‘Good Signs Going On in US’: Goldman’s O’Neill

Equities are the way to go for some investors, Goldman Sachs Asset Management Chairman Jim O'Neill said Wednesday on CNBC.

"The equity risk premium is very high. People worry about everything all the while, characteristic of this whole rally going back, actually, since '08. And so I think there are plenty of ways we get decent returns going forward, " he said.

In his October letter to clients, O'Neill wrote: "Now is a good time to be favoring equities over bonds in asset allocation decisions for medium- to long-term investors."

On "Fast Money , " he pointed to managed expectations ahead of earnings season, saying that "the hurdle to positively surprise isn't that great."

"But I think on top of that, the macro data in the U.S. has taken a further turn for the better, " he added.

Within Bank of America 's quarterly results, O'Neill also saw strength in mortgages.

(Read More: Bank of America Posts Profit; Shares Move Lower )

"There's a look at fantastic housing numbers we have today, and I think in that space there's a lot of positive dynamic going on, which is raising more and more people to think that, at least with the private sector, you've got some sustainability going because of housing going into the banks and possibly in terms of lending and beyond, " he said. "That hasn't really been in any of these mini-recoveries of the past couple of years."

O'Neill alluded to further economic improvement that could be spurred.

(Read More: Wilbur Ross: Banks 'Too Complex to Manage' )

"If you get a little bit of goodwill from Washington, then maybe, maybe this is not 2 percent GDP, going less than 2 percent, but 2 percent going on to 2½ percent and more, " he said. "I think there's a bit of that mood creeping in, and I don't it's unjustified myself. I think there are some good signs going on in the U.S."

Trader disclosure: On Oct. 17, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long CREE; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long SBUX; Joe Terranova is long NFLX; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long XOM; Joe Terranova is long CVX; Joe Terranova is long COP; Joe Terranova is long SU; Joe Terranova is long CSTR; Joe Terranova is long GS; Joe Terranova is long CHKP; Joe Terranova is long SNDK; Joe Terranova is long NXPI; Joe Terranova is long GLW; Joe Terranova is long EMC; Pete Najarian is long AAPL; Pete Najarian is long JPM CALLS; Pete Najarian is long WFC CALLS; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Steve Grasso is long ACI; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long BTU; Steve Grasso is long CLD; Steve Grasso is long CLF; Steve Grasso is long F; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN; Josh Brown is long AAPL; Josh Brown is long QCOM; Josh Brown is long IBM.

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