Forget Greece and China because according to market analyst Peter Boockvar, there only two things investors should be focused on right now: earnings and interest rates.
"Earnings growth has slowed to almost nothing, profit margins have topped out and I think that's going to be a growing focus of market participants," Boockvar said Tuesday on CNBC's "Futures Now."
And even though Boockvar expects second-quarter earnings to largely beat expectations, he doesn't consider it a positive sign for stocks. "Around 70 percent is the normal beat rate, so if we get that we should stay in line for the quarter," he said. "I would use that line at 70 percent as a gauge to dictate if it's good or bad."
But perhaps more so than earnings growth, Boockvar said investors should turn their attention to what's been happening to the yield curve.
"As much as we want to focus on the Fed and whether they will move short-term rates or not, we've seen a rise in long-term interest rates," he said. Boockvar noted that the market the yield on the U.S. 10-year has risen sharply in the past three months, from 1.9 percent in late-April to the current 2.4 percent.
"Essentially the long end of the yield curve has tightened policy by more than 50 basis points and the two-year/10-year spread is the widest we've seen since late last year," said Boockvar, managing director at economic firm The Lindsey Group. "That's what people should be focusing on, because even if the Fed doesn't raise rates, the long end of the curve is in the process of doing it for them." Market participants often look at the yield curve to forecast where interest rates will be in the future.
"Bottom line, global economic growth is mediocre, the U.S. can't get out of its 2-2.5 percent GDP range, earnings growth is slowing to flat line, profit margins have peaked and interest rates are trending higher," said Boockvar, a CNBC contributor. "Investors should be more inclined to be playing defense than offense, especially with U.S. stocks that are way overvalued."
Fed Chair Janet Yellen is set to hold a semi-annual monetary policy testimony on Wednesday, and Boockvar expects her speech to echo past commentary.