The Apple-IBM Deal Has One Clear Winner: You

You may remember the famous "1984" commercial introducing Macintosh personal computers. In the ad, "Apple" is an iconoclastic young heroine who hurls a hammer at a giant screen broadcasting "Big Brother" (IBM) lecturing to a legion of followers.

Indeed, Apple Inc. (Nasdaq: AAPL) vs. International Business Machines Corp. (NYSE: IBM) was one of the bitterest tech rivalries of the past 30 years.

But instead of David battling Goliath to the death, the two are now joining forces in a bold new pact.

It's a good deal for both companies... And today I'll reveal which stock will end up as the better buy - and make it a great deal for you...

Why IBM Is "Back"

At the time of "1984" - and of the 1981 newspaper ad in which Apple "welcomed" IBM to the PC marketplace - Big Blue was the "Goliath" of the computer industry, a global giant that had already been around for decades. It catered to Fortune 500 companies and government agencies that needed industrial-strength computing.

"David" was a brash Silicon Valley startup whose PC breakthroughs appealed to individuals and small companies. It was the go-to company for creative types like graphic designers and photographers.

The tech world has changed in innumerable ways since the 1980s - we no longer talk about IBM "clones" anymore, for one thing - and both of these companies are now true corporate titans.

In fact, by market value, Apple is the largest company in the world.

And while IBM has since sold off its PC business to Lenovo Group Ltd. (OTCMKTS ADR: LNVGY), it remains a major force, especially in the so-called "enterprise" market. Its huge corporate and government clients - including 80% of the Fortune 500 - pay dearly for IBM's high-performance computing services.

IBM counts some 1,000 universities and 2,215 companies as business partners. Its list of global customers runs dozens of pages and includes some of the world's largest organizations.

In recent years, IBM has invested more than $24 billion to bolster its offerings of Big Data analytics; you likely know about its marquee Big Data computer, the "Jeopardy!"-winning Watson. It's also spent roughly $7 billion on cloud-computing initiatives.

And it boasts what may be the world's largest suite of software and services operations. Just in this year's first quarter, IBM's sales of software and services totaled some $15 billion.

Add it all up and you have a sprawling worldwide company that is involved in virtually every aspect of corporate computing.

But one area in which it has a glaring weakness is the fast-moving mobile world. IBM is a virtual no-show in smartphones and tablets.

And that's where this historic agreement comes in. Instead of launching its own mobile division, IBM has found a new best friend in the mobile world's clear technology leader.

Completing the Puzzle

Through the partnership, which was announced last month, IBM will use its highly capable sales force to sell iPhones and iPads to its corporate customers. IBM will also develop cloud services for Apple's iOS mobile operating system.

For its part, Apple will be developing and selling business apps on its App Store. It will also be offering tech support for its mobile devices through a special corporate AppleCare program.

It's a deal that addresses both companies' weaknesses: IBM's deficit in mobile solutions and Apple's lackluster performance in the corporate sector.

Apple, of course, turned the mobile industry on its ear back in 2007 with the launch of the iPhone.

Smartphones had existed for years. But the iPhone was so innovative - it played music, searched the Web, took photos and video, and served up hundreds of apps - that its release can be considered the device's birth.

And Apple's success in this area shows no sign of slowing down. In the first half of fiscal 2014, Apple sold nearly 94.75 million iPhones; compare that to the 85.22 million sold in the first half of 2013.

In the meantime, the company makes the only true enterprise-class tablet computer, the iPad. That means the device is sophisticated and tough enough to pass the rigorous requirements of Fortune 500 companies, top universities, and federal agencies.

In the last two quarters, Apple sold nearly 40 million iPads. That's an impressive number, but iPad sales are slowing; they were off 9% in the most recent quarter.

That's one of the reasons I think the recent Apple-IBM partnership is such a great deal for both of them. What we have here is the world's best enterprise sales channel throwing its weight behind the top enterprise tablet.

But that's not the only thing that makes this deal so intriguing...

Apple's Best Growth Opportunity

While the team-up of IBM's sales force and Apple's devices is one for the ages, I don't think it's going to move the needle on mobile sales that much - at least not immediately.

