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What Does Third Year of Bull Market Mean for Economy?

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."

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Scorecard—What She Said:

  • Deans' Previous Appearance on CNBC (Jan. 30, 2011)

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More Market Intelligence:

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CNBC Data Pages:

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CNBC Slideshows:

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CNBC's Companies in the News:

Wal-Mart

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GE

Amazon.com

Nokia

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BP

  • BP Downgraded by Brokerage House; Shares Fall

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Disclosures:

No immediate information was available for Deans or her firm.

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Disclaimer

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