreased distraction
Focusing Mondelez more on its snacks business (projected to be 85% of total company revenue after the coffee division is sold off) will help management achieve its latest goal of increasing bottom-line results. Mondelez projects that through 2016, a supply chain optimization effort will yield about $1 billion in increased annual cash flow. These actions, coupled with a $3.5 billion restructuring program, should provide significant support to the company's goal of increasing its operating income margin some 400 basis points, from a current level of 12, to as high as 16%, in the next couple of years.

Mondelez's D.E. Master Blenders transaction is the sort of proactive, muscular deal that shareholders should appreciate. While the sale will remove about $4 billion of revenue from Mondelez's top line, the trade-off -- a company more focused on snacks, with better margins, less distraction to management, and no drag from the vagaries of coffee pricing -- is desirable. Investors will own a leaner, faster-growing company that concentrates on its power brands. And Mondelez will enjoy regular checks from a dominant global coffee business, of which it will be a roughly one-half owner when the transaction closes in 2015. Deals like this will set Mondelez up nicely in one to two years for a return to chasing 5% to 7% growth.

Last May, I announced my intention to create a portfolio that embodied life's basic needs. To that end, over a period of 10 weeks, I detailed 10 diverse companies that I think will outperform the broad-based S&P 500 over a three-year period because of their ability to outperform in both bull markets and bear markets, as well as their incredible pricing power in nearly any economic environment.

If you'd like a closer look at my reasoning behind each selection, just click on any, or all, of the following portfolio components:

•  
•  
•  
•  
• Chevron 
•  
• Ford 
• American Water Works 
• Procter & Gamble 

Let's look at how our portfolio of basic-needs stocks has fared since we began this experiment.

Source: Yahoo! Finance, author's calculations.

The Basic Needs portfolio may not have kept up with the benchmark S&P 500 this past week, but I'm nonetheless impressed by its outperformance over the past 11 months and the nearly 3% yield it has delivered. Compounded over time, these dividends are the differentiating factor that can help investors handily trounce the market.

Normally we would jump right into dividend news, but with none of our stocks announcing payouts, going ex-dividend, or paying dividends this past week, we'll instead focus on five news events that could affect individual companies within this portfolio.

Ford downshifts
Ford shareholders have had an incredible run since the recession, but they needed to downshift their expectations for domestic growth last week after the company reported a 6% decline in year-over-year U.S. vehicle sales for June. Overall, fleet sales dipped 7% while retail sales fell 5%. The big positive for the month included the best-ever June for the Fusion, but the month also saw F-Series sales dip by 11% and Fiesta sales plummet by 31%.

Source: Ford.

I would suggest not getting too worked up over this decline as of yet considering that it is just a single month. Then again, the fact that Ford's domestic sales are down 1.8% year to date has to be sitting poorly with some investors. Thankfully, strong growth in China and India, as well as a strength in the automaker's commercial vehicle segment in Europe, is more than canceling out domestic weakness. 

Select Medical buddies up
Proving that sometimes smaller companies can indeed be the biggest winners, outpatient rehabilitation and hospital provider Select Medical announced a joint venture with Emory Healthcare in Georgia to provide rehabilitative care to patients. Under the terms of the joint venture, Emory Healthcare will be the majority owner of most of the existing facilities, but Select Medical will step in and manage these hospitals. As noted by the press release, Select Medical will also be the majority owner of three long-term acute care hospitals in the greater Atlanta area.

This type of collaboration is incredibly important in enabling a smaller medical-care provider like Select Medical to expand its geographic reach while also keeping its costs under control. Prior to the implementation of the Affordable Care Act, known better as Obamacare, Select Medical had been tightening its belt. We're beginning to see those operational efficiency improvements through its latest results. Couple this collaboration and cost-cutting with the expectation of fewer uninsured and underinsured patients being treated, and the bullish case for Select Medical keeps growing.

Chevron gets the OK to expand
Just in case you thought vertically integrated oil and gas giant Chevron wasn't big enough already, on June 30 it and joint-venture partner Phillips 66 announced that they had received the appropriate environmental permits from the Texas Commission on Environmental Quality to expand normal alpha olefins production at their Cedar Bayou plant. According to their press release, the plant expansion will add 100,000 metric tons per year of capacity and construction should be done one year from now. The move is necessitated by increased demand for normal alpha olefins, which are used in products such a motor oil. 

Source: Rongy Benjamin, Flickr.

Although this approval isn't going to cause Chevron's top or bottom line to soar, it's another piece of the puzzle that demonstrates Chevron's diversity. Despite an early year swoon, higher oil prices appear to have Chevron back on track, which makes its 3.2% yield look even that much more appealing.

MasterCard and bitcoin: say what?
As reported by Forbes on June 30, MasterCard has filed for a patent entitled "Payment Interchange for Use With Global Shopping Cart" that could enable it to act as the intermediary in transactions involving bitcoins. The Internal Revenue Service ruled in 2013 that bitcoins are property, so in bartering-type situations MasterCard could net itself a transaction fee when bitcoin is available to be used.

The U.S. Patent and Trademark Office hasn't granted MasterCard its patent yet, but this, too, demonstrates just how far-reaching the company's presence could go if it is approved. Many consumers, myself included, are still somewhat in the dark when it comes to what bitcoin will ultimately be used for, so for now I wouldn't factor this into MasterCard's valuation much, if at all. However, I would suggest keeping an eye on this possible patent as it could be worthwhile for MasterCard over the long run.

Intel notches a key smartphone win
Lastly, it's been perhaps the only area where Intel's beefed-up research and development spending hasn't yielded solid results, but the chipmaker announced that Samsung had chosen its first-generation multimode XMM 7160 LTE modem for its Galaxy S5 Mini.

Source: Intel Free Press, Flickr.

As Foolish technology specialist Ashraf Eassa noted this past week, this is the kind of win that could make Intel the No. 2 player in cellular technologies for smartphones, behind only Qualcomm. A single product win, though, doesn't make Intel's smartphone hardware segment a success. It will need consistent wins here, just as in its data center, tablet processing, and PC processing segments, if it hopes to grow its top and bottom line.

Source: Flickr user Chas Redmond.