Here's where I think the meat of the deal is: IBM and Apple have a goal to create more than 100 easy-to-use mobile apps that simplify how a wide range of professionals work.

And this part of the deal is being nearly ignored by Wall Street and the mainstream media, because they don't understand just how important the App Store is right now.

The App Store is Apple's fastest-growing product line. The company reports App Store sales as part of its iTunes software category, sales of which grew 15.4% to $4.5 billion in the most recent quarter. Compare that to sales growth of 10.6% for iPhones.

Apple CEO Tim Cook says the App Store is the company's key driver right now. To date, the App Store has had some 75 billion downloads.

Expect the first round of IBM-fueled business apps to be available this fall when Apple releases the newest version of its mobile software, iOS 8.

The apps will focus on IBM's expertise in analytics, data security, and device management. Basically, the apps will combine IBM's enterprise-level computing with Apple's elegant and easy-to-use consumer products.

As part of the alliance, IBM said its employees will provide on-site support and service for Apple products. The new system will be based on the AppleCare service sold to individual consumers and small businesses.

IBM said it plans to make more than 100,000 employees available to the Apple initiative. That's more than twice the size of Apple's total workforce.

I have been an AppleCare customer for many years and find this aspect particularly alluring. One of the reasons I buy a new MacBook every three years is to keep my AppleCare support current.

If IBM's technicians can provide that same level of service, they will have corporate mobile customers for life.

Here's the Winner, and Why

Clearly, this is a great deal for both firms. It unites the best of both: IBM's Fortune 500 muscle with Apple's mobile leadership and innovation.

But if I had to choose between the two stocks, I'd go with AAPL every time.

Yes, IBM is a great company. But as we've discussed in the past, it's in the midst of a turnaround that may take several more quarters to play out.

Apple, on the other hand, has enormous momentum behind it - and the IBM pact is but one of several factors that will propel Apple's stock going forward.

Remember, this is a company that recently announced $30 billion in new stock buybacks and an 8% increase in its dividend.

It also recently completed a 7-for-1 stock split. Since hitting a two-year closing low in April 2013, AAPL is up 75%.

The stock trades at roughly $98.30 a share. I'm still projecting a split-adjusted price of $142.85 by mid-2016.

Yes, that's an aggressive projection for this former "David."

But Apple has proven repeatedly that it can continue to generate massive profits - and that it is not afraid of picking fights with other tech companies when such rivalries are to its advantage. Recall the "Get a Mac" campaign of 2006-2009 that took on PCs from Microsoft Corp. (Nasdaq: MSFT).

And that means Apple is the kind of strategic growth stock you can count on to help build your net worth for the long haul.

Comcast's latest location: on campus

NEW YORK (CNNMoney) If young people get hooked on Comcast cable in college, perhaps they'll pay the company for cable when they graduate.

That's one of the theories behind Comcast (CCV)'s introduction of a streaming TV service on five college campuses this fall. The service supplements the old-fashioned way students who live in on-campus housing watch TV: by plugging a TV set into the dorm room cable pipe.

Comcast promoted the new option, which it calls "Xfinity On Campus," in a news release on Thursday, ahead of the fall semester. It will be included with resident students' room and board, just like traditional TV hook-ups have been, and will initially be available at the University of Delaware, Drexel University, Bridgewater College, Emerson College, and Lasell College.

Executives say they can rapidly expand the service to other campuses -- there are hundreds of colleges and universities in regions of the country where Comcast operates.

Comcast and other companies that provide cable TV on college campuses know they have to adapt to young peoples' changing media habits. In campus settings, especially, young people want to be able to watch TV shows on laptops and smartphones.

That's why "Xfinity On Campus" is partially seen as a response to subscription services from Netflix (NFLX, Tech30), Amazon (AMZN, Tech30) and Hulu. Those only let people watch on-demand TV, while Comcast's service includes an on-demand library plus a bundle of live TV channels, including ESPN, CNN, Comedy Central, MTV, and AMC.

Crucially, the Comcast service also extends at least partially off-campus: according to Comcast, students "can use their university credentials to authenticate and access online programming that's part of their subscription via TV Everywhere websites and apps such as WatchESPN and FXNOW."

Comcast's service might also be a response to password-sharing, which has been a concern for the owners of channels like ESPN that have popular apps.

