Stock markets don't want a strong economy, since a resurgence in growth would mean the end of cheap money and heighten worries about inflation, said Bob Doll, chief equity strategist at Nuveen Asset Management.
"So many people want a strong economy. Beware of what you ask for. I think a decent economy is required for the stock market, but not a strong one," Doll said on "Squawk on the Street" Thursday. "A strong one will bring the questions, 'When is the Fed done? When is inflation coming back? When is the end of the cycle?'"
"If your objective is to find jobs for our kids, absolutely you want a strong economy," he added. "But if you want a strong stock market, at least in the near term, you want a good but not great economy."
Doll expects companies to begin spending more vigorously by the end of the year, hiring more workers and increasing capital expenditures, and although it won't result in a strong economy, we will be "heading in the right direction."
Stock markets will only go higher if companies show revenue growth, he said: "That's been kind of scarce of late. If we don't get revenue growth, the stock market will stop going up."
Doll doesn't see a big dip on the way, however, because commodity prices are down, central banks around the world are continuing to pump money into markets, and housing continues to improve, which "has huge economic and psychological impact," he said.
"I think we'll be OK, no better than that, but OK," Doll said, adding that the market is struggling with the potential of deflation, which would certainly have a negative impact on earnings growth.
Right now, though, the markets are getting the "benefit of the doubt" because of strong earnings, but this can only happen for "so long" if revenue growth falls short, he said.
Uncertainty is causing companies to hold on to cash or return it to shareholders via buybacks and dividends, but Doll noted, "It's not great for the economy, but great for the stock market."