David Nelson is chief strategist of Belpointe Asset Management and a Moneynews contributor.

U.S. stock market performance this year reminds me of the Goldilocks economy of the 1990s. Economic growth is only averaging a 1.4 percent run rate, which is hardly anything to write home about.

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We created just 162,000 jobs last month. Friday's report only missed consensus by a small margin, but hours worked ticked down once again. Unfortunately, a large number of jobs being created are part-time. There are secular and political forces in place that support a continuation of this trend.

While none of this is constructive for job seekers or the real economy, a weak jobs report isn't necessarily bad news for the markets. Corporations are lean, mean, fighting machines and have learned to produce more with less.

Some employment trends like "on-call scheduling" are hitting workers and their paychecks hard. In retail, many employees are forced to call-in a few hours before their shift to check if they are needed for the day. Others may be sent home early if the company finds it is overstaffed given the workload.

Again, these trends are disturbing news for our economy and those looking for a job, but they definitely help the bottom line of corporations. Our economy is not strong enough to support real job growth. We need at least 300,000 jobs per month to change this trend.

Supply and demand dictates stock prices, and it also dictates wages and employment levels. For now, part-time employment will remain the answer for many.

Earnings

We are two-thirds of the way through second-quarter earnings reports. Financials are the clear standout, with 64 percent delivering positive surprises.

The biggest disconnect I see at the moment is the performance of emerging markets versus the Standard & Poor's 500. While the S&P 500 is up strongly year to date, emerging markets, as represented by the iShares MSCI Emerging Market (EEM) exchange-traded fund, are down substantially. The S&P 500 S&P 500 and EEM are headed in opposite directions. I wouldn't be surprised to see that gap narrow.

The Fed

Federal Reserve Chairman Ben Bernanke has spent most of the last month walking back comments from the June Federal Open Market Committee meeting. It is clear he will be leaving the Fed at the end of his term and speculation mounts as to who will take the baton. Current Vice Chair Janet Yellen and former Secretary of Treasury Larry Summers are the current favorites. Recently, President Obama threw another name in the ring when he mentioned Donald Cohen, former Fed vice chairman and longtime aide to former Fed Chair Alan Greenspan.

The markets clearly want Yellen, as she is most likely to continue Bernanke's policies. Many market participants believe Summers would start the unwinding process sooner.

The biggest concern I have regarding the Fed is the increased interference by those from both sides of the political aisle. Many in Congress and the administration want to politicize it. Some say it has already happened. While flawed, the Fed can only function as an independent body.

Congress can't even put a budget together. Do we really want the hill to start making decisions on monetary policy?

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