NEW YORK (TheStreet) -- U.S. stocks headed higher on Tuesday despite a lack of clarity between Greece and its creditors. Speaking on CNBC's "Fast Money Halftime Report" show, Mohamed El-Erian, chief economic advisor at Allianz, said he believes there's a 55% chance that Greece won't get a new deal.
While El-Erian acknowledged a short-term deal could happen, he doesn't think a deal will be in place before Greece is able to implement the necessary reforms to turn around its struggling economy.
Although there have been concerns about possible contagion -- meaning other struggling countries also leave the eurozone -- El-Erian doesn't see that as being the case. In 2010 or 2012, there was a higher likelihood of contagion, he said. More recently, however, some of these struggling nations, such as Spain and Italy, have made a lot of changes in order to improve, he said.
The fact that Greece is the weak chain in the link also appears to be giving its negotiators (the European Central Bank, European Union and International Monetary Fund) more leverage when it comes to its demands. It could be a matter of months before Greece exits the eurozone, El-Erian said.
The assumption by most on Wall Street is that if Greece fails to reach a new deal, this will send U.S. stocks lower, according to Stephen Weiss, founder and managing partner of Short Hills Capital Partners LLC. Those investors tend to believe a sharp rally will ensue, he said.
Josh Brown, CEO and co-founder of Ritholtz Wealth Management, pointed out that a majority of investors are not positioned for a Greek exit from the eurozone.
Pete Najarian, co-founder of Optionmonster.com and Trademonster.com, made the case that U.S. health care and large-cap biotech stocks remain attractive. Weiss agreed.
While there's still the risk of a Greek exit hanging over European stocks, they are still more attractive than U.S. stocks, said David Herro, portfolio manager and CIO of international equity of Oakmark International Fund.
"Valuations are a touch stretched" for U.S. stocks, he said, adding that the strong U.S. dollar and low economic growth make it hard to find attractive stocks. While European companies tend to have lower profitability and aren't as well-run, they have far lower valuations at current prices.
Herro likes the stocks of European banks and argued that they have "very limited direct exposure" to Greece. While a Greek exit will cause some volatility, the situation will finally provide clarity to investors and this may help stock prices.
The conversation turned to Google (GOOGL), after Herb Greenberg, partner at Pacific Square Research, said a day of reckoning could be in store for investors. Google's stock-based compensation is "one of the great risks nobody is talking about," he said.
The compensation is growing fast, posting year-over-year growth of 43% in last quarter alone. This is vastly outpacing revenue growth, which only climbed 11%, compared with the previous year's rate of 19%. Google's growth is slowing, yet its costs are rising.
The difference between GAAP and non-GAAP earnings is increasing, Greenberg continued. Most recently, the two figures were 24% apart. In other words, unless Google can quickly grow its earnings going forward, investors will start asking serious questions, which will ultimately lead back to its bloated stock-based compensation.
If Google can't accelerate growth, its stock is overvalued, Greenberg said of the maturing tech titan. This issue won't create a stir just yet, but could become an issue over the next few quarters.