Crumbs Crumbles, and Apple Poaches a VP

Go ahead and treat yourself to a midsummer shandy. After stocks dropped big last week on some out-of-the-blue European bank fears, you deserve it.

The stock market winners...
If you're a big fan of the iCulture, then you're probably bored of your iPhone already and ready to move on to the next big iThing. Well then does Apple CEO Tim Cook have big news for you. Shares of Apple (NASDAQ: AAPL  ) rose last week on word that Apple is more aggressively pursuing an iWatch thanks to some key recent hires.

That's right -- the company confirmed rumors last week that it had snatched up Patrick Pruniaux from the time-keeping brand Tag Heuer. Pruniaux was the high-up VP of sales and retail at Tag, which happens to be owned by the luxury goods firm LVMH. Although Pruniaux is expected to lead the roll-out of the smartwatch initiative in Apple land, it's not known yet what his exact role will be.

Right under your nose, Apple has been slowly building up its iWatch go-to A-team in 2014. Cupertino also hired the former CEO of Burberry to add some glam to the company's retail locations. It's no wonder research firm Pacific Crest raised its price targets on Apple stock this week. And soon you may be able to read about news like that on your iWatch.

...and stock market loser
Even if you don't have a sweet tooth, it would be hard to miss the most sugar-fueled story on Wall Street this past week -- the crumbling of the Crumbs Cupcake empire. While the dessert chain's stock was officially delisted from Nasdaq the previous week as its share price dropped to pennies, the company officially closed all its retail locations on Tuesday. Now its focus turns to potential bankruptcy measures.

So what was the problem? A few things -- cupcakes aren't a proprietary product (anyone can make them), the company didn't offer enough additional items (like muffins or fruit), and most of all, all trends must come to an end (just think of bell bottoms or anything else your parents used to wear).

The major business-related driver of Crumbs' demise was overexpansion, similar to what ate up Krispy Kreme just 10 years ago. Just a month after its June 2011 IPO, sales at Crumbs had fallen 6% and the CEO soon resigned, yet the company continued to aggressively expand beyond 50 stores in 10 states despite the slowing demand. The result? Just last year, Crumbs posted a $20 million loss and hasn't recovered since.

Alcoa kicked off the earnings season strong
Not only is it summer grillin' season, it's now officially corporate earnings season. Just like every quarter, aluminum-mining giant Alcoa (NYSE: AA  ) kicked things off with an impressive $138 million in profits (after a major loss in the first quarter), thanks to its recent cost-cutting binge. This week is all about bank earnings, which began Friday when Wells Fargo (NYSE: WFC  ) announced a nearly 4% gain in profits despite lower revenue.

The Fed made a big stimulus announcement
How do you get through the brutal Washington, D.C., summer humidity? With juicy details about the Federal Reserve's stimulus plans. The Fed released details from its June policy setting meeting that revealed the central bank plans to end its "quantitative easing" stimulus measures (long-term bond purchases to keep interest rates low, encouraging borrowing) as early as October. Although Wall Street loves it some stimulus, the news was expected.

As originally published MarketSnacks.com

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