European populism and rising wages could disrupt the rally, experts say

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The market just keeps on rising, with the Dow Jones industrial average hitting 21