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some telecom companies to your portfolio but don't have the time or expertise to hand-pick a few, the Vanguard Telecom Services ETF could save you a lot of trouble. Instead of trying to figure out which stocks will perform best, you can use this exchange-traded fund to invest in lots of telecom companies simultaneously.

Why telecom, and why this ETF?
The telecom sector is huge -- telecom operators rang up about $2 trillion in revenue worldwide last year, and the industry has the potential to get even bigger. Consumers are demanding more and better connectivity, which means new technologies and new equipment are needed. The mobile realm in particular is growing briskly, with niches such as mobile payments and security showing particular promise, while smartphones are spreading like wildfire in emerging markets.

ETFs often sport lower expense ratios than their mutual fund cousins, and the Vanguard Telecom Services ETF has an exceptionally low one of 0.14%. It also recently yielded about 3.7%. It has outperformed the world market over the past five years but lagged it a bit over the past three.

A closer look at some components
On your own you might not have selected Windstream Holdings Inc or Frontier Communications Corp as telecom companies for your portfolio, but this ETF includes them among its 31 holdings.

With a dividend yield of 9.9%, Windstream draws a lot of interest, as does Frontier, with its 7% payout. Not all big dividends are worthy of your dollars, though, as some are tied to shaky companies. Both of these companies have their share of critics: More than 13% of Windstream's shares were sold short as of late May, while more than 16% of Frontier's shares were sold short. But Windstream's stock is up some 41% over the past year and has averaged gains of 14% over the past five. Frontier's five-year average is just 6.7%, but it's up more than 60% over the past year.

What's going on with these companies? Well, both are telecom companies that have focused on the rural market and landlines in the past. That's not a promising field as more people switch to wireless communications, so the companies are working hard to develop wireless offerings for consumers and businesses -- and their strategies are bearing some fruit.

Frontier's last earnings report featured record net broadband additions, with market share growing in 91% of markets. It's still losing customers, but at a slower rate due to retention efforts. The company bought AT&T's Connecticut operations last year, boosting its customer base and extending its geographical reach. Windstream, meanwhile, is offering data centers and cloud-computing services, with its chief executive officer noting in May that its last quarter was "our best quarter ever in terms of enterprise sales." Its free cash flow is growing, but so is its share count, which shrinks EPS -- and debt is growing, too.

There are risks with both companies. Their fat dividends, for example, may end up trimmed if business slows. And Frontier's last earnings report reflects just that -- a pullback in both residential and business revenue, along with shrinking profits and net margins. Both companies, especially Windstream, also carry significant debt, which can constrain them and threaten dividends.

On the other hand, successful strategy shifts don't happen overnight. There's reason to be hopeful about the prospects for both companies, but they do present more risk than many other alternatives. Of course, their dividends can offset some of that risk -- as long as they last. (Both companies sport worrisome payout ratios.) If you buy into either, you should keep a close eye on its progress.

The big picture
It makes sense to consider adding some telecom companies to your portfolio. You can do so easily via an ETF. Alternatively, you might simply investigate its holdings and then cherry-pick from among them after doing some research on your own.

The world's largest carmaker, Toyota , is having a great summer in the United States. After a bumper Memorial Day weekend sale in May that pushed the month's sales up by 12.6%, the company reported strong results for June as well.

The sales momentum couldn't have been better timed. June's seasonally adjusted annualized rate, or SAAR, is projected to reach 16.3 million vehicles, and the month's average transaction price should be 1.4% higher than last year, according to Kelley Blue Book's estimates. Toyota's U.S. bosses are already seeing if it's possible to increase production to meet the increased demand. Let's find out what lies behind Toyota's current success.

Toyota Camry, Source: Toyota

Camry and Corolla -- America's most wanted
Toyota's consolidated June sales (including its Toyota, Lexus, and Scion brands) hit 201,714 units in he U.S., a 3.3% improvement from the previous year. The numbers get even more impressive once we adjust sales for the two fewer selling days in the current period as compared to June 2013. On an apples-to-apples basis, sales were up 11.9% compared to the year-ago period, marking the second consecutive month of double-digit sales gain. A lot of this increase is coming from the staples like Camry and Corolla.

Toyota Camry, which has been around for 31 years and is owned by 10.3 million drivers in the U.S., remained an ace performer in June. After earning the trust of Americans, it continues to be the most sold passenger vehicle in the country. Camry sales grew 13.4% in June to 40,664 units in the U.S. against the same period last year, beating its old competitor Honda Accord by a margin of more than 8,000 cars. It sold so fast that, on average, almost every minute an American buyer took home a Camry. 

Sales of the world's most popular compact sedan, Toyota Corolla, reached nearly 31,000 units, a growth of 17% compared to the June of last year. Of all the Toyota cars sold globally, the Corolla constitutes greater than 40%, and Toyota has crafted the latest model with care. The 2014 model has a sportier look and better fuel efficiency and the effect is visible in the sales numbers. In the U.S., year-to-date sales have increased 9.7% over last year to 174,354 units, ahead of Honda's Civic, which is up 5.3% with sales of 167,097 units. 

Both Camry and Corolla also saw plenty of fleet sales.

Lexus -- the company's blue-eyed boy
Sales of Toyota's Lexus luxury brand went up to 23,518 units in June, 10.1% higher from 2013. This is reportedly the brand's best June since 2007. Lexus passenger car sales are up 20% through the first six months, while utility vehicles have increased 14% year over year in the same period.

In the first six months of the year, the Lexus brand has grown faster in the U.S. than its European counterparts Mercedes-Benz and BMW and has narrowed its sales gap with both. In the first half of 2014, Lexus sales grew 17%, while Mercedes-Benz's sales were up 8%, and BMW's 12%, against the year-ago period. The sales gap between Lexus and BMW came down to 18,693 units, from 21,956 units, and the one with Mercedes-Benz came down to 24,428 units, from 32,958 units, in the first half of 2013.

Chart prepared by author. Source: Goodcarbadcar.net

Toyota's luxury vehicle sales in the U.S. could climb even higher once the midsize crossover Lexus NX 200t and RC sports coupe launch later in the year. According to Lexus vice-president and general manager Jeff Bracken, luxury crossovers and luxury sport coupes are "two of the hottest segments in the industry."

Lexus RX, Source: Lexus.

