Showing posts with label Could. Show all posts
Showing posts with label Could. Show all posts

Sunday, June 3, 2012

Obama on Iran, said talks could be down to solve the crisis

Washington.U.s. President Barack Obama said that six major world powers with Iran talks over its nuclear program get a chance to solve the crisis continue to remove the danger of war and also can be avoided.

Iran's nuclear sanyantnon to attack soon on rumours that Iran between Obama here yesterday to begin a war against the American politicians on people of munadi detail information is the responsibility of the military operation to a country in lieu of pay and what advantages the US Iran nuclear weapons he hain1 to not allow.

It a while back to Iran by the Defense mantni paineta Leon warned that if her nuclear weapons created from all diplomatic ways fail, then military action would be focused heavily on the he although that military action is a last resort and only shall be in all measures fail.

EU foreign policy Chief Catherine Iran's nuclear program continues on estonia yesterday doubts to launch fresh discussions. the negotiations in the United States, Russia, China, France, Britain and Germany will take part.

He said the talks held to date and location to be done while an EU official that this may not be the Iranian new year before the talks, which come after two weeks, he said that negotiations with. preparations for meetings in the coming few days.

Iran's nuclear negotiator Saeed jalili talks to estonia on February 14 by reviving the desire by typing the patn whooped that conversation at the table will be a new initiative to offer even more than a fortnight by estonia. all six countries after discussions with them tomorrow to answer the patn.


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Friday, March 2, 2012

Swap Talks Over Greece Could Test the Market

The financial system could face a test this week as industry officials debate a provision of the Greek bailout.

Greek ParliamentPNC | Brand X Pictures | Getty Images

Greece is preparing to overhaul its bonds next month, a restructuring that could potentially prompt payouts on credit-default swaps [cnbc explains] , the financial instruments that protect against losses on debt. The International Swaps and Derivatives Association will meet on Thursday to decide whether a certain aspect of the deal will make those payments necessary.

If parties have to make good on the credit-default swaps, the situation could send shivers through the market. An important and long-planned measure that aims to strengthen the derivatives market is not yet in place, raising questions about how the financial system will react if the credit-default swaps have to pay out.

In the financial crisis of 2008, banks feared that their trading partners might not be able to meet such obligations on derivatives and other financial arrangements. The situation set off a chain reaction that paralyzed global markets until governments and central banks provided enormous financial support.

To prevent a similar disaster from happening again, finance ministers in the United States and Europe committed in 2009 to move derivatives like credit-default swaps onto clearinghouses. These organizations, if they work properly, can sharply reduce the chances that a large bank will not make good on their contracts.

But credit swaps that pay out if a European country defaults are not yet centrally cleared. Instead, banks remain largely responsible for making sure the various parties can meet their obligations. While financial firms have taken steps to ensure counterparties can pay, some industry participants say the market would be far stronger if central clearing existed now for the swaps.

John Sprow, chief risk officer at Smith Breeden Associates, a fund management firm, said regulators could have used the relative calm in the markets over the last two years to reduce risks in places like the credit-default swap market. “There’s no doubt, that, by having central clearing, you’d mitigate counterparty risk,” he said.


Current DateTime: 01:37:02 29 Feb 2012
LinksList Documentid: 22528753A small number of credit-default swaps have moved onto clearinghouses, but not swaps on European sovereign debt [cnbc explains] , even though they are traded relatively frequently and lie at the heart of the Continent’s debt maelstrom.

The reason for the delay in Europe appears to reside with the Financial Services Authority, the British financial regulator. The regulator has yet to approve credit-default swaps on sovereign debt for clearing. The American-based IntercontinentalExchange [ICE  Loading...      ()   ] has said it is in a position to start doing so through a European arm. IntercontinentalExchange started clearing default swaps on Latin American government debt last year after it received approval from the Securities and Exchange Commission. The British regulator declined to comment.

Clearinghouses have played a major role in strengthening other parts of the derivatives market, like futures. When executing trades through a clearinghouse, market participants have to back up their deals with adequate collateral in case they suddenly cannot make payments. As a result, when a potentially destabilizing event happens, banks are less likely to panic, because they believe money they are owed on trades will be paid.

