“Spoiler alert: 9 stocks that may shock on earnings…”

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“Sales of luxury homes spiked in the final months of 2012 as high-end homeowners rushed to take advantage of lower tax rates before January 1.

Many sellers wanted to cash in on their homes before a widely expected capital gains hike — to 20% from 15% — that was part of the fiscal cliff budget deal. High-income earners (singles with income of $200,000 or more and couples making more than $250,000) also wanted to close sales ahead of a 3.8% Medicare surtax on investment income that was already slated to go into effect this year as part of the Affordable Care Act.

All told, a high-earner would pay $88,000 less in taxes if they made a $1 million profit on their home in 2012 rather than in 2013.

That considerable tax savings motivated many wealthy homeowners to move fast. According to the National Association of Realtors (NAR), sales of homes valued at $1 million or more spiked 51% in November compared with a year earlier.

In Manhattan, one of the most expensive markets in the nation, the number of sales of home valued at more than $10 million jumped 44% year-over-year during the last three months of 2012, according to broker Brown Harris Stevens….”

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“Businesses in the eurozone may be feeling more confident but there’s no sign of that translating into better employment prospects yet.

Eurostat data published Tuesday showed unemployment in the 17-nation eurozone hit a record high of 11.8% in November, leaving 18.8 million people without work – two million more than a year ago…”

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“The American economy is not likely to witness a miraculous turnaround, but many financial experts are expecting an improvement in 2013.

Many Americans will continue to face challenges, such as rising costs of living, wages that fail to keep pace and stubbornly high unemployment rates.

The new norm will be the same as the old norm for most households, according to The Des Moines Register……”

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“Sitting onstage in Washington’s Ronald Reagan Building in July, Lloyd C. Blankfein said Goldman Sachs Group Inc. had stopped using its own money to make bets on the bank’s behalf.

“We shut off that activity,” the chief executive officer told more than 400 people at a lunch organized by the Economic Club of Washington, D.C., slicing the air with his hand. The bank no longer had proprietary traders who “just put on risks that they wanted” and didn’t interact with clients, he said.

That may come as a surprise to people working in a secretive Goldman Sachs group called Multi-Strategy Investing, or MSI. It wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said.

The team’s survival shows how Goldman Sachs has worked around regulations curbing proprietary bets at banks. Former Federal Reserve Chairman Paul A. Volcker singled out the company in 2009, saying it shouldn’t get taxpayer support if it focuses on trading. A section of the 2010 Dodd-Frank Act known as the Volcker rule, drafted to prevent banks from taking on excessive risk, limits short-term investments made with firms’ capital.

The law doesn’t bar longer-term wagers. That leaves room for other risky investments, according to Matthew Richardson, an economics professor at New York University’s Stern School of Business. Bets that last months can go awry and belong outside federally backed banks, he said.

“From a systemic-risk perspective, it’s really the longer- term holdings which are of issue,” said Richardson, who heads NYU’s Salomon Center for the Study of Financial Institutions.

‘The Don’ …”

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“The U.S. might run out of funds to pay all its bills as early as Feb. 15 after it exhausts emergency measures undertaken when it hit the $16.4 trillion debt ceiling at the end of last month, the Bipartisan Policy Center said Monday.

The Treasury Department has started using so-called “extraordinary measures” to keep funding the government. Treasury Secretary Timothy F. Geithner said Dec. 26 that “under normal circumstances” those safety lines would last for about two months and create about $200 billion of “headroom.”

“Based on financial data from Treasury, we estimate that the government will be unable to pay all of its bills as early as Feb. 15,” Steve Bell, senior director of the economic policy project at the Washington-based Bipartisan Policy Center, said in an e-mailed statement Monday. “We have less time to solve this problem than many realize.”

Republicans in Congress want to focus on spending cuts….”

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Ecuador, Panama, Malaysia , Mexico, Costa Rica, Uraguay, Columbia, Spain, Thailand, & Malta

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“LONDON—Virgin Atlantic Airways Ltd., which last month linked with Delta Air LinesInc., DAL +0.69% deepened its ties to the U.S. aviation market by selecting American Airlines veteran Craig Kreeger as its new chief executive.