Crossovers and minivans
Toyota's utility vehicles did well, with Highlander SUV sales up 4.2% over last year to 11,555 units in June, and RAV4 up 12.9% to 23,465 units in May. RAV4 saw the fourth-highest sales in the highly contested compact crossover segment during the month and was barely 200 units behind the Chevrolet Equinox that held the third spot.

Toyota 4Runner, Source: Toyota.

Minivans also saw some success in the month. The 4Runner, a major draw in the large sport utility category, sold well in the U.S.; 5,761 units were sold in June, a 42% increase over the last year. 

Last thoughts
Toyota continues to impress in the U.S. Now that the industry is expanding, there's an even greater opportunity to grow sales. The solid June results are a testimony to the company's success across product categories and its perfect understanding of the market's pulse.

The year is halfway in the books, and investors have cheered the market's dramatic rise over the past year. After last year's astronomical climb, however, leading stock indices have been hard-pressed to repeat those gains this year.

The S&P 500 has posted gains of more than 6% so far, flirting with record highs and delighting Wall Street. Yet for global investors, gains haven't been so easy to come by: Germany's DAX has managed respectable gains so far on the year, even as Europe struggles for consistent economic growth. Asian markets, meanwhile, have taken a beating this year as China looks to keep up with high expectations for its fast-growing economy and investors wait for better results from Hong Kong's Hang Seng index.

Let's go around the world and take a measure of the market's health at the halfway point in 2014 -- and see what investors can expect from the globe's leading economies and stock indexes through the next six months.

Europe's economy is cold, but markets are heating up
Europe isn't the pinnacle of global growth, considering the continent's struggles since the recession. Countries on the eurozone's periphery continue to fight economic contraction, while Germany hopes to keep its growth churning behind its strong export sector. Recent data shows that France's economy could be slamming to a halt, as French manufacturing activity weighed on the eurozone in June and unemployment climbs. Remarkably, however, European stock indices have managed to keep pace with the S&P 500 in 2014 despite these troubles.

^GSPC data by YCharts.

Spain's IBEX has enjoyed a stellar year, outperforming the S&P even as the Spanish economy lags behind the eurozone. What's the catalyst? The country's slowly begun to crank the gears of recovery after years of high unemployment and economic downturn. Spain's Purchasing Managers Index, a measure of manufacturing activity, outperformed Germany's in June and reported faster expansion at a rate nearly two full percentage points above May's reading. While Spanish unemployment remains over 25% -- a drastic number -- that figure has declined in 11 straight months. It's not a victory for Spanish recovery just yet, but it's a sign that things are improving for one of the hardest-hit economies in Europe.

That bodes well for Germany and the DAX -- and for leading German stocks. Germany's economy relies on exports perhaps more than any other major economy in the world, and while Europe's largest market has kept up growth in the post-recession period, Europe's struggles have weighed on its major international companies. Germany's 0.8% first-quarter growth kept the eurozone out of contraction, and if hard-hit economies such as Spain and Italy can begin to turn around from the depths of recession, it will bode well for German exporters.

Volkswagen's 2014 Passat. Source: Volkswagen.

That's good news for German automakers in particular. Volkswagen is Europe's largest car-producer, and the company enjoyed 9.6% sales growth in Europe in May. While Volkswagen has made impressive gains overseas -- fast-growing China has emerged as Volkswagen's largest market -- Europe is a critical cog for this automaker. It's particularly important, as U.S. sales took a big hit for Volkswagen in June, declining by 22% year over year. Overall, new car registrations jumped by 4.5% across Europe in May, and VW and fellow European automakers -- and their investors -- will need that number to keep up in coming months.

Stocks aren't so hot in Asia
While Europe's stock indices have done well this year, it's been a different story for investors across the Pacific. Only South Korea's Kospi index has managed to post respectable gains near the S&P's level in 2014, while Japan's Nikkei 225, last year's feel-good story on the international market scene, has felt a painful reversal of fortune this year.

^GSPC data by YCharts.

What has weighed down Japan? Blame it on a mix of a slight slowdown and last year's big run-up. The Japanese economy's still in a good position, even as business confidence has declined in 2014. But with the Nikkei jumping more than 70% over the past two years, even adjusting to a more sustainable pace of growth has left investors taking profits from Asia's second-largest economy -- particularly after Japanese exports declined in May for the first monthly fall in over a year. Still, the trend's pointing up: Capital spending has picked up with the end of two decades of economic stagnation, boosting the country's growth above expectations so far.

With Tokyo preparing more aggressive military investment to counter China's influence, Japan's economy could continue to surge through the rest of 2014 -- and the Nikkei could see a turnaround, albeit not likely on last year's level -- particularly if the Bank of Japan launches further easing measures.

China, meanwhile, is looking to hang on to its 7.5% growth picture as the economy has slowed from its astronomical growth of the last decade. Manufacturing activity has picked up in China lately, as the country's PMI jumped to expansion in June from previous contractionary levels. However, that might not be enough for stocks, unless Beijing plans more aggressive stimulus measures of its own. Chinese corporate earnings and revenue projects are on the downswing, according to Bloomberg. The Chinese real estate market is under fire after booming in recent years, and analysts want more from Beijing to boost consumption.

As China's overall growth threatens to miss the government's 7.5% expectation for the year, Internet stocks still look like a strong bet in a market that's experiencing a wave of urban and middle class growth. Baidu enjoys 160 million mobile users a day on its search engine, and China's pivot toward domestic tech companies recently bodes well for this online giant. Mobile has emerged as Baidu's biggest opportunity: The Internet giant's seen impressive double-digit growth in both video content and mobile downloads in 2014, positioning Baidu to take advantage of the rise of a tech-embracing urban Chinese population. While Baidu's watched as rivals chip away at its PC market share, the company still holds on to more than 59% of the market overall. That leadership bodes well for the long term, and this stock's climbed nearly 70% in the past year.

Recovery ramps up
Overall, the world markets are still finding their footing in the post-recession period as economies look to ramp up recovery and growth. Germany remains Europe's best bastion of stability for investors, as the export-driven country's top international giants like Volkswagen look to make the most of markets like China. Over in Asia, the Nikkei and Hang Seng may be struggling in 2014, but both the Chinese and Japanese economies have momentum going forward, even in the former's struggling to keep up with high growth projections. As always, investors need to keep their eyes on the best companies around the world with the top business fundamentals -- but overall, the global economic recovery is making this year a good time for investors.