With Greece moving toward default, all eyes are on how credit-default swaps will behave. One worry is that they may not pay out, even when bondholders suffer a loss. While the Greek bailout package could force investors to take a 70 percent haircut on the country’s bonds, the restructuring was set up as a potentially voluntary exchange, an outcome that would not prompt the credit-default swaps.

But a voluntary exchange looks increasingly unlikely. Greece is preparing to use legal means to force all qualifying bondholders to accept a haircut.

Now, industry officials will have to decide whether the credit-default swaps will pay out.

This week, an undisclosed entity officially asked the International Swaps and Derivatives Association to debate whether a particular feature of the Greek debt exchange could activate the swaps. The association said Tuesday that a committee would consider this question on Thursday.

One part of the Greek exchange being examined allows the European Central Bank [cnbc explains] to avoid a haircut on the Greek bonds it holds, even though other creditors take a hit. In effect, the committee has to decide whether this constitutes the type of “subordination” for non-ECB bondholders that would prompt a payout on Greek credit-default swaps. Subordination describes the process of relegating a creditor’s claim below that of others.

Rating agencies have already said that the European Central Bank’s move amounts to economic subordination for bondholders. But some lawyers don’t think it will cause the default swaps to pay out, since subordination is narrowly defined in the swaps’ contracts.

“I can’t see any legal event that would also be a credit event,” said Simon Firth, a partner at Linklaters in London. A required payout would most likely happen if a bond issuer actually changed the terms of some existing bonds to make them subordinate, he said, and he added that shielding the central bank from losses did not appear to do this.

Still, some analysts say they believe that such a move would undermine the credibility of credit-default swaps. “It may result in investors deciding it’s just too uncertain to enter into CDS,” said Peter Green, a partner with Morrison & Foerster in London.

This story originally appeared in The New York Times

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Tuesday, February 28, 2012

Could Democrats sabotage Michigan's primary?

(Carlos Osorio/AP)

DEARBORN, Mich.-- As the state of Michigan prepares for Tuesday's presidential primary, questions remain about whether Democrats could skew the results via crossover voting. The state of Michigan has no party registration requirement, so any registered voter can participate in Tuesday's Republican presidential primary, including Democrats and independents.

But select party leaders surveyed by Yahoo News say they're not concerned about the potential impact of crossover votes.

"The Michigan Republican party believes that voters who vote in a primary do so because they're encouraged and inspired to participate in the process… not to create some type of mischief," state party spokesman Matt Frendewey told Yahoo News.

In the past, Democrats and independents have been credited with some major vote outcomes in Michigan: surveys from the 1996 reportedly indicated that 16 percent of voters in that year's Republican primary were Democrats and 17 percent were independents; many believe John McCain won Michigan's 2000 presidential primary with the help of Democrats and Independents; and others suggest Republican Gov. Rick Snyder won the 2010 primary with a boost from those same voting groups.

Frendewey said that the state GOP has been focused solely on Republican turnout for this primary and has made no efforts to appeal to independents or "soft Democrats."

For their part, Democrats say they have made no effort to encourage their fellow party members to vote on Tuesday.

United Auto Workers' President Bob King when asked last week at an anti-Mitt Romney rally in Detroit if he's encouraging auto union members (who typically vote Democratic) to participate Tuesday, he rejected the suggestion. "No, we're not," King told reporters. "I'm urging my members to work hard, to rebuild the right to organize, the right to collective bargaining, to support President Obama, and really we want to build a broader movement…" he said.

The state Democratic party chairman also flatly denied any efforts to promote Democratic participation.

"We do not encourage crossover voting," chairman Mark Brewer told Yahoo News.

Brewer made that comment in a phone interview this weekend even though he put out a statement last week highlighting a video of two Republican state Senators encouraging Democrats to vote in the primary:

Democrats who accept this invitation will still be able to vote in our May 5th caucuses. If Democratic crossover votes affect the results on February 28th, Republicans will have no one but themselves to blame.

Statements such as this combined with the state's history have kept questions about crossover voters in the news. And other outlets have helped stoke interest in the subject.

