Wells Capital Management's Jim Paulsen predicts that the stock market will literally end the year with a bang as it charges into 2017.

"I think we're going to maybe find out we are finally turning northward on earnings momentum," Paulsen, Wells’ chief investment strategist, told CNBC.

Despite Tuesday's market tumble, Paulsen has turned bullish on the market after a very rough patch earlier this year.

Paulsen also said he hopes the Federal Reserve will finally raise interest rates before the year ends. "I think we'll get comfortable with it and more on."

But not everyone is as optimistic as Paulsen.

Bloomberg News recently reported that many Wall Street strategists, whose trepidation about everything from election politics to interest rates and valuations, are in an unusually bearish mood before this year’s holidays.

Since 1970, the S&P 500’s best quarter has been the fourth, on average, with the trend particularly prominent during the bull market that began in 2009. The benchmark gauge has climbed an average 6.7 percent from Sept. 30 through the end of the year during the 7 1/2-year run, more than twice the increase of the next-best quarter.
 

“You’ve got to have a reason to put money to work, and portfolio managers are sitting on what they have without taking direction,” said Tony Dwyer, co-head of U.S. equity research at Canaccord Genuity Inc. in New York. He has a target of 2,175 for the S&P 500. “You need to get changing fundamentals, some kind of oversold condition or further economic data to get anybody jumping out.”
 

Seldom have strategists been less bullish than they are now. They’ve called for gains in the equity market 82 percent of the time during the past decade, according to data compiled by Bloomberg. Yet even amid an 18 percent recovery in the S&P 500 since its low on Feb. 11, strategists have held their target price largely unchanged.

While one Fed official was optimistic about economic growth, he was far from advocating a rate hike anytime soon.

Minneapolis Fed President Neel Kashkari said the Fed should continue to focus on further progress in the U.S. labor market until inflation pressures emerge, Reuters reported.
 

"My view is let's let the economy keep creating jobs, bringing workers off the sidelines so long as it's not creating inflation," Kashkari said at a town hall meeting in Minnesota streamed live on the bank's website.
 

He added that given inflation has been below the Fed's two-percent target rate for more than four years, there appeared no urgency to raise interest rates.

Kashkari is not a voting member on the Fed's rate-setting committee until next year, but takes part in deliberations. Most Fed policymakers are backing a rate hike by year's end should the labor market and inflation continue to firm.

(Newsmax wire services contributed to this report).

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