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Strategists Bob Doll and Jim Paulsen: Investors remain skeptical about investing in the US

  • Sentiment surrounding the U.S. market remains skeptical, say closely followed strategists Bob Doll and James Paulsen.
  • Paulsen says the number of "pronounced" factors that investors are worried about remains high.
  • Doll agrees and adds, "There aren't a whole lot people who are euphoric or kind of can't wait to get in."

Closely followed strategists Bob Doll and James Paulsen agreed Tuesday that sentiment surrounding the U.S. market remains skeptical.

They spoke after U.S. stocks opened higher Tuesday as investors breathed a sigh of relief after it appeared tensions between the U.S. and North Korean would ease.

In an appearance on CNBC's "Squawk on the Street," Paulsen said U.S. economic momentum and earnings are pretty good. But the number of "pronounced" factors that investors are worried about remains high, he said.

"Interest rates aren't up this year … the 10-year yield [is] actually down year to date, the dollar has fallen 10 percent, liquidity growth is still growing faster than nominal GDP, so excess liquidity," said Paulsen, chief investment strategist at Leuthold Group.

"You're supposed to be worried ... because valuations are high, VIX is too low, we're in a bad seasonal part of the calendar, we've got too much FAANG concentration," he said. "We should be worried about the Fed. We've got geopolitical risk and nuclear holocaust."

Doll, also on "Squawk on the Street," said Paulsen "hit the nail on the head."

"There's still a lot of skepticism as represented by the kinds of questions I get asked when I go out and talk to financial advisors, by the amount of cash sitting on the sidelines. There aren't a whole lot people who are euphoric or kind of can't wait to get in," said Doll, chief equity strategist at Nuveen Asset Management.

Regarding North Korea, Doll said the markets appear to be moving on. He said North Korea tensions, although "not fun," are nothing new for the U.S.

Instead, the market is focusing on recent economic data, he said. "The economy is doing just fine, thank you, and earnings haven't been so bad either," he added.

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