Despite sell-off, economy in great shape and Dow 'still marching towards 30,000,' money manager says

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The recent market sell-off is not an indication of the nation’s economic health, Wall Street analyst Neil Hennessy told CNBC on Tuesday.

In fact, he said, many indicators show that the U.S. is in “great shape.”

“When I look at the market and economy, they’re completely different,” the Hennessy Funds investment chief said on “Power Lunch.” “I think we’re still marching towards 30,000” on the Dow Jones Industrial Average.

While volatility has crept into equities, “the economy’s in great shape,” Hennessy added. “The job numbers are in great shape. Corporate cash is in great shape. Cash flow’s up. The whole nine yards.”

He said he would look for value because it is always in the market in both good times and bad times.

U.S. equities have had a rocky month. The Dow is off by 6.9 percent, its worst performance since May 2010. The S&P 500 is down 8.7 percent in October, its worst month since February 2009.

The recent action prompted “Mad Money” host Jim Cramer to assert on Monday that “the stock market is signaling that the economy is in for pretty rapid deterioration, just like 2008 … fortunately, there’s no systemic risk.”

Jason Pride, CIO of Glenmede Trust Company, agrees with Hennessy. He said his firm would not change its portfolios “all that much” as its strategy has been to tilt portfolios “towards defensiveness and towards value.”

Glenmede has been concerned about the narrow growth in glamour stocks roughly over the past year, Pride said, but there’s more to come.

In order to broaden the base, Pride says: “Come in at lower valuation levels, set up for the next part of this ongoing bull market, we think makes sense, but it doesn’t mean that investors should be really reacting that dramatically.”

Looking forward over the next 12 months, Hennessy said, the market reminds him of the phase between 1982 and 2000 when “the market was up each and every year” except for 1990.

“The bottom line is, if you’re just patient, you’re going to make money,” although not as much as in 1999, Hennessy said.

“The difference is there’s no euphoria in this marketplace, and that’s what would actually end the bull market,” he said.

— CNBC’s Tom Franck contributed to this report.

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