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Pullback worries are not derailing Jim Paulsen's bullish forecast for 2600 on the S&P 500

Wall Street bull Jim Paulsen isn't downplaying risks that a stock market pullback is climbing. He acknowledges one will be in the cards… eventually.

Right now, he's arguing that the S&P 500 will get to 2600 this year before the rally suffers a setback. If his forecast proves correct, that means a five percent gain from current levels.

"We're going to continue to go higher for most of this year. We've got a pretty good environment where we've got real growth that's okay — it's not spectacular — but it's okay," said Paulsen recently on "Trading Nation."

He added: "I wouldn't be surprised if the market keeps irregularly moving higher yet before we do have a recession down the road. But it doesn't mean it won't be interrupted."

'Multiple years' before next recession

Paulsen, who's the chief investment strategist at the Leuthold Group, cites strong job creation and wages, rising corporate profitability and strong confidence levels as catalysts for the continued bull run.

"I'm at this point still in the camp that there might be multiple years left before the next recession," added Paulsen. He noted that it's key the markets haven't had to cope with any noticeable inflation or interest rate pressures.

Paulsen's latest take on the market comes investors watched the major indexes cross over to all-time highs, only to end the week mixed. The S&P 500 closed the week on a three day losing streak, while the Nasdaq saw just its first negative day in eleven.

The latest activity comes just a couple of days before the street will digest another big batch of second quarter earnings.

In the next round, investors will hear from big tech stocks Alphabet, Facebook and Amazon, which have played a sizable role in the stock market rally. It's a group Paulsen views favorably.

"I think the growth of tech in a world economy that is suffering from its slowest growing recovery ever is really attractive and probably should receive a premium valuation for growth which is scarce in the world today," he said.

Tech isn't the only area he's recommending.

"I also like the materials, energy sector and industrials. And if rates are going to go up, and I believe they will, I think the financials are going to do fairly well here over the next year," Paulsen said.

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Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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