Liberal Daily Kos founder Markos Moulitsas launched a call for Democratic voters to participate in open Republican primaries in Michigan, North Dakota, Vermont and Tennessee in an effort he dubbed "Operation Hilarity." (He made the same plea in Michigan in 2008.)

It's difficult to gauge exactly how many Democrats and Independents will head to the polls to vote Republican on Tuesday. Public Policy Polling-- which conducted robo-calls in Michigan-- on Sunday estimated that just 5 percent of likely primary voters in Michigan are Democrats and that their impact may not be felt at all. "They're splitting their votes 28-28 between Romney and Santorum," the survey outfit stated in its report.

More popular Yahoo! News stories:

• Obama welcomes construction of southern part of Keystone Pipeline

• As gas prices rise, Republican candidates step up the attacks on Obama's energy policy

• Show us your primary: Yahoo! News wants your photos

Want more of our best political stories? Visit The Ticket or connect with us on Facebook, follow us on Twitter, or add us on Tumblr. Handy with a camera? Join our Election 2012 Flickr group to submit your photos of the campaign in action.


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Sunday, February 26, 2012

Saudi Oil Boost Could Calm Markets: Schumer

WASHINGTON - The United States should do more to encourage Saudi Arabia to boost its oil production to make up for lost Iranian oil, Senator Charles Schumer said on Sunday, urging renewed diplomacy as a way to ease the run-up in oil prices.

Tensions surrounding Iran's nuclear program have pushed oil prices to nine-month highs, and U.S. gasoline prices have surged, becoming a top political issue in the run-up to the 2012 presidential elections.

A public promise from Saudi Arabia, the world's top oil exporter, to pump oil at its full capacity would calm oil markets as well as gasoline prices, Schumer, the third-ranking Democrat in the Senate, said in a letter to Secretary of State Hillary Clinton.

In the letter, which was obtained by Reuters, Schumer asked Clinton to urge the Saudi government to increase production to full capacity of 12.5 million barrels per day - an increase of 2.5 million barrels.

That would compensate for a reduction in Iran's total exports of 2.2 million barrels per day. Oil sales from Iran, the third-largest oil exporter, face tough new sanctions as a result of the standoff over its nuclear development.

Gasoline prices in the United States are the highest on record for February. The American Automobile Association (AAA) said the national average price hit $3.65 per gallon on Friday, and analysts say average prices could rise well over $4 per gallon during the peak driving season in coming months.

"These skyrocketing fuel prices are directly linked to the global energy market, particularly Iran's recent efforts to manipulate oil prices and the worry of impacts on supply from an escalation of regional hostilities," Schumer said in the letter.

The United Nation's nuclear watchdog last week warned Iran has stepped up its efforts to enrich uranium. Iran has insisted it is developing nuclear power, not weapons.

The European Union will ban Iranian oil as of July 1, and other buyers will face new U.S. sanctions unless they cut back on purchases.

"These market shifts are now hitting Americans at the pump, reverberating throughout the rest of our economy, and threatening our recovery," Schumer said.

Saudi Arabia has privately reassured customers it will pump more oil, and sharply increased exports in the past week, although it was not clear whether the jump would be sustained.

Copyright 2012 Reuters. Click for restrictions.

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Friday, February 24, 2012

Factory ‘Revival’ Could Lead to Jobs: Pimco’s Crescenzi

There's been a "revival" in U.S. factory production and worker productivity, but it remains to be seen if the increases will translate into more hiring later in the year, Pimco market strategist Tony Crescenzi told CNBC Friday.

Peter Dazeley | Photographer's Choice | Getty Images“Corporations are doing well as far as cash goes,” said Crescenzi, whose company manages $1.3 trillion in assets. “What’s important is whether they’ll decide to give up some of the profit margin and transfer, if you will, to the labor" side if they want to maintain market share and keep up against competitors.

The strong yen is forcing many Japanese manufacturers to move operations to the U.S., he said. Wages are rising in developing nations, particularly China and India, forcing them to shift at least some production back to the U.S.

In addition, after last year’s earthquake and tsunami in Japan and floods in Thailand, “companies realized we’d better diversify the supply chain. So they wanted to increase production here a bit more,” he said.

At present, U.S. indicators are good, he said, starting with the unemployment [cnbc explains] rate.

