Hedge fund guru Barton Biggs says the economy has slowed, but he remains bullish on U.S. stocks.

“The U.S. and the global economy have clearly slowed pretty significantly,” Biggs tells Bloomberg Surveillance. “That’s arousing the bears, who believe we’re going to slip back into a long soft patch at best or maybe even a double-dip at worst. For a number of reasons I don’t think that’s right.”

Biggs says investors are overreacting to news like the European debt crisis and the recent drop in housing starts, which was weather-related. One area he likes is large U.S. industrials. “I don’t see anything the matter with Deere and Caterpillar and the big American industrial companies, and in terms of valuation they’re still very reasonable,” he said.

Biggs also likes emerging markets, and is quite high on China. He says China has succeeded in slowing its overheating economy, but that growth will still be a solid 7% to 8%. “We can find a lot of attractive companies to own in China,” he says. “China is going to be a terrific stock market in the second half of the year.”