A little bit of inflation keeps the sellers away. It's fascinating how well large-cap stocks are doing this earnings season. This continuing sentiment is really becoming apparent as big, brand- name companies report excellent earnings results.

The bumps along the road are being overemphasized by the marketplace, which is a sign of how fragile the state of the market is. With this in mind, I'm really surprised by the profitability of large-cap companies and can only surmise that the reason for this improvement is more pricing power due to increased inflation in the economy.

Corporations were already running very lean operations, but competition is fierce. Only with wholesale and retail price inflation are most large-cap companies able to grow faster than the economy.

How about Colgate-Palmolive Company (NYSE/CL)? This outstanding wealth creator stagnated from 2000 to 2005, generating only modest growth from its operations. Now, with an improvement in pricing power, the company's net income grew an impressive 47% in the latest quarter. Revenues were up a solid 13%. This is a very good performance, especially considering the company's value is over $34.0 billion.

How about eBay, Inc. (NASDAQ/EBAY), and Amazon.com, Inc. (NASDAQ/AMZN)? We talked about General Electric Company (NYSE/GE) and IBM Corporation (NYSE/IBM) in a previous column. Even The Boeing Company (NYSE/BA) is doing great.

With a few exceptions, large-cap companies are doing exceptionally well, and it's no wonder that the major stock market indices are hitting new highs.

As for the future, I think the momentum in the large-cap sector of the market is strong enough for us to finish with a strong performance this year. I can't escape a gut feeling, however, that we're in for a small correction beforehand.