On Monday, the stock market suffered a post-holiday hangover, with major-market benchmarks giving up ground as investors seemed content to consolidate some of their gains from last week. Without a huge drop, however, plenty of individual stocks continued their upward trajectories and set new yearly highs, with more than 100 issues setting new marks on the New York Stock Exchange alone. Among them were Archer Daniels Midland , National Oilwell Varco , and Southern Copper , all of which managed to reach new heights and escape the day with at least modest gains.

Archer Daniels Midland roared ahead by 1.5% to an almost seven-year high after the agricultural giant spent 2.3 billion euros, or more than $3.1 billion at current exchange rates, to buy Switzerland's Wild Flavors, which makes a variety of natural flavors for companies selling food and drinks. For Archer Daniels Midland, the move adds to the company's existing flavor business, which ADM has said it wants to emphasize as a growth prospect for the long-term future. Archer Daniels Midland also pointed to some of its previous acquisition, which it argues will fit well with the Wild Flavors purchase and encourage more dependable earnings growth for years to come.

Source: National Oilwell Varco.

National Oilwell Varco inched ahead 0.2%, but it was enough to send the energy services and products company to a fresh all-time record high. What made today's move especially remarkable is that the energy sector generally hasn't kept up with the rest of the stock market over the past couple of weeks, as investors begin to worry about the potential impact of sustained higher gasoline prices on economic growth and spending behavior. Yet from a fundamental standpoint, National Oilwell Varco continues to see a big appetite for its equipment, with the company sporting a huge order backlog that promises to keep Varco busy for years to come. A recent spinoff has allowed Varco to focus more on its higher-margin businesses, and that has the capacity to help the stock climb even further if conditions in the industry remain good.

Southern Copper rose almost 2% as the copper producer got a vote of confidence from an analyst firm this morning. Many investors have been concerned that the copper miner faces higher costs from its mining activities, even as demand in copper hasn't risen at a healthy enough rate to support sharp increase in prices. Nevertheless, BMO Capital believes that future price increases could be in the near future, and Southern Copper's efforts to cut costs could well help avoid the margin compression that more bearish investors fear.

After reaching fresh new all-time highs ahead of the Fourth of July Holiday last week, the S&P 500 Index retreated today, as investors pared their optimism. Optimism was especially scarce from shareholders in Chesapeake Energy , Delta Air Lines , and Peabody Energy , which finished as three of the worst stocks in the 500-stock index Monday. The S&P, for its part, lost 7 points, or 0.4%, to end at 1,977.

Blame the weatherman for Chesapeake Energy's steep, 4.6% tumble today. Actually, that's not fair: blame the weather itself, which looks like it'll be cooler than most expected in the Midwest and Northeast in the coming days. That's great, right? More comfortable conditions, less need for air conditioning, lower electric bills...OK, I'm starting to understand why Chesapeake stock lost some ground today. Shares of the natural gas company are strongly correlated with natural gas prices, which cratered 4.1% Monday in light of the cooler forecasts.

Engineers work on a plane in Delta's fleet. Source: Delta blog

Delta Air Lines shed 4.4% today after the airline said it was sharply reducing the number of flights it would offer to Venezuela, from one per day to one per week. That's because the politically volatile country isn't letting Delta Air Lines repatriate the money it takes in from patrons in bolivars, the company says. In other words, investors aren't only worried about the newly relaxed flight schedule to Venezuela; the fact that Venezuela seems to be forcing Delta to keep those bolivars tied up abroad will likely strain relations and potentially encourage ill-advised Venezuelan investments.

Peabody Energy lost 3.7% on Monday after receiving a downgrade from Deutsche Bank, which reassigned Peabody shares as a hold from its previous position as a buy. Metallurgical coal was singled out as a particularly tough material to make a buck on, due to ongoing cost pressures. If there's a silver lining to be had, Peabody Energy is actually diversified into thermal coal, which it sells to utilities providers who in turn provide energy to everyday consumers. Unfortunately, that wasn't much of a comfort to Peabody shareholders today considering the cool weather forecast set to reduce consumer electric bills over the next week or so.

Image by Flickr user Eric Grossnickle

The Nook may be heading for the cutting room floor sooner than expected. Barnes & Noble  has announced that it will spin off its e-reader as a separate public company, probably in early 2015 . Barnes & Noble shares responded with a 7% leap  following the news, a bonus following the total 40% gain seen since 2014 began.

Investors responded positively to the news because the Nook has been looking like a failure for some time, with quarterly revenue decreasing more than 22% year over year and total fiscal revenue falling by 35.2% in 2013. While the Nook will be a public company, investor interest is unlikely; Nook has a slim chance of surviving as its own business as it faces declining demand and fierce competition in most areas except textbook sales.

Ultimately, this spinoff is a symptom of the problems that all e-readers are facing in the changing market, problems that could force even Amazon.com  and others to alter their approach.

Dominant e-readers face challenges
If e-readers have a future, it is probably through the most successful products like Amazon's Kindle line. Apple  is staying away from a dedicated reader device thus far. Kindle devices themselves brought Amazon about $3.9 billion revenue in 2013 .

However, even the Kindle's lifespan may be limited. The rise of the iPad, Kindle Fire, and other tablet computers has made the e-reader a little irrelevant. Apps for the Nook, Kindle, and many other e-reader are available on these tablets, and these apps are getting even easier to use. Why take two screens on vacation when you only need one? Some remain fans of the readability that e-ink offers in sunlight, but buying a separate device for that solo benefit is a tough sell. The latest Forrester  research predicts that e-reader sales will fall from 25 million sold in 2012 to 7 million sold in 2017 because trends like this.

Numbers also point to waning interest in e-books in general. Sales revenue has been flat, around $3 billion , for the past couple of years. Sony  has already given up on selling e-books in North America and has dropped its Reader line in favor of tablets. Amazon  is dropping prices on devices like the Kindle DX. Apple is keeping quiet  on its numbers, but has recently reached a settlement for its e-book lawsuit  and appears intent on providing Amazon with more app-based competition.