“The unemployment rate [cnbc explains] is the most understandable economic indicator that there is, at least for Main Street. Most of the indicators are better” including labor, worker productivity, and car sales, Crescenzi said.

But with Europe’s problems still looming, and the Bush-era tax cuts and the payroll-tax holiday ending on Jan. 1, plus billions of dollars in automatic federal spending cuts expected, Crescenzi said there’s still a lot to concern him about the economy.

“It might make some people in the second half of the year a little more cautious about spending, so consumption could weaken then,” he said.


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Wednesday, February 22, 2012

Oil Could Turn to Headwind as Dow Flirts With 13,000

Worried oil could turn from a tailwind to a headwind, traders are watching to see if the Dow can once again crack and hold the 13,000 mark.

The Dow Tuesday crossed and then backed away from 13,000, a big round number with more psychological impact than anything else. The Dow was 15 points higher at 12,965. The S&P 500, meanwhile finished the day up just under a point at 1,362, one point below its 2011 closing high and 8 points below its 2011 intraday high.

But the real sizzler was oil, which jumped sharply on a combination of supply concerns and on expectations a new bailout of Greece will be good for Europe and on new easing by China. West Texas Intermediate futures (for April) finished up 2.6 percent Tuesday, at $106.25 per barrel, the highest level since May 4, 2011 and well off its October low of $75.67.

Oil was following the big gain made in electronic trading Monday, when regular floor trading was closed for the President’s Day holiday. Rising tensions with Iran sparked a jump in prices over the weekend. Brent crude, the international oil benchmark, saw a smaller gain Tuesday, rising 1.3 percent to $121.66 per barrel.

“As the Iranians are seen as more and more serious about being disruptive, you’ll see the price grinding higher… but if they can pull off getting everybody stepping back and even fake engagement in the negotiation process, it could go back to the mid $90s very quickly,” said John Kilduff of Again Capital.

Energy stocks were the big winner Tuesday, gaining 0.8 percent as the best performing sector, but airline stocks were under pressure from rising fuel costs.

Existing home sales is the big number for markets Wednesday, when the monthly number is reported at 10 a.m. EST. But Dell [DELL  Loading...      ()   ] , which reported earnings Tuesday, could be a negative weight on markets Wednesday morning, casting a cloud over the tech sector. Dell forecast first-quarter revenue below expectations after reporting weaker-than-expected earnings for the fourth quarter. Dell’s net income was down 18 percent at $764 million, or $0.43 per share.

Earnings Wednesday are expected from Dollar Tree, Toll Brothers, TJX, Eaton Vance, R.R. Donnelley, MGM Resorts and Garmin. After the bell earnings are expected from Hewlett-Packard, Limited Brands, Express Scripts, Boston Beer, and Williams Companies. There is also a $35 billion auction of 5-year notes at 1 p.m.

Dow's Key 13,000 Mark

Even as analysts expect the market to see a shallow pull back in the not too distant future, many believe that 13,000 will be a positive event for stocks.

“It affects the retail investors’ confidence in the market, and it does impact overall consumer confidence,” said Peter Kenny, managing director at Knight Capital.

“What prevented it from happening today was Wal-Mart [WMT  Loading...      ()   ] and after the bell, Dell disappointed. We’ve run into some numbers that form a bit of a hurdle for these levels, but I still think the momentum and the gradually improving macroeconomic story is giving the market a lift or a bid that might not be there otherwise,” he said. Wal-Mart profits, reported Tuesday, were hurt by price cutting which squeezed margins.

But the big hurdle for stocks? “I think it’s the geopolitics priced into oil. That’s the biggest problem that the street is looking at...That’s a problem, a really big problem for the market. It’s already started to act as a little bit of a decelerator,” Kenny said.

Economists worry that consumers will pull back as gasoline prices head towards $4, a number already showing up at the pump in some parts of the country.

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Could the Next Stop Could Be Dow 15000?

Are you ready for Dow 15000?

Long-time market bull and Wharton School finance professor Jeremy Siegel told CNBC Tuesday the Dow Jones Industrial Average can exceed 13000 and rise to 15000 in a few years if more investors return to buying stocks as the economy improves.