Mr. Kreeger, 53, succeeds current CEO Steve Ridgway who is retiring from the airline next month after 23 years, the last 11 as chief executive. Mr. Ridgway will work alongside Mr. Kreeger until then.

The announcement comes just a month after U.S. carrier Delta Air Lines Inc. agreed to buy Singapore Airlines Ltd.’s C6L.SG +0.55% 49% stake in Virgin Atlantic Airways Ltd. for $360 million. The deal boosts the position of Delta, the No. 2 U.S. carrier by traffic, at London’s congested Heathrow Airport. The move continued a run of cut-price deals to expand Delta’s global network.

With the partnership, Delta and Virgin Atlantic will have 36% of the business on the imporant New York-London route, coming much closer to the 51% controlled by a joint venture of British Airways IAG.MC +0.21% and American, a unit of AMR Corp.AAMRQ -1.12% United Continental Holdings Inc. UAL -0.35% would fall to third place with 13% of the market, according to Buckingham Research Group.

“We are thrilled to welcome Craig to Virgin Atlantic—he is the right person to succeed Steve Ridgway at this dynamic and challenging time for our airline,” said Virgin Atlantic’s president and founder, Richard Branson….”

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“GameStop Corp. GME -6.06% forecast a steeper decline in 2012 same-store sales as total holiday sales decreased from a year earlier due to weaker customer traffic.

The videogame retailer said total sales for the nine-week holiday period ended Dec. 29 fell 4.6% to $2.88 billion.

The company said its now expects a 7.5% to 9% drop in same-store sales for the year, compared with its November forecast of a 6% to 9% decrease. GameStop also expects fourth-quarter same-store sales to fall 4% to 7%.

The company said new hardware sales declined 2.7% during the holiday period while sales of new videogame software decreased 5.1%.

Sales of preowned merchandise sank 16% as the release of fewer new titles throughout 2012 and less promotional activity limited inventory in that category.

GameStop has previously attributed its recent same-store sales declines to a weak offering of new game titles and has signaled it expects the slowdown of new console and software sales to continue. In response, the retailer has been focusing on new initiatives, such as offering digital download codes to customers, refurbishing AppleInc. AAPL +0.28% mobile devices and selling tablets that run on Google Inc.’sGOOG -0.66% Android software…”

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“Bloomberg is reporting this morning another eye-opening incident with one of Boeing‘s (BA) 787 Dreamliner planes:

Flames about two feet (0.6 meter) high shot out of an avionics bay in the jet’s belly yesterday as the plane sat at a Logan International Airport gate before its next departure, and there was a small explosion, Massachusetts Port Authority Fire Chief Robert Donahue said in an interview. Japan Airlines, which has seven 787s, won’t ground other Dreamliners.

Thankfully no one was hurt, but after last month’s groundings this is yet one more black eye for Boeing’s Dreamliner.

I’ve noted before that Boeing deserves some forbearance for the 787′s teething troubles because it’s essentially trying to reinvent the modern passenger aircraft while running a profitable business,  but at some point the problems have to stop. And when you get fires breaking out on commercial planes, maybe we’re getting to that point.

Certainly that’s the view of Carter Leake, analyst at BB&T, who wrote this morning…”

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“Fresh from paying back a $182 billion bailout, the American International Grouphas been running a nationwide advertising campaign with the tagline “Thank you America.”

Behind the scenes, the restored insurance company is weighing whether to tell the government agencies that rescued it during the financial crisis: thanks, but you cheated our shareholders.

The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation…..”

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“Shares in Vodafone rose almost 3 percent on Tuesday after its partner in U.S. joint venture Verizon Wireless said it would be “feasible” to buy out the British group in what would be one of the biggest corporate deals ever.

Verizon Communications Chief Executive Lowell McAdam told The Wall Street Journalthat “we have always said we would love to own all of that asset”, which is 55 percent owned by Verizon Communications and 45 percent by Vodafone.