The rise of Netflix-like services
Another problem with e-books is the challenge provided by alternative services like Oyster and Scribd. Both of these companies offer a Netflix-like arrangement where you pay a monthly fee and get app-based access to a digital library -- 400,000 titles in the case of Scribd and 500,000 for Oyster. Consumers can also pay a little more and get services like Entitle , which offers new releases from major publishers like HarperCollins and allows people to permanently keep the books they choose.

All of these services are working on developing more contracts with big publishers, and their recent success may offer a reason why direct e-book sales are falling. Oyster started 2014 with a $14 million  funding round, and that was back when it only offered 100,000 titles, while Scribd appears on the path to an IPO. All companies in this group are sapping e-book revenue from big sellers.

In other words, placing big bets on the future of e-readers could be dangerous, and e-book revenue may not be as dependable as publishers or companies like Amazon wish. The market is more diverse than it was and could offer a second chance for floundering companies. If the Nook wants to survive the coming years, its solution might lie in one of these e-book alternatives.

It takes something different to succeed in business these days, and Apple and Amazon.com understand this. That's according to Gary Shapiro, author of Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses.

AMZN data by YCharts

Shapiro is president and chief executive officer of the Consumer Electronics Association, and has studied businesses for over 30 years. In that time, he's seen a dramatic shift in the speed and tactics companies need to act and react to a shifting marketplace. Ironically, these new-age tactics employed by Apple, Amazon, and others, date back hundreds of years to the ninjas of feudal Japan.

I spoke with Shapiro at the huge 2014 International CES in Las Vegas, where thousands of companies gather to show off their latest innovations. In this video, Shapiro explains how Apple and Amazon had leadership that was quick, team-oriented, and always willing to change plans.

As these and other successful businesses were rising in stature and gobbling up market share, they shunned the previous "me-too" copycat mentality. They blazed their own trails, and were able to test, get responses, and change quickly.

Looking for the next Apple and Amazon
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U.S. stocks retreated from the record high they set at the end of last week, with the benchmark S&P 500 declining 0.4% on Monday, while the narrower Dow Jones Industrial Average fell 0.3%. The technology-heavy Nasdaq Composite Index was down 0.8%. Among the biggest movers on Monday were two high-profile growth stocks: GoPro (+5.7%), and Tesla Motors (-2.9%).

GoPro's first-person-viewpoint video cameras are a favorite among extreme sports enthusiasts and the stock itself has provided investors with a wild adrenaline ride since it began trading less than two weeks ago. Through today's close, GoPro shares have risen 83% from their $24 initial public offering price. Given that stunning run-up on high volume and the dearth of volatility in the broad market, today's start of trading in options on GoPro's stock was highly anticipated; oddly, however, it turned out to be a relatively sober affair.

The Wall Street Journal reported that, as of 3:20 p.m. ET, only 24,000 option contracts had traded on Monday, representing rights on some 2.4 million shares of GoPro (one call (put) option contract represents the right to buy (sell) 100 shares). By comparison, 122,000 options on Twitter's shares changed hands on the first options trading session last November. Nevertheless, today's options activity appeared to reflect a positive bent in investors'/ speculators' outlook for GoPro's stock, with calls more active than puts by a factor of 2-to-1. Calls are a right to buy shares before a fixed date at a pre-determined price; puts are a right to sell shares before a set date at pre-determined price.

It's far from clear that the nearly 6% pop in GoPro shares today is related to the launch of stock options. In any event, I'm going to continue to caution fundamentally oriented investors who are looking at the stock: I like the product and the way in which the company is building its brand and following; however, at more than 56 times forward earnings per share (per data from Bloomberg), investors are setting are setting a very high bar for the company's performance. One thing is certain, though: This adrenaline ride isn't over -- expect more volatility ahead.

Tesla gets burned
The incident involving a Tesla Model S early on July 4 had all the ingredients of "great television": the theft of the car from a Tesla showroom in Los Angeles, followed by a high-speed chase through the city that ended with a violent crash that split the car in two and set it ablaze. Great television, perhaps, but a poor reason to make an investment decision -- which didn't stop "investors" from selling down Tesla's shares today, for a near 3% decline.

The story may have revived a fear that had been stoked by the significant media attention that two Tesla Model S car fires received last year. The reality is far from alarming, however: As Tesla remarked in March, "the odds of fire in a Model S, at roughly 1 in 8,000 vehicles, are five times lower than those of an average gasoline car and, when a fire does occur, the actual combustion potential is comparatively small." Despite these numbers, Tesla went the extra mile and added a titanium underbody shield and aluminum deflector plates to the Model S to further increase the level the protection and offered to retrofit existing vehicles free of charge (General Motors, take note).

The incident that occurred over the weekend is totally immaterial to the investment case for Tesla. That's not going to stop some investors from acting on this type of trivia; meanwhile, they were never concerned by the stock's stratospheric valuation -- at 70 times estimated 2015 earnings-per-share, it remains a genuine potential threat.

In a recent report, Barron's was the latest firm to recognize the investment value of NetApp . Until recently, the company's challenges in connection with EMC  and International Business Machines  have spooked Wall Street. Yet, as NetApp's investment value becomes realized, Barron's makes two key points regarding FlashRay and NetApp's hiring practices that could be telling for the future.

Weathering the storm
In recent months, NetApp has had to overcome challenges that many on Wall Street thought could cripple the company. Most notably, margins have been a concern. NetApp is the second-largest disk storage company by market share, behind EMC and before IBM, thus creating competitive concerns.

Yet, during the last quarter, NetApp was the only company of the three noted that actually gained market share in external and internal disk storage systems, a market that generated $7.3 billion. NetApp's market share grew 50 basis points to 11.7%, thereby answering fears regarding competitive pressure just fine.

The second big fear came after IBM announced that it would no longer be one of NetApp's storage hardware vendors.  IBM chose to focus on its hardware in hopes of driving growth in a segment with revenue that had fallen at a 20%-plus clip in recent quarters.

Therefore, NetApp's segment that manufactures company-specific equipment saw a 34% year-over-year loss in revenue during the last quarter. Albeit, since this business accounts for only 7% of NetApp's total revenue, the company has been fine with its high-margin disk storage business performing well.

Now its time to grow
With all things considered, NetApp has weathered a potentially dangerous storm quite nicely and is now looking to grow from the ground up. Barron's made an important observation in its recent research report, noting a 22% increase in the company's job listings, which follows job cuts of 1,500 of NetApp's 12,600 employees last year. 