"I think we have a stronger economy now than we did a year ago" except for oil, "which is a wild card," he said. "I think we can certainly move up from this position...I think we only need 8 percent a year further on this year and then next year to get to Dow 15000, given valuations."

He spoke before the Dow briefly reached 13000 mid-day Tuesday. The University of Pennsylvania professor said 13000 is double the level of the Dow at its low point of March 9, 2009, "the deepest bear market since the 1930s. I think that's somewhat of a milestone to double the low in less than three years."

Stock valuations are very good "in a zero-interest-rate world. You don't get many opportunities like this," he added.

Despite an earnings season he called "good, not great," the stock market is strong.

"We don't need super-fast earnings growth to have a good market," he said. "At today's valuations...if earnings stay the same this year and in 2013, 2014, you still have valuations and yields that make [the market] very, very attractive."

What’s also different today is that as recently as 10 years ago "you needed a lot of capital gains in stocks to match what you can get in bonds because interest rates were much higher than dividend yields," Siegel said. "When dividend yields are higher than interest rates you don’t need so much in earnings growth to still have a great investment."

Siegel admitted he hasn't always been bullish. He was "very bearish at top of the tech bubble" in March 2000.

"Have I been wrong? Yeah, certainly," he said. "One thing I regret is I did not see the financial crisis and the bear market. You know, I saw the housing bubble. I didn’t see the buildup of those risky assets leveraged in Bear Stearns, Lehman and all those others" whose failure helped bring on the 2008 financial crisis.

But then-Federal Reserve [cnbc explains] Chairman Alan Greenspan "didn’t see it either, and he could look at their balance sheets," Siegel joked.


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Iran Fuels Oil-Price Rally—And Prices Could Keep Rising

Rising tensions around Iran’s nuclear program, coupled with prospects for a better global economy, carried oil prices above $106 Tuesday for the first time since May.

Strait of Hormuz, Iran, navyEbrahim Noroozi | AFP | Getty ImagesIranian Navy boats take part in maneuvers in the Strait of Hormuz.

Analysts say oil could continue to rise, but how much depends on a variety of factors, including whether the sanctions against Iran result in supply shortages, which are as yet not a concern. The April contract for West Texas intermediate [CLCV1  Loading...      ()   ] was above $106 in late trading, and Brent crude [LCOJ2  Loading...      ()   ] , the international oil benchmark, was above $121 per barrel.

China’s announcement over the weekend that it would reduce reserve requirements for banks in a bid to spur lending gave a boost to risk assets, including oil, as investors see a new round of easier policy. Also helping was the euro zone agreement to fund another bailout for Greece, removing the potential of a Greek default for now.

At the same time, Iran this past weekend said it would cut off oil supplies to France and Britain. The two countries were already cutting back, and Europe has vowed to end all existing supply contracts by July. The European embargo prohibits any new contracts with Iran.

“The oil market has been balancing downside demand risk from Europe against downside supply risk from Iran. The Greek deal over the weekend eased some of the demand-side fears while saber rattling from Tehran has kept supply-side concerns front and center. And oil prices have surged as a result,” notes Trevor Houser, partner with the Rhodium Group.

Rising oil prices also run the risk of bringing about their own decline. Analysts say at about $4 a gallon, consumers will cut back as much as possible on gasoline purchases. Gasoline use has been in decline, and was already down a surprising 8 percent last week.

The national average for unleaded regular Tuesday was $3.57 per gallon, according to AAA, and analysts expect to see gasoline at $4 and some even see $5, heading into the summer driving season.

Even without Iran, Houser said he has been expecting higher oil prices as Europe moves past Greece and China’s economy outperforms some reduced expectations. “We’re more bullish on the euro zone and Chinese growth and have been for the past six months, and we see higher oil prices even in the absence of Iran,” he said.

The question, however, is whether gasoline prices spike to a point where they wound the consumer. “At $4 a gallon is really where you see demand take a hit. The big concern is whether a nascent U.S. recovery is kneecapped in the summer by gasoline prices,” Houser said.

But with Iran as an unknown, the oil market has been rising, and traders have been betting prices will be even higher as the year goes on. “It looks as if the market has broken out pretty strongly here,” said Gene McGillian, analyst with Tradition Energy. “You have to immediately think, if things keep dovetailing on the positive side, we could push to the area where we topped out last year — at around $114,” said McGillian. He said there could first be resistance at about $110 per barrel.

