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Big 'cascade of change' coming to market: Jim Paulsen

Economic momentum may finally be returning after two years, and that could "radically upshift" investor sentiment, one market watcher said Friday.

"I think we're going to have a pretty big cascade of change in the rest of this bull market," Jim Paulsen, chief investment strategist for Wells Capital Management, told CNBC's "Closing Bell" on Friday. "Up until now, across the globe, it's been led by three main themes: large cap, United States and consumer-oriented stocks. I think going forward, all three of those leaderships are in the process of changing."

The S&P 500 was within 1 point of its record close of 2,130.82 at Friday's closing bell after a key indicator, the jobs report, surprised to the upside. On this tailwind, Paulsen said small- and mid-cap stocks, international and emerging markets, and industrial capital goods sectors may take the reins.

The market is breaking out with earnings season on the horizon — and another pro sees structural shifts, like exports, accelerating S&P 500 revenues and earnings in the second half of the year.

"There's a very large set of stocks and sectors that are still buyable here because of a turn in earnings," Thomas Lee, managing partner and the head of research at Fundstrat Global Advisors, told "Closing Bell" on Friday.