But, with the disk storage space remaining challenged, and the company losing revenue from the IBM ordeal, why hire so aggressively? The answer may lie in its flash storage initiative, called FlashRay, a product that will launch later this year.

Source: The Register

FlashRay is a storage technology built from the ground up using NetApp's own technology, manufacturing, and research. This is a product believed to have 20 times better performance than traditional hard disk drive storage systems, with integrated file and volume management, complete data management, and application integration features.

NetApp won't be the first large company in its industry with a flash storage array, but FlashRay will finally give the company a product in high demand, where it has otherwise lacked presence. Due to the fact that flash storage arrays are not actual disks and have increased performance incentives for large enterprise customers, many believe that FlashRay could catapult revenue for NetApp in a short period of time.

Why FlashRay is different?
NetApp's lack of a fresh flash product has been a key concern of bears, as both IBM and EMC quickly acquired start-ups with flash technologies, which are already available in the open market. Yet, despite lacking this important element to the storage space, NetApp has remained competitive, notably growing its overall market share, while EMC and IBM have lost share.

Moreover, the fact that NetApp has taken its time to build FlashRay might actually work in its favor. For example, EMC's acquisition of XtremIO last year quickly made the company's all-flash system No. 1 in the market due to synergies with its other products. However, FlashRay is unique because it is its own operating system, which brings together all facets of flash storage with the company's existing storage technologies.

NetApp's former Vice President, Brian Pawlowski, explained the reason for in-house development of FlashRay very well. He said that acquired flash technologies might have scale-out capabilities, but could lack management integration when combined with an existing network of storage products. But, since FlashRay was built from the ground up with NetApp's existing products in mind, the flash service will have the capability for complete synergies with added benefits that cannot be created with acquired technology.

Foolish thoughts
Despite being late to the party, a fully integrated FlashRay gives NetApp a distinct advantage in the flash space. Investors should like the company's chances to steal even more market share from the likes of EMC and IBM, as its FlashRay initiative becomes a real product for enterprise customers. Moreover, the high expectations might provide reason for the recent hiring spree, and imply that a FlashRay launch is on the horizon. All of these are good signs for a stock trading at just 11.4 times forward earnings.

Verizon Communications wants to conquer the content delivery network market, a space currently dominated by Akamai Technologies . A content delivery network, or CDN, is a large system of servers deployed in multiple data centers. Internet giants -- such as Facebook or Yahoo! -- rely on CDNs in order to make their websites and applications load faster.

As the amount of downloadable objects -- such as media files, graphics, and documents -- increases on the Internet, CDNs will remain vital. E-commerce players without CDNs are prone to lose market share, as end-users are becoming increasingly intolerant toward slow sites. Aware of this situation, Verizon bought CDN provider EdgeCast on Dec. 2013. Now, seven months after the acquisition, the telecom giant is rolling out a new CDN service aimed specifically at e-commerce merchants. This clearly isn't good for Akamai. How exactly does Verizon plan to steal market share from Akamai? 

Source: Verizon.

The plan
Roughly seven months ago, Verizon bought EdgeCast Network. Although no official price tag was given, TechCrunch reported that Verizon payed more than $350 million for the company.

The acquisition allowed Verizon to gain more than 6,000 customers. But more importantly, it allowed Verizon to get direct exposure to the CDN market, which is expected to be worth almost $13 billion by 2019.

The EdgeCast deal
EdgeCast appears to have been the best choice for Verizon to gain CDN exposure, as the CDN provider tried to differentiate its service by providing additional value to its customers, such as providing a CDN just for e-commerce companies, or launching its own DNS routing service. Such a strategy was working well for EdgeCast. It was rated the third-best CDN player in the industry in 2009, and it turned EBITA positive in the second quarter of the same year.

The new service
Seven months after buying EdgeCast, Verizon is finally rolling out its own CDN service aimed specifically at e-commerce players. The new service appears to have been built upon Transact, which was EdgeCast's e-commerce offering.

To differentiate its service, Verizon is providing special features, such as analytics services. It provides a feature that reduces potential interruptions during the busiest times of the year, such as holidays. More importantly, it provides a suite of advanced content protection solutions, which include SSL encryption technology and geo-filtering.

The release is consistent with Verizon's plans to gradually gain more market share in the CDN market. Since the acquisition of EdgeCast last year, the telecom giant has undertaken a major expansion of its CDN network, adding extra presence in more than 20 cities around the world. 

Competing against Akamai
To date, Verizon has had a relatively small CDN customer base compared with Akamai. But this could change as Verizon continues to aggressively target online retailers.

Performance is essential in the e-commerce world, because customers do not tolerate slow sites. This is why online retailers are spending millions to create fast-running sites. The CDN budget of online retailers is likely going to continue increasing together with the size of the overall e-commerce industry.

Verizon's service threatens the dominance of Akamai, which owns one of the world's largest distributed computing platforms and is responsible for serving between 15% and 30% of all web traffic. Akamai is also one of the world's most profitable CDNs. Its relatively high operating margin has so far proved to be sustainable, as Akamai has been traditionally regarded as the fastest option among CDNs because of its huge network size. If Verizon decides to use an aggressive pricing strategy to capture market share, Akamai could eventually be forced to offer more discounts to retain key clients, which could hurt the company's profitability. 

Final Foolish takeaway
Aware of the continuous increase of web traffic, and the need of online retailers to provide a super-fast service to their end users, Verizon is releasing a special CDN for e-commerce applications. It is too early to predict if Verizon will be able to conquer this segment. So far, its strategy appears to be based on providing added value, rather than using an aggressive pricing strategy, to capture market share from Akamai. 

The Dow Jones Industrials  finally succumbed to gravity on Monday, falling 44 points and breaking a three-day streak of consecutive new all-time highs for the average. Yet even as nervous investors took profits after weighing the potential for future gains against the risk involved in the stock market, the Dow still managed to hang onto the 17,000 level. Instrumental in that effort were Johnson & Johnson  and AT&T , which were among the best performers in the Dow today.