  Comcast: Poor service, good stock

Down the line, Comcast will add a recording function to the on-campus streaming service, so users can record live TV and watch it later via ! the cloud.

A few years ago a startup called Tivli -- now called Philo -- started to test a streaming TV service at Harvard and a handful of other campuses. Its product works on top of a university's existing cable provider.

Week in FX America – Loonie under part-time pressure

Canada's unemployment rate drops to +7% Job growth all part-timers Gold traction questionable

While varying degrees of geopolitical tensions whipsaws investors, a paltry net gain of 200 jobs in Canada in July is pummeling the loonie bulls as their labor market continues to misfire. The street was looking for a healthy reply to June's disappointing net loss of -10k jobs. They were not even in the same ballpark on the headline. The only reason the level of employment did not fall again last month is because a +60k surge in part-time work was offset by a highly disappointing loss of – 59.7k in full-time work. This trend is not new – Canada is rapidly becoming a nation of part-time employment and a scenario that is worrying authorities. As noted by many, that if Governor Poloz at the BoC was operating under the dual mandate of inflation and unemployment, similar to that of the Fed's, Canadian policy makers would be considering easing their already record low monetary policy. Instead they will be sticking to their neutral bias indefinitely amid concerns about slack in the economy.

The scary headline is that in the past 12-months Canada has lost -3k "full-time jobs," while "part-time" employment has increased by +119k. Gone too is its manufacturing base and now replaced by a service sector. Do not be fooled by the drop in the headline unemployment number by one tick to +7%. The decline only occurred because the participation rate fell to +65.9% from +66.1%, a thirteen-year low, as +35k disillusioned job hunters gave up and left the labor force.

It was not a surprise to see USD/CAD rally hard after the release to it week's highs, only stopping ($1.0973) due to some deep dollar offers between there and the psychological $1.1000 handle. Corporate demand for USD has been reported raising their bids to above the $1.0900 figure. Depending on how the commodity landscape plays out on the back of geopolitical tensions, the loonie remains better offered on USD pullbacks outright while underperforming on some of the crosses.

Commodities flounder for now

The natural resource sensitive currency is finding little love from commodities. Crude is rounding off the week, narrowing its losses (WTI $97.70), following the US airstrikes in Iraq and also aided by the drop in Thursday's US weekly claims headline print (+289k vs. +305k). Gold is trading flat ($1,312) after earlier hitting its best levels in three-weeks. The yellow metal is finding it difficult to stay within shouting distance of the recent highs despite geopolitical tensions. Firmer US data will continue to work against additional metal gains, with concerns that Ms. Yellen and company at the Fed will move more quickly to shift its interest rate policy.

What to Expect Next Week

Central banks are done for a while, but the market will get to hear from Carney midweek. The BoE will publish its forecasts for growth and inflation and investors will be looking for clues on the timing for the U.K.'s first post-crisis rate hike. Aussie business confidence data will kick-start the week down-under, while the German ZEW economic sentiment will open the European session. Ahead of U.S. consumer sentiment rounding out the week, the market gets a peek at U.S. consumer appetite from its retail sales data.

WEEK AHEAD

* CNY New Yuan Loans
* JPY Gross Domestic Product
* USD Advance Retail Sales
* GBP Bank of England Quarterly Inflation Report
* GBP BOE's Governor Carney speech
* EUR German Gross Domestic Product
* EUR Euro-Zone Gross Domestic Product
* GBP Gross Domestic Product
* USD U. of Michigan Confidence

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Forex Markets

Originally posted here...

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For College Students, Credit Cards Can Be a Prereq for Life

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Incoming college freshmen receive dozens of warnings:

