But O'Neill added there also are a few worrisome signs such as the broad government spending cuts known as "the sequester" in Washington and new uncertainties about politics in Spain and Italy.
Taken as a whole for U.S. stocks, "the underlying momentum for the rest of the year is very favorable," he argued. "[And] rushing to sell if you're a medium term player is probably not a smart move." Though, he added, he does think a correction is possible, and for investors who've locked in a profitable January, taking some money off the table "is not a crazy idea either."
"The scale of the rallies we've seen in January means you got to ask those kind of questions because nothing goes in a straight line."
As for China, O'Neill said he's always been skeptical of the slowdown storyline and thinks further Chinese economic data will show further strength. "More importantly, China is adjusting to an economy not so dependent on exports and government investment.
He also expressed optimism about Japan and the economic revival plans being pursued by the government there.
—By CNBC's Matthew J. Belvedere; Follow him on Twitter