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Analyst Watch: Second-Half Stocks for Bulls and Bears

U.S. stock index futures struggled to find direction ahead of the open Thursday, with momentum waning after the strong previous session and ahead of economic data on retail sales and unemployment benefit claims.

The major indexes all saw gains of around 3 percent by Wednesday's close after State Street [STT 36.63 3.29 (+9.87%) ]gave an upbeat outlook, which boosted investor sentiment.

European shares were higher Thursday ahead of interest rate decisions from the European Central Bank and Bank of England. Both central banks are expected to keep rates on hold, but comments from European Central Bank President Jean-Claude Trichet could give clues on the economic outlook.

Also in Europe, the bank stress tests remain in focus with details of the methodology limited. Asian shares ended mostly higher on the back of Wall Street’s rally.

So is it time to be bullish or bearish?

Here's what guests on today's Squawk on the Street are watching before the opening bell:

Bull Trades

David Katz, chief investment officer with Matrix Asset Advisors, says he expects stocks to have a meaningful rebound over the next six to 18 months based on:

  • No expectations of a double-dip recession
  • Investors are approaching this market with a 2008 playbook
  • Corporations continue to prosper
  • Valuations are compelling

Katz's favorite industries/sectors are industrials, technology, banking and energy. His "table pounding" buys in these areas are:

Devon Energy

Corning Glass

Dell

eBay

JPMorgan

Microsoft

Western Union

Bear Trades

Keith Springer, president of Capital Financial Advisory Services, expects to see the Dow at 8,200 by year's end and the S&P 500 and Nasdaq at 20 percent below today's close.

So what does he like under those circumstances? Dividend-paying stocks and corporate bond Transocean 2013.

Individual stocks he likes include:

Gold ETF

Legacy Reserves

Linn Energy

See more of what these and other analysts and money managers have to say, and get the latest financial news. Watch Squawk on the Street every weekday morning starting at 9 a.m. ET.

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  • Carl Quintanilla is an Emmy-winning reporter and co-anchor of CNBC's "Squawk on the Street," broadcast live from the NYSE.

  • Simon Hobbs co-anchors the 10 a.m. hour of CNBC's "Squawk on the Street" live from the New York Stock Exchange.

  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

  • “Squawk on the Street” Co-Anchor

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.