Johnson & Johnson's 1% gain was almost a mirror image of the health-care giant's performance last week, when J&J shares actually lost ground even as the Dow rocketed to new highs. Investors have traditionally seen Johnson & Johnson as a defensive stock, with patients and medical professionals relying on its pharmaceuticals and medical devices even as consumers seek out its long line of over-the-counter products. With a solid history of dividend payments to shareholders, J&J inspires enough confidence among investors that the stock current fetches more than 20 times trailing earnings, despite the fact that its growth hasn't been as strong as it was in the past. Nevertheless, many people are impressed with Johnson & Johnson's pharmaceutical division, which has made some smart strategic moves to put itself among the leaders in the fast-growing industry.

AT&T gained half a percent as investors applauded an analyst's upbeat assessment of the Dow telecom giant's future prospects. AT&T has said that it intends to spend about $21 billion on capital-spending projects this year, as it seeks to expand and improve the quality of its wireless network across the country. Given rival Verizon's full takeover of its Verizon Wireless division, AT&T needs to answer the challenge that Verizon has made with upgrades to its service, and the analyst from Barclays believes that AT&T might well end up spending more than that huge sum on capital expenditures. Given its intended $48.5 billion merger with DirecTV, AT&T has some investors worried that it could become too profligate in its spending, building up debt when interest rates are expected to rise dramatically over the next few years. But given the huge amount that AT&T has been able to return to shareholders in the form of dividends, investors should be pleased at the notion that the telecom company believes it can earn better returns on investment in its own business than it will pay in interest.

Even though the Dow Jones Industrials fell back from their all-time record highs Monday, it's far too early to draw any conclusions about an extended downward move. Indeed, with the Dow having held onto 17,000, the market's bullish psychology appears to remain in full force at least for now.

Following last week's record finish on a blowout jobs report, stocks eased lower today as investors awaited the start of earnings season later this week. By the end of the day, the Dow Jones Industrial Average  had given back 44 points, or 0.3%, while the S&P 500 lost 0.4% and the Nasdaq fell 0.8%. Cyclicals and small caps led the fall, indicating that investors may believe that stocks have grown a little too richly valued as the S&P has gained 14% since the start of February. 

There were no major economic reports out today, but earnings season will pick up later this week as Wells Fargo reports its quarterly results on Friday and a slew of Dow companies will deliver their earnings next week. Last week's strong jobs report may have also prompted some selling as investors fear that the Federal Reserve will raise interest rates sooner than expected. The unemployment rate fell from 6.3% to 6.1%, basically reaching the Fed's goal of 6%, and Goldman Sachs said it now expects the rate increase to come in the third quarter of next year instead of Q1 2016. Analysts are expecting an increase in profits of 6.2% for the second quarter, but considering the strong economic data that's come in, earnings growth could easily top that.

Apple  shares finished up 2% today, hitting their highest level in nearly two years, and made small gains after hours amid reports that the company had hired an executive from Tag Heuer, pointing to an upcoming launch of the so-called iWatch. The iPhone-maker nabbed Patrick Pruniaux, the VP of sales and retail at Tag Heuer, just the latest addition to its executive team as it had earlier brought in a marketing exec from Yves Saint Laurent. Shares of Apple have risen lately on anticipation for the iWatch as well as the upcoming iPhone 6 and because of its recent acquisition of Beats Electronics. According to 9to5Mac, the watch has been tested by select professional athletes, has 10 sensors for functions such as heart rate, hydration, and blood pressure, and is expected to be released in October. With wearables seen as the next big frontier in technology, the success of the iWatch's release may determine the future of the company. 

Elsewhere, Kandi Technologies  shares finished 6% higher after the Chinese electric-vehicle maker reported $31.8 million in new subsidies from the Chinese government for a joint venture it has a 50% stake in. The windfall is based on sales of over 3,000 EVs between June and December 2013, and over 1,000 for the first quarter of 2014, and is the first subsidy the joint venture has received. CEO Hu Xiaoming said the payments will enable the company to accelerate its EV sales and its EV-sharing program. The announcement was a bone for investors to chew on, as the stock has fallen sharply from its peak amid an ongoing SEC investigation and some accounting concerns. Kandi will continue to be a momentum stock, but its EV-sharing program could be huge if the company wins more subsidies like today's.

Apple  has built up its empire as a consumer company. Over the past several years, however, the company has gradually been making inroads into the huge enterprise market as well. This started with phones and tablets at first, and now a new report commissioned by VMware  claims that Macs are also gaining on Windows PCs in enterprise environments. Let's take a look at what Apple is up to in enterprise, and what this might mean for competitors such as Microsoft .

The numbers
On the first-quarter conference call, Apple CEO Tim Cook shared a slew of impressive statistics regarding Apple's recent performance in enterprise. The iPhone, which is often Apple's entry point into enterprise, is used in 97% of Fortune 500 companies. Numbers for the iPad were even higher at 98%, and Cook added that 90% of tablet activations in corporations are iPads. Also, among business application activations, 90% were on Apple's iOS operating system.

Through a survey of IT administrators, VMware has found increasing enterprise support for Macs as well. According to VMware's report, 66% of businesses are already using Macs in the workplace today. One notable example is Cisco, at which 25% of company-provided notebooks are MacBooks, according to the Wall Street Journal. Mac penetration in enterprise might get an additional boost this year, as many companies are finally investing in hardware updates thanks to Microsoft's ending support for Windows XP.

The supporting trends
It took several emerging trends to slowly challenge Microsoft's long-standing and dominant position throughout enterprise IT. One of these trends is BYOD, or bring-your-own-device, in which companies provide support for employees to use their own personal devices to access corporate data and applications. BYOD has been around for several years, and Gartner estimates that by 2017, half of all employers will actually require employees to provide their own device for work purposes. Given Apple's popularity in the consumer market, BYOD makes for an easy entry into the enterprise world as well.

A second supporting trend has been the increasing availability of enterprise-grade web and mobile applications that provide functionality that was previously only available in traditional, on-premise software. Forrester Research estimates that software-as-a-service is growing 20% year over year, and growth rates for mobile applications are not far behind. Furthermore, according to Good Technology, which provides mobile security software, custom mobile applications built internally by enterprises are the fastest growing category of mobile applications, with 52% quarter-over-quarter growth.

