Tags: Doll | economic | growth | stocks

Nuveen's Doll: Strong Economic Growth Would Be Bad for Stocks

Friday, 03 May 2013 09:35 AM

By Dan Weil

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While many investors are hoping for better after the U.S. economy expanded only 2.5 percent in the first quarter, fast growth wouldn't be good for stocks, says Bob Doll, chief equity strategist at Nuveen Asset Management.

"Beware of what you ask for," he tells CNBC. "I think a decent economy is required for the stock market, but not a strong one. A strong one will bring the questions, 'When is the [Federal Reserve] done? When is inflation coming back? When is the end of the cycle?'"

What you want from the economy all depends on where you're coming from, Doll explains. "If your objective is to find jobs for your kids, absolutely you want a strong economy. But if you want a strong stock market, at least in the near term, you want a good but not great economy."

Editor's Note:
Billionaires Dump Stocks. Prepare for the Unthinkable.

Regardless of the economy, corporate revenues will have to start growing faster to keep the record-setting stock market moving higher, Doll notes.

"That's been kind of scarce of late," he adds. "If we don't get revenue growth, the stock market will stop going up."

"I think we'll be OK, no better than that, but OK," Doll predicts.

Ethan Anderson, senior portfolio manager for Rehmann Financial in Grand Rapids, Mich., believes the economy may be just right for stocks now.

“It’s looking like the goldilocks type of scenario where the economy grows, not too fast for the Fed to stop helping, but not too slow to impede earnings growth,” he tells Bloomberg.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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