The market decline on Friday may very well have been a "panic attack," but stocks should recover and head higher, noted market watcher Ed Yardeni told CNBC on Friday.
In an interview with CNBC's "Power Lunch," Yardeni said he sees the hitting 3,100 by the end of next year, about a 20 percent gain.
"We're sort of in the early phases of a melt-up," the president of Yardeni Research said.
Stocks dropped dramatically Friday on a report that former National Security Advisor Gen. Michael Flynn was directed by President Donald Trump to talk to Russians. They later recovered much of those losses after Sen. Majority Leader Mitch McConnell said Republicans had enough votes to pass their tax bill.
"We've had 58 panic attacks in this bull market and every one of these panic attacks has been followed by a relief rally," Yardeni said.
The reason for his bullishness is earnings, which he expects to be great.
"The global economy has never really looked better, quite honestly. It's a synchronized global boom and we're seeing more and more of that strength in the United States," he said.
Katie Nixon, chief investment officer at Northern Trust, sees Friday's market action as a reinjection of short-term political risk into a market that's selling at high valuations.
"We're nearing the end of the year when investors want to lock in some gains," she said. "We've been so comfortably numb with the market in the last year or so that even a little volatility feels very volatile. This is normal."
She told "Power Lunch" she is "absolutely" going to continue piling into stocks.
"We don't have tax reform earnings built into earnings estimates for next year. Look at the fundamentals. They're so strong."