Tomorrow's Market Tonight: Bonnel Growth Fund: 'People Are a Little Scared'

In such an environment, Bonnel likes brokerage stocks, because he expects the group to benefit from renewed investor confidence. He likes Merrill Lynch (MER), which traded 1 1/16 higher to close at 67 1/4 and PaineWebber Group (PWJ) which closed up 3/16 at 30 3/16.

With the Christmas season approaching, Bonnel is also going to be watching for upticks in retail stocks. Not only have they shown strong earnings during the last round of reporting, he says, but renewed strength in the stock market will give people the confidence to go out and buy more in December. "It's a self-fulfilling prophecy," he says. Among the companies he'll be watching: The Gap (GPS), Sears Roebuck (S), Home Depot (HD), Nordstrom (NOBE) and Claire's Stores (CLE).

When it comes to technology firms, Bonnel is a little more hesitant. He says he'll be shying away from the biggest names like Microsoft (MSFT) and Intel (INTC), and focusing instead on smaller companies, like software maker Wind River Systems (WIND) and Smart Modular (SMOD).

Bonnel is expecting the weekly initial jobless claims figures, which will be announced Thursday, to show the effects of recent U.S. layoffs. In the long-term, he says, that will positively impact the market as wage pressures soften. Generally, he doesn't think this month's labor figures will have as much impact as next month's, which will start to reflect the economic turmoil in Asia. All in all, Bonnel says, "the market's a lot healthier than people think."