While many investors are focusing on the machinations in Washington over the budget and debt ceiling, the real problem confronting stocks is revenue and earnings, says Hersh Cohen, co-chief investment officer at ClearBridge Investments.

"Revenue growth is hard to come by and earnings are generally disappointing," he tells Yahoo.

The stock market has risen 17 or 18 percent this year, while earnings have gained 6 percent, Cohen notes.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

So it's been an increase in price-earnings multiples that have accompanied the market upward.

"A lot of people will want to chase this market [higher]," Cohen adds.

What's hurting corporate earnings is the fact that we've never fully emerged from the 2008-09 financial crisis, Cohen explains. "It wasn't your garden-variety recession. . . . This was an asset collapse like the 1930s. . . . There are still too many debt headwinds on consumers."

The fact that revenues aren't great for Target, Wal-Mart and UPS "tells you people are kind of struggling," Cohen argues.

As for the stock market's direction, "it probably struggles from here and may make a new high," he says.

Stocks surged Wednesday, before the agreement on the shutdown and debt ceiling was passed by both houses of Congress.

"Investors are relieved that it looks like we're not going to go over the cliff," Ben Hart, a research analyst at Haverford Trust, tells Bloomberg.

"It takes the worst-case scenario off the table."

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

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