No stock bubble yet—and here's why: BlackRock

Markets are 'expensive' here: Koesterich
Markets are 'expensive' here: Koesterich

The stock market is expensive, but it's not in bubble territory, BlackRock's Russ Koesterich said Monday, with the Dow Jones industrial average just below its record close and the 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.

Read MoreWhy stocks shouldn't fear the 'Mayan temple effect'

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."