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Stock Market Isn't Overvalued at Current Level: Economist

Allen Sinai, chief global economist at Decision Economics, told CNBC’s “Morning Call” that the stock market is not overvalued.

“Core inflation has moved down,” Sinai said Tuesday. “We were 2.4% year-over-year, and now we’re 1.9%."

He pointed to other indicators: "The economy dodged a bullet on housing -- it didn’t take the economy down. We’re growing at 3% plus [and] we’re going to grow at 2.5% or 2.75% the rest of the year. Performance parameters for the U.S. economy look great for this stage in the business expansion. Core inflation has come down, the unemployment rate is low."

"The world economy is in good shape, the Fed is on the sidelines -- they’re not going to raise rates or lower rates. That is a beautiful macro fundamental picture for the stock market and we are not at all overvalued at this point.”

Sinai said Federal Reserve Chairman Ben Bernanke gets high marks.

“I give him an 'A-plus' because this is a Fed in a very delicate situation on growth and inflation, that has stuck with 5.25% all the way through -- and look at what we’re getting as a result of that,” Sinai said. “How can we not give them a good grade at this point?”

Mike Englund, chief economist at Action Economics, said the economy has been growing at a healthy clip with “relatively low inflation.”