Finally, for those applications that do not yet have adequate cloud or mobile versions, there is virtualization. Companies such as VMware provide the ability for a single application or for a whole desktop environment to be delivered from a server and run in a virtual machine on different devices, driving down the need for dedicated PCs that run Windows. VMware has been investing heavily into its end-user virtualization business and believes that this will be one of the major drivers for its continued growth in the coming years.

What this means for Microsoft
With Apple's performance in enterprise so far, and the continued investments it's making there, Microsoft might at first look to be in for a rough time. The giant from Redmond is not sitting still, either, as its new mantra of "cloud first, mobile first" suggests. In the last several months, Microsoft made several moves that would have previously seemed unimaginable, such as releasing Office for the iPad and reportedly waiving Windows licenses for certain phones. It is also quickly becoming a major player in the enterprise cloud space.

Given the rapid rate of technological change, it was perhaps inevitable that Microsoft's stranglehold on enterprise would eventually loosen. However, considering the size and the growth of the enterprise market, as well as Microsoft's attempts to adapt, Apple's growing success in enterprise will not necessarily mean decreased revenue for Microsoft.

In conclusion
Apple has been making inroads into enterprise environments, and it is starting to see a lot of penetration there for its phones, tablets, and, increasingly, notebooks. Several trends, such as BYOD, the growth of web and mobile applications, and virtualization are helping this to happen and to continue down the line. While this is certainly good news for Apple, it does not necessarily spell doom for the enterprise incumbent, Microsoft, which is itself adapting with new cloud and mobile strategies.

Fresh after passing 17,000 points for the first time ever last week, the Dow Jones Industrial Average  dropped 44 points Monday, just as the corporate earnings season is about to kick off.

1. Apple stock ratings up after iWatch moves
iCar, iTV, iBoat ... if there's a word that you can put a lowercase "i" in front of, analysts have been speculating whether Apple will revolutionize it. Even your tech-challenged mother has been expecting that product to be an "iWatch" lately, but shares of Apple rose 2% Monday as the company actually made progress on one.

Following rumors from last week, Apple confirmed that it just hired Patrick Pruni Pruniaux, the VP of sales and retail at timekeeper Tag Heuer, owned by the publicly traded luxury-goods giant LVMH. Despite all your efforts to check LinkedIn, Pruniaux doesn't have an exact title yet in Cupertino -- but he's expected to launch Apple's "smartwatch" campaign.

The takeaway is that while you've been on the beach with Jimmy Buffett playing on repeat, Apple's been busy. The company recently hired the former Burberry CEO to run its only retail operations. And Apple shares were also boosted Monday, after research firm Pacific Crest raised its price target on the stock (expecting it to reach $100) and a popular Wall Street Journal article talked about CEO Tim Cook's strategy for Apple's growth.

2. Grain giant ADM goes after a Swiss sweetener company for $3 billion
Pour some sugar on me ... actually, make that artificial sweetener. Enormous grain distributor Archer Daniels Midland is paying $3 billion to buy a Swiss ingredient maker, Wild Flavors. That's the biggest check ADM's ever written for an acquisition, but it's a necessary move to get away from the crazy fluctuations of the commodities markets ... and the specialized sweeteners that Wild Flavors makes are way more profitable.

ADM's commodity business is about harvesting and selling grains, and the company has people hacking away at wheat straws and corn stalks from Mongolia to Madagascar. The problem with those lame, plain food commodities like corn, cocoa, and wheat is that they're boring and can't be differentiated from other providers. That means it's a low-margin business.

So it's about "ingredients," not commodities. Profits based on commodities are subject to the whims of a cocky trader at the commodity exchange in New York -- or, worse, an intern trader who has something to prove.

Starbucks cappuccinos and Clif Bars are the fancy products that this new company of ADM's creates ingredients for. It's a higher-margin business and less prone to swings in the commodities markets. Investors "dig" Monday's announcements -- the stock's up 1.6% for it, even though it will mostly be paid for in fresh, new debt.

As originally published on MarketSnacks.com

There's very little doubt that Intel is the world leader in ramping advanced semiconductor manufacturing processes at good yields well before its primary foundry competition, most notably Taiwan Semiconductor . Even so, a poorly kept secret is that Intel actually builds a good number of chips outside its own factories.

What does Intel build externally?
Take a look at the details of Intel's 2014 and 2015 PC platforms:

Source: VR-Zone China.

The processor and graphics, as well as the platform controller hub, or PCH, are built at Intel's factories. The processor and graphics are typically on the latest and greatest manufacturing technology, while the PCH is usually used to fill older manufacturing plants. However, most -- if not all -- of the remaining chips mentioned in the remainder of this article are built externally.

How do you know that?
If you go to Intel's ARK page -- which is a database of all current and past products -- you can look up some of these products. For example, if you do a search for the Clarksville LAN chip, you'll see the following:

Source: Intel.

Notice how the listing says that the lithography of this chip is 40-nanometer? Intel doesn't have a 40-nanometer process (it has a 45-nanometer process), which means that Intel is building this chip at a third-party foundry, most likely Taiwan Semiconductor.

Intel will begin to move volume to its own factories
Intel's connectivity combos, its cellular modems, and other products are built on similar low-cost, external processes. However, this isn't bad news because this represents volumes that Intel can eventually bring into its own factories. Further, bringing in many of these products presents an opportunity for integration onto its main processors.

In fact, an example is what Intel did with its Atom C2000 micro-server products. The company integrated Ethernet controllers onto the system on a chip, whereas in its other non-SoC server products, the Ethernet controllers are separate and built externally. Logically, it follows that more of Intel's products will integrate this functionality and that eventually these external volumes will be moved internally.

Intel's Avoton integrates Ethernet. Source: Intel via TechReport. 

More relevant, though, is that Intel is planning to move its cellular and connectivity assets in-house to integrate them into future mobile system-on-a-chip products. Once this takes place, a pretty significant amount of volume moves away from the foundry landscape and helps to drive more volumes for Intel. It also doesn't hurt that Intel's manufacturing technology is typically ahead of the foundries', which could help differentiate on performance and power.

Foolish bottom line
Intel is undergoing a very interesting transition as it transforms into much more than a PC microprocessor company. Expect over the next several years for Intel to be able to build a wide variety of products on its manufacturing processes. This will not only help drive more volume into Intel's factories, but it will also help Intel become much more flexible in the types of products that it can ultimately build, either for itself or for foundry clients.