“I know there seems to be some supply concerns after Tehran said they going to stop selling the British and French, but I don’t think they were selling too much there anyway,” said McGillian.

John Kilduff of Again Capital said the market is factoring bigger increases into the second half of the year. “You’re seeing anywhere from $125 to $200, but mostly it’s clustered around $125 to $150 (per barrel) in the calls,” he said.

“There could be another leg higher for crude. It depends on what happens with the IAEA inspectors. If they leave in any kind of diplomatic huff that would be good for several dollars higher,”John Kilduff
Founding Partner, Again CapitalAnother factor traders are watching is the visit to Iran by representatives of the International Atomic Energy Agency, planned for Tuesday.

“There could be another leg higher for crude. It depends on what happens with the IAEA inspectors. If they leave in any kind of diplomatic huff that would be good for several dollars higher,” Kilduff said. It was an IAEA report in November that was the catalyst for the latest round of Western governments’ sanctions. The report suggested Iran’s nuclear program was weapons oriented.

Adding to the tensions around Iran is rising speculation that Israel will take action on its own to stop Iran’s nuclear program. Gen. Martin Dempsey, chairman of the U.S. Joint Chiefs, said this weekend that such an air strike by Israel was “not prudent” and would be “destabilizing.”

The U.S. has also warned Iran about its threats to close the Strait of Hormuz, a shipping route that carries about 20 percent of the world’s oil.

McGillian said, when it comes to Iran, the question is how much more oil can Saudi Arabia add to the market. “The Saudis have been reassuring the market they have spare capacity they can bring on line. I think that’s what people are watching for. Is there spare supply from Saudi Arabia?” he said.

Under the U.S. sanctions, financial institutions that deal with the Iranian central bank would be prohibited from dealing with the U.S. financial system. That would impact Japan and Korea, which traders believe are already finding other sources. Analysts said a big unknown is what India and China might ultimately do about importing Iranian crude.

“You’ve got players like India and China taking a wait and see approach about making a decision on whether to increase Iranian supply,” said Houser.

Follow Patti Domm on Twitter: @pattidomm

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Tuesday, February 21, 2012

Iran Fuels Oil-Price Rally—And Prices Could Keep Rising

Rising tensions around Iran’s nuclear program, coupled with prospects for a better global economy, carried oil prices above $106 Tuesday for the first time since May.

Strait of Hormuz, Iran, navyEbrahim Noroozi | AFP | Getty ImagesIranian Navy boats take part in maneuvers in the Strait of Hormuz.

Analysts say oil could continue to rise, but how much depends on a variety of factors, including whether the sanctions against Iran result in supply shortages, which are as yet not a concern. The April contract for West Texas intermediate [CLCV1  Loading...      ()   ] was above $106 in late trading, and Brent crude [LCOJ2  Loading...      ()   ] , the international oil benchmark, was above $121 per barrel.

China’s announcement over the weekend that it would reduce reserve requirements for banks in a bid to spur lending gave a boost to risk assets, including oil, as investors see a new round of easier policy. Also helping was the euro zone agreement to fund another bailout for Greece, removing the potential of a Greek default for now.

At the same time, Iran this past weekend said it would cut off oil supplies to France and Britain. The two countries were already cutting back, and Europe has vowed to end all existing supply contracts by July. The European embargo prohibits any new contracts with Iran.

“The oil market has been balancing downside demand risk from Europe against downside supply risk from Iran. The Greek deal over the weekend eased some of the demand-side fears while saber rattling from Tehran has kept supply-side concerns front and center. And oil prices have surged as a result,” notes Trevor Houser, partner with the Rhodium Group.

Rising oil prices also run the risk of bringing about their own decline. Analysts say at about $4 a gallon, consumers will cut back as much as possible on gasoline purchases. Gasoline use has been in decline, and was already down a surprising 8 percent last week.

The national average for unleaded regular Tuesday was $3.57 per gallon, according to AAA, and analysts expect to see gasoline at $4 and some even see $5, heading into the summer driving season.

