The U.S. is suffering through a debt binge and it’s now going through deleveraging, which "dampens economic growth," said Allison Deans, senior advisor at Varick Asset Management and CNBC contributor.
“The thing that is a secular negative for the market and prevents multiple expansion is that we’re at the end of a third year bull market in bonds and the likelihood is greater for interest rates to go up and inflation to resurface and it’s hard to imagine that the P/E multiple will go up,” Deans told CNBC.
“As a result, the market’s going to be driven by corporate profits or growth of EPS in the S&P rather than multiple expansion.”
Meanwhile, Deans said she is optimistic that the turmoil in Japan, Libya and the Middle East will eventually subside and give investors a "longer-term buying opportunity."
Scorecard—What She Said:
- Deans' Previous Appearance on CNBC (Jan. 30, 2011)
More Market Intelligence:
- Positive Surprises Likely for Earnings: Fund Manager
- 6 Value Plays For Investors Now: Strategists
- Greenberg: Comparing Today’s Market to 1999
CNBC Data Pages:
CNBC's Companies in the News:
- Wal-Mart Preps for Court Showdown Over Gender Bias
- Nokia Files New Case Against Apple With ITC
- BP Downgraded by Brokerage House; Shares Fall
No immediate information was available for Deans or her firm.