US Economy

We're nowhere near a euphoric bull market, Bob Doll says

Doll: Market moving from cautiousness to optmisim, with euphoria down the line

December's uptick in consumer confidence suggests that the bull market in the United States can still extend far into the future, albeit with a few bumps, Nuveen's chief equity strategist, Bob Doll, told CNBC on Tuesday.

"We've spent this entire bull market with nobody believing it. The caution, the concern, 'The next downturn's going to kill me,' and now we're beginning to have people feel a little bit better. That's always a good sign, and bull markets don't end until you get that euphoria," Doll said.

"We're nowhere near that. We may be moving from cautiousness to optimism, but euphoria's down the line somewhere," he told "Squawk on the Street."

Doll said that confidence always helps the economy do better, though too much optimism could pose a problem if the cause for that isn't justified.

"If people feel better about life, no matter what policy is, they spend a little more money," he said. "The question is, is the confidence coming back so fast that no matter what happens, the markets can't deliver, the economy can't deliver? We'll see."

But even if pumped-up confidence does pose a threat, signs of growth ticking up in the United States in 2017 could provide a basis for that positive outlook, Doll contended.

"I think as long as the U.S. growth expectations move higher, as long as the dollar is moving higher, this says the U.S. is where it's happening. Stronger growth differential, the interest rate differential, I think this points to further strength in the U.S. versus the rest of the world," he said.

"We're completing the seventh year in a row where the U.S. has led, so it won't happen forever, but I think the signs are still there, at least early in the year," Doll added.

US economy needs productivity boost to hit high gear: Expert

But while confidence on the whole rose, consumers' view of current conditions declined, a statistic Pimco strategist Tony Crescenzi said would be an obstacle for 2017.

"That surge in confidence, interestingly, the highest in 15 years, was mostly on the back of higher expectations. How consumers assess the present actually declined. And that's the challenge for 2017 and beyond," he told "Squawk Alley" on Tuesday.

For growth to kick into gear for the long term, the U.S. economy requires a boost in productivity, Crescenzi said.

"The move in stocks, of course, reflects optimism about Trumponomics, it reflects a view that economic growth in the short run will be boosted, but for financial asset prices to continue moving, particularly for equities to rally or for bond yields to continue rising, there has to be a permanent change in the trajectory for economic growth beyond what Pimco has called 'the new normal,'" he said.

The "new normal," said Crescenzi, who is also a Pimco executive vice president, is a 2 percent growth rate. To get it back to the "old normal" of 3 percent growth, there needs to be a major change in productivity, he contended.

"Ultimately, that means educating people and investing in the nation in ways that lift growth over the long term, and that's been something that's missing for quite a long time globally," he said.

Tech stocks a good bet in 2017?

U.S. Bank equity strategist Terry Sandven said on "Squawk Alley" that he expects equities to trend higher in the new year. Although 20,000 for the Dow Jones industrial average would be a notable milestone, he said, it is reflective of underlying economic strength.

Technology stocks — which were originally laggards during the so-called Trump rally — have outperformed recently. Walter Price, senior portfolio manager at Allianz, said on "Squawk Alley" that it could be due to the money that was initially flowing out of technology and into some of the cyclical sectors like industrials and banks. Price also said the semiconductor industry should see good demand next year.

— CNBC's Antonio José Vielma contributed to this report.