Even without Iran, Houser said he has been expecting higher oil prices as Europe moves past Greece and China’s economy outperforms some reduced expectations. “We’re more bullish on the euro zone and Chinese growth and have been for the past six months, and we see higher oil prices even in the absence of Iran,” he said.

The question, however, is whether gasoline prices spike to a point where they wound the consumer. “At $4 a gallon is really where you see demand take a hit. The big concern is whether a nascent U.S. recovery is kneecapped in the summer by gasoline prices,” Houser said.

But with Iran as an unknown, the oil market has been rising, and traders have been betting prices will be even higher as the year goes on. “It looks as if the market has broken out pretty strongly here,” said Gene McGillian, analyst with Tradition Energy. “You have to immediately think, if things keep dovetailing on the positive side, we could push to the area where we topped out last year — at around $114,” said McGillian. He said there could first be resistance at about $110 per barrel.

“I know there seems to be some supply concerns after Tehran said they going to stop selling the British and French, but I don’t think they were selling too much there anyway,” said McGillian.

John Kilduff of Again Capital said the market is factoring bigger increases into the second half of the year. “You’re seeing anywhere from $125 to $200, but mostly it’s clustered around $125 to $150 (per barrel) in the calls,” he said.

“There could be another leg higher for crude. It depends on what happens with the IAEA inspectors. If they leave in any kind of diplomatic huff that would be good for several dollars higher,”John Kilduff
Founding Partner, Again CapitalAnother factor traders are watching is the visit to Iran by representatives of the International Atomic Energy Agency, planned for Tuesday.

“There could be another leg higher for crude. It depends on what happens with the IAEA inspectors. If they leave in any kind of diplomatic huff that would be good for several dollars higher,” Kilduff said. It was an IAEA report in November that was the catalyst for the latest round of Western governments’ sanctions. The report suggested Iran’s nuclear program was weapons oriented.

Adding to the tensions around Iran is rising speculation that Israel will take action on its own to stop Iran’s nuclear program. Gen. Martin Dempsey, chairman of the U.S. Joint Chiefs, said this weekend that such an air strike by Israel was “not prudent” and would be “destabilizing.”

The U.S. has also warned Iran about its threats to close the Strait of Hormuz, a shipping route that carries about 20 percent of the world’s oil.

McGillian said, when it comes to Iran, the question is how much more oil can Saudi Arabia add to the market. “The Saudis have been reassuring the market they have spare capacity they can bring on line. I think that’s what people are watching for. Is there spare supply from Saudi Arabia?” he said.

Under the U.S. sanctions, financial institutions that deal with the Iranian central bank would be prohibited from dealing with the U.S. financial system. That would impact Japan and Korea, which traders believe are already finding other sources. Analysts said a big unknown is what India and China might ultimately do about importing Iranian crude.

“You’ve got players like India and China taking a wait and see approach about making a decision on whether to increase Iranian supply,” said Houser.

Follow Patti Domm on Twitter: @pattidomm

Questions?  Comments? Email us atdocument.write("");document.write("marketinsider"+"@"+"cnbc.com");document.write('');


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Could the Next Stop Could Be Dow 15000?

Are you ready for Dow 15000?

Long-time market bull and Wharton School finance professor Jeremy Siegel told CNBC Tuesday the Dow Jones Industrial Average can exceed 13000 and rise to 15000 in a few years if more investors return to buying stocks as the economy improves.

"I think we have a stronger economy now than we did a year ago" except for oil, "which is a wild card," he said. "I think we can certainly move up from this position...I think we only need 8 percent a year further on this year and then next year to get to Dow 15000, given valuations."

He spoke before the Dow briefly reached 13000 mid-day Tuesday. The University of Pennsylvania professor said 13000 is double the level of the Dow at its low point of March 9, 2009, "the deepest bear market since the 1930s. I think that's somewhat of a milestone to double the low in less than three years."

Stock valuations are very good "in a zero-interest-rate world. You don't get many opportunities like this," he added.

Despite an earnings season he called "good, not great," the stock market is strong.

"We don't need super-fast earnings growth to have a good market," he said. "At today's valuations...if earnings stay the same this year and in 2013, 2014, you still have valuations and yields that make [the market] very, very attractive."

What’s also different today is that as recently as 10 years ago "you needed a lot of capital gains in stocks to match what you can get in bonds because interest rates were much higher than dividend yields," Siegel said. "When dividend yields are higher than interest rates you don’t need so much in earnings growth to still have a great investment."

Siegel admitted he hasn't always been bullish. He was "very bearish at top of the tech bubble" in March 2000.

"Have I been wrong? Yeah, certainly," he said. "One thing I regret is I did not see the financial crisis and the bear market. You know, I saw the housing bubble. I didn’t see the buildup of those risky assets leveraged in Bear Stearns, Lehman and all those others" whose failure helped bring on the 2008 financial crisis.

But then-Federal Reserve [cnbc explains] Chairman Alan Greenspan "didn’t see it either, and he could look at their balance sheets," Siegel joked.


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Oil Could Turn to Headwind as Dow Flirts With 13,000

Worried oil could turn from a tailwind to a headwind, traders are watching to see if the Dow can once again crack and hold the 13,000 mark.

The Dow Tuesday crossed and then backed away from 13,000, a big round number with more psychological impact than anything else. The Dow was 15 points higher at 12,965. The S&P 500, meanwhile finished the day up just under a point at 1,362, one point below its 2011 closing high and 8 points below its 2011 intraday high.

But the real sizzler was oil, which jumped sharply on a combination of supply concerns and on expectations a new bailout of Greece will be good for Europe and on new easing by China. West Texas Intermediate futures (for April) finished up 2.6 percent Tuesday, at $106.25 per barrel, the highest level since May 4, 2011 and well off its October low of $75.67.

Oil was following the big gain made in electronic trading Monday, when regular floor trading was closed for the President’s Day holiday. Rising tensions with Iran sparked a jump in prices over the weekend. Brent crude, the international oil benchmark, saw a smaller gain Tuesday, rising 1.3 percent to $121.66 per barrel.

“As the Iranians are seen as more and more serious about being disruptive, you’ll see the price grinding higher… but if they can pull off getting everybody stepping back and even fake engagement in the negotiation process, it could go back to the mid $90s very quickly,” said John Kilduff of Again Capital.

Energy stocks were the big winner Tuesday, gaining 0.8 percent as the best performing sector, but airline stocks were under pressure from rising fuel costs.

Existing home sales is the big number for markets Wednesday, when the monthly number is reported at 10 a.m. EST. But Dell [DELL  Loading...      ()   ] , which reported earnings Tuesday, could be a negative weight on markets Wednesday morning, casting a cloud over the tech sector. Dell forecast first-quarter revenue below expectations after reporting weaker-than-expected earnings for the fourth quarter. Dell’s net income was down 18 percent at $764 million, or $0.43 per share.

Earnings Wednesday are expected from Dollar Tree, Toll Brothers, TJX, Eaton Vance, R.R. Donnelley, MGM Resorts and Garmin. After the bell earnings are expected from Hewlett-Packard, Limited Brands, Express Scripts, Boston Beer, and Williams Companies. There is also a $35 billion auction of 5-year notes at 1 p.m.

Dow's Key 13,000 Mark

Even as analysts expect the market to see a shallow pull back in the not too distant future, many believe that 13,000 will be a positive event for stocks.

“It affects the retail investors’ confidence in the market, and it does impact overall consumer confidence,” said Peter Kenny, managing director at Knight Capital.

“What prevented it from happening today was Wal-Mart [WMT  Loading...      ()   ] and after the bell, Dell disappointed. We’ve run into some numbers that form a bit of a hurdle for these levels, but I still think the momentum and the gradually improving macroeconomic story is giving the market a lift or a bid that might not be there otherwise,” he said. Wal-Mart profits, reported Tuesday, were hurt by price cutting which squeezed margins.

But the big hurdle for stocks? “I think it’s the geopolitics priced into oil. That’s the biggest problem that the street is looking at...That’s a problem, a really big problem for the market. It’s already started to act as a little bit of a decelerator,” Kenny said.

Economists worry that consumers will pull back as gasoline prices head towards $4, a number already showing up at the pump in some parts of the country.

Follow Patti Domm on Twitter: @pattidomm

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