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

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 S&P 500 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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