No stock bubble yet-and here's why: BlackRock
The stock market is expensive, but it's not in bubble territory, BlackRock (NYSE: BLK)'s Russ Koesterich said Monday, with the Dow Jones industrial average (Dow Jones Global Indexes: .DJI) just below its record close and the S&P 500 (INDEX: .SPX) at a new high ahead of the open.
The price-to-earnings ratio for the S&P 500 is about 17.5 times, which Koesterich pointed out is a "bit above the average." But he said, "When you take into account ... a low inflation environment and you've got a low [interest] rate environment, that's probably in the right vicinity. It's a bit stretched, but I don't think it's a bubble."
Koesterich, BlackRock's global chief investment strategist, said on CNBC's " Squawk Box " that he believes expectations for a Federal Reserve rate hike are being pushed back-agreeing with sliding predictions for September or even December for liftoff.
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Hopes were high for the economy heading into this year, so the softer first quarter numbers seem even worse, he said, but warned, "you're starting to get to a point where the data is soft enough [and] earnings are also likely to be weak that it becomes difficult to sustain these [stock] valuations when eventually the Fed is going to remove accommodation."
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