Mom and dad caution them to not get carried away with extracurricular activities and instead focus on their grades. Older siblings kindly suggest avoiding any beverage with the word "jungle" in the name. Financial experts yell, scream and throw their arms in the air about avoiding credit cards. While jungle juice should be avoided, there is a case for most college students to sign up for a credit card. Students who describe themselves as impulsive, spenders or forgetful may need to wait. Here are three reasons why a credit card will set them up for a healthy financial future. 1. Credit Cards Help Establish Credit History A credit card is a simple tool to both establish credit history and begin working toward a good credit score. Student loans help establish credit and can positively impact a credit score. However, part of Fair Isaac's (FICO) FICO scoring model depends on diversity of credit. And responsible use of a credit card -– making on-time payments, for example -– is a simple way to increase a credit score. Credit cards also let students without loans establish their credit and spend four years proving they are responsible borrowers before graduation. Lest we forget, recent grads who don't want to return to their parents' basement will need a credit score to get their own apartment or house. Parents concerned their child can't handle the credit limit associated with a credit card should consider having their child apply for a secured card to prove their responsibility before upgrading to the real McCoy. 2. Students Don't Always Have Cash Some financial experts advise using cash to avoid debt because mindlessly swiping plastic doesn't register as spending money. Except cash is quickly becoming a relic of the past. Plenty of young men and women are used to debit cards and use apps like PayPal or Venmo to pay back a friend instead of cutting a check or getting cash out at the ATM. If students don't have quick access to an ATM on campus, a credit card will save them if they're in a bind. 3. Online Purchase Shouldn't Use a Debit Card College students are used to buying everything online. Unfortunately, the rise of technology also led to an increase in fraud and identity theft.

Dow Erases 2014 Gain Amid Global Selloff as Exxon Tumbles

U.S. stocks joined a global selloff, erasing the year’s gains in the Dow Jones Industrial Average, as Exxon Mobil Corp. to Micron Technology Inc. tumbled amid weaker corporate results.

Exxon and Murphy Oil Corp. dropped amid concern over output. Micron slid 6.1 percent after earnings from Samsung Electronics Co., the world’s biggest smartphone maker, trailed estimates. Nike Inc. declined 3.1 percent as its European rival Adidas AG slashed its full-year forecast. Sprint Corp. tumbled 5.3 percent, leading losses among phone stocks as France’s Iliad SA offered to buy a stake in T-Mobile US Inc.

The Dow fell 317.06 points, or 1.9 percent, to 16,563.30 at 4 p.m. in New York, for the largest one-day retreat since Feb. 3. The Standard & Poor’s 500 Index slid 2 percent, the most since April 10, to 1,930.67. The gauge dropped 1.5 percent in July, its first monthly decline since January. The Nasdaq 100 Index lost 2.1 percent. The MSCI All-Country World Index tumbled 1.5 percent for its worst loss in almost six months.

“The Fed is stepping out of the way and the market’s valuation is high enough that people are quick to take profit,” Wayne Wilbanks, who oversees $2.5 billion as chief investment officer at Wilbanks, Smith & Thomas Asset Management LLC in Norfolk, Virginia, said in a phone interview. “You are going to get more days like today, where investors are more trigger happy, quicker to liquidate. Everybody knows a correction is coming and it will come.”

The S&P 500, which is up 4.5 percent this year and reached a record on July 24, has gone without a 10 percent correction since 2011. It trades at 17.6 times the reported earnings of its companies, near the highest level since 2010.

The benchmark index had climbed 0.5 percent in July through yesterday as companies from Facebook Inc. to Chipotle Mexican Grill Inc. reported a surge in profit, while Time Warner Inc. rallied as Rupert Murdoch’s 21st Century Fox Inc. made a takeover offer.

Market volatility is rising after the S&P 500 ended its longest stretch of calm since 1995. Including today, the index has posted gains or losses of more than 1 percent three times in the past two weeks, compared with none during the 62 days through July 16, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, known as the VIX, surged 27 percent today to 16.95, the highest level since April 11.

The S&P 500 closed below its average price over the past 50 days for the first time since April. More than 7.9 billion shares changed hands on U.S. exchanges, the highest level since June 27.

Fifty S&P 500 companies report quarterly earnings today. About 76 percent of those that have released results this seasons have topped analysts’ estimates for profit, while 66 percent have exceeded sales projections.

Global equities fell today amid weaker-than-projected earning from Europe and Asia. Deutsche Lufthansa SA and Adidas were among European companies sliding as they cited unrest between Russia and Ukraine for dimming growth prospects.

Banco Espirito Santo SA plunged by the most on record and the bonds slumped after the Portuguese lender was ordered to raise capital following a 3.6 billion euro ($4.8 billion) first-half net loss.

“Maybe the market is getting a little bit tired here,” David Chalupnik, the head of equities at Nuveen Asset Management in Minneapolis, said by phone. His firm runs about $120 billion. “It’s more concern around Europe. We’ve had an extremely easy monetary environment for the past six years. When that changes, it’s going to cause a lot of anxiety.”

Concern grew that the improving economy may force the Federal Reserve to raise interest rates sooner than expected.

U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the central bank’s view that a first-quarter contraction was transitory. Data today showed fewer Americans filed applications for unemployment insurance benefits over the past month than at any time in more than eight years, signaling employers are hanging on to workers as demand improves.

“The Fed may have to change course sooner than expected if reports continue to show the economy is gaining some strength,” Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co., which oversees $110 billion, said in a phone interview.

The Fed yesterday cut its monthly bond buying to $25 billion in its sixth consecutive $10 billion reduction. The Fed’s Open Market Committee reiterated that it’s likely to reduce bond buying in “further measured steps” and to keep interest rates low for a “considerable time” after ending purchases.

The central bank said slack in the labor market persists even though the economy is picking up. Data from Washington tomorrow may show companies added 231,000 jobs this month, according to the median economist estimate.

Investors also watched developments in Latin America. Argentina missed a deadline yesterday to pay $539 million in interest after two full days of negotiations in New York failed to produce an accord with creditors from its last default in 2001. A U.S. judge ruled that the payment couldn’t be made unless those investors, a group of hedge funds led by Elliott Management Corp., got the $1.5 billion they claimed. Standard & Poor’s said Argentina is in default.

“When events like this happen, investors try to figure out whether this is an isolated occurrence or the first domino in a chain,” Lawrence Creatura, who helps oversee $350 billion as a fund manager at Pittsburgh-based Federated Investors Inc., said in a phone interview. “In the early moments there is always a bit of uncertainty as to which we have on our hands.”

All 10 S&P 500 main industries declined as energy, financial, phone and health-care companies fell at least 2 percent. Exxon, Nike and American Express Co. led declines in the Dow, slumping more than 3.1 percent.

Smaller companies tumbled as the Russell 2000 Index sank 2.3 percent. The measure has dropped 3.9 percent since July 14, one day before the Fed said in its Monetary Policy Report that valuations for smaller biotechnology and social media stocks are stretched.

The Dow Jones Internet Composite Index declined 2.3 percent, with TripAdvisor Inc. falling 5.2 percent. The Nasdaq Biotechnology Index plunged 2.6 percent.

Exxon tumbled 4.2 percent for the largest drop since August 2011. Oil and gas output dropped 5.7 percent to the equivalent of 3.84 million barrels of crude a day, the lowest since the third quarter of 2009, according to data compiled by Bloomberg. Exxon had been expected to post daily output equivalent to 3.96 million barrels, based on the average of six analysts’ estimates.

Murphy Oil dropped 6.9 percent. The oil and natural gas company lowered its full-year production forecast as second-quarter earnings trailed analysts’ estimates.

Micron Technology, the largest U.S. maker of memory chips, slumped 6.1 percent. The shares have rallied 40 percent this year. Samsung sank 3.7 percent in Seoul as it posted the lowest quarterly profit since it became the largest mobile-phone producer in 2012.

Kraft Foods Group Inc. lost 6.4 percent after reporting second-quarter sales of $4.75 billion, missing the average analyst projection of $4.83 billion.

Yum! Brands Inc. slid 4.9 percent. The owner of Pizza Hut and KFC said it cut ties with meat supplier OSI Group LLC globally after previously saying it would stop using it China, Australia and the U.S.

Sprint lost 5.3 percent while T-Mobile rallied 6.5 percent amid the prospects of a bidding war. Iliad, the French mobile-phone carrier founded by billionaire Xavier Niel, offered $15 billion in cash for a 56.6 percent stake in T-Mobile to enter the American wireless market.

A bid for T-Mobile would compete with SoftBank Corp. Chairman Masayoshi Son’s planned takeover offer. Son, whose company controls U.S. wireless carrier Sprint, had been planning to acquire T-Mobile for about $40 a share in stock and cash, the equivalent of about $32 billion, people with knowledge of the matter said earlier this month.