Investors in both groups have long speculated about the future of Verizon Wireless’s ownership, especially after Vodafone embarked on a programming of selling stakes in businesses around the world that it did not control.

That was aimed at streamlining its portfolio and returning cash to shareholders who felt the company’s share price did not reflect the sum of its many individual parts.

The two parent groups have also clashed in recent years over when and whether Verizon Wireless should pay its two owners a dividend and the comments from McAdam are likely to reignite the issue.

“I think 1/8a deal 3/8 is feasible,” he told the newspaper. “Our wireline business is getting stronger and as that gets stronger, it makes it easier.”

McAdam added that Verizon could buy the stake outright, or there are “lots of different ways we could do it…”

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“Thursday’s meeting of the European Central Bank’s rate-setting committee could mark a key moment in the evolution of the euro zone debt crisis, as a growing number of economists predict that it will vote to cut interest rates again.

ECB President Mario Draghi has made several bold decisions in his first year in charge, notably the pledge to support struggling states through bond buying viaOutright Monetary Transactions(OMTs), and an interest rate cut could be the next.

A cut would make the ECB’s deposit rate, currently 0, negative – effectively charging companies to deposit money. While this could mean that banks put their money to work elsewhere, it could also mean that ordinary savers have less incentive to put money aside.

The headline refinancing rate is currently 0.75 percent, but at the moment this has less effect on short-term borrowing than the deposit rate because cheap ECB loans have already made borrowing money less expensive….”

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“Some of the best technicians on StockTwits have offered up charts they will be watching most closely in the year ahead. Take a look…

1. Bikini Analytics (@BikiniAnalytics): JPM – Is the 11th Attempt a Charm? JPM is a bellweather money center bank that has bumped up against this 45 area 11 times over the last 6 years. If it finally manages to break out through this level, hold and run higher it will have bullish implications for the financial sector and for the broader market as well. 

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“I track the industry analysts’ annual consensus earnings estimates of the S&P 500 for the current year and the coming year on a weekly basis. I call them “Earnings Squiggles” because that’s what they look like. As of last week, industry analysts estimated that the S&P 500 will earn $112.98 this year and $125.91 in 2014.

The estimates for 2012 and 2013 mostly fell all last year, yet the S&P 500 rose 13.4%. I have the Squiggles data back to 1979 on a monthly basis. More often than not, they tend to trend down; yet more often than not, the market has trended higher. That’s because the market discounts 12-month forward consensus expected earnings. A good proxy for this concept is forward earnings, i.e., the time-weighted average of consensus estimates for the current and coming years. It tends to be a good 12-month leading indicator for actual profits, with one important exception: Analysts don’t see recessions coming until we all do too.

The bottom line is that the bottom line for S&P 500 companies on a 12-month (and on a 52-week) forward basis rose to a record high at the beginning of this year even though analysts have been lowering their estimates for 2012 and 2013….”

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AMP, AZO, BHI, CELG, DDS, EMC, FRT, GNW, HAL, MYL, NOC, NYX, PNK, RTN, SNH, SBY, LUV, JBLU, MET, HIG,

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“Encouraged by the rise of China and India in the past decade, investors and economic commentators have eagerly looked toward other emerging market nations in hopes of finding “The Next China” – or at least the next country to supply the raw materials that China needs for its construction-driven growth boom and bubble (which entails the building of empty cities to create economic growth).

Furthermore, since the 2008 Global Financial Crisis, investors have sought to invest in emerging markets as a way of diversifying away from investments in the heavily-indebted and slow-growing American and European economies.

Unfortunately, the vast ocean of “hot money” that has poured into emerging markets has created a massive economic bubble throughout nearly the entire emerging world, including overheating economies and property bubbles everywhere from Brazil to Indonesia to Turkey.

Ballooning asset prices and easy money has led to “luxury fever” as emerging market nations copy the spendthrift ways that contributed to the West’s downfall just a few years earlier.

The Emerging Markets Bubble is a derivative of the bubbles in China and commoditiesand will pop when they inevitably do.

How the Emerging Markets Boom Started….”

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