The stock market was in full-tilt party mode until mid-May, when the music came to a sudden stop; all it took was a whiff of inflation, confusion about the Federal Reserve's intentions and plunging emerging markets. The rose-colored glasses are off, and the Wall of Worry is on the rise. At 11 blocks, bargains aren't plentiful yet, but putting together a stock wish list isn't a bad idea.
The worries
1. Interest rates: New Fed chairman, new tea leaves, new uncertainty. The 25-basis-point hikes just keep coming; it's like water torture for investors. One thing is for sure: There'll be no more off-the-record comments at the dinner table by Chief Ben.
2. Inflation: What's the big deal? Adjusted for food, energy, housing, wages, health care, packaging, travel and commodity costs, it's relatively tame.
3. U.S. economy: We hear the first whispers of a "soft landing" and hope that's the full extent of the slowdown.
4. Oil prices: Still too high. Maybe we can persuade China and India to take the rest of the year off.
5. Consumer spending: Confidence shaken but not deterred. This economic driver will die hard.
6. Housing bubble: Prices of spec homes shrink. If residential markets hit a sinkhole, that would really hurt.
7. Iran: Can flip a switch and wreak havoc with stocks any day it pleases.
8. Corporate earnings: Conference calls herald buoyant first-quarter results but are tempered by uninspiring forecasts. Killjoys.
9. U.S. dollar: Struggling versus the yen, euro, yuan and loonie. When Monopoly money hits the list, we panic.
10. Volatility: A wise man once said, "It's not the volatility in the stock market that bothers me; it's the drops." Vol is back. Get used to it.
11. Emerging markets: What goes up must come down. The problem is that these fall twice as hard as the rest of the world's markets.
Looking ahead
Stagflation: Not imminent, but a paranoid market might start fretting about it anyway. A 1970s redux we don't need.
Hurricane season: It's back. The bad news: Refineries are still running at less than 100 percent, and New Orleans's levees are questionable. The good news: FEMA may be eliminated.
