The market appears to have regained some of its footing this week, but that doesn’t mean it’s completely shaken the issues that keep derailing the rally from time to time.

1. Inflation

Yesterday, West Texas Intermediate (WTI) rallied to the doorstep of $70 a barrel before backing off, but the upside bias remains and higher gasoline prices will eventually follow. Aluminum prices are at seven-year highs, due in part to sanctions on Russia. Lumber prices are surging to all-time highs as well, crushing homebuilder stocks that already have labor and supply issues.

On the issue of inflation, the Federal Reserve will have to use its bully pulpit to let markets know they will resist the urge to overreact with too many rate hikes. Producer prices are gradually edging higher, as they are being passed onto consumers.

I also continue to stress that there is a new consumer out there who learned valuable lessons from the Great Recession. Consumers are more confident but scared. While they will spend more, they will not get over their economic fears for a long time.

 2. Pricing Power

An example of businesses not being able to pass along price increases comes from Procter & Gamble (PG), which saw its shares slump yesterday on financial results that revealed price declines across all of its business segments.

3. The iPhone

Weak numbers from Taiwan Semiconductor (TSM) sent shares of companies in the iPhone supply chain diving lower yesterday. It’s hard to invest based on anecdotal news associated with Apple (AAPL) and suppliers because there always seems to be stories of lower demand circulating.

A lot of semiconductor names with minimum AAPL exposure took it on the chin as well, but that’s creating buying opportunities I’m keeping an eye on. I’m holding AAPL in my retirement account. In many ways, it has been the most undervalued stock in the market for years.

4. Intangibles

Headlines from around the world of politics have wreaked havoc on the stock market this year. The Russia investigation has moved in so many directions that it feels like an old Vaudeville production, and yet every twist and turn is talked up as a potential constitutional crisis.

Yesterday the pendulum swung the other way with reports that Deputy Attorney General Rod Rosenstein informed President Trump last week that he isn’t the target of Robert Mueller’s investigation. There are also reports that Trump wasn’t the focus of the raid on his lawyer’s office, home and hotel room.

The market spurted on the news, albeit a lot less than it would have crashed if the news was the exact opposite. Hence, it’s one of the reasons investors must be leery of making investment decisions based on scuttlebutt and media coverage of Washington, D.C.

I suspect there will be more bombshells and even more speculation about these lingering investigations, but remember that it’s only noise.

The Bottom Line

The market looked antsy this morning as the Street continues to digest the flow of earnings and continued pressured on tech from yesterday.

I am busy crunching numbers this morning as well. I’m analyzing chip names very hard and am ready to pounce. Overall, I like what I’m seeing in this market and how it’s held at pivotal moments. The inability to breakout remains frustrating, but I remain excited about what’s to come as the economy continues to show strength and stocks are becoming more undervalued each day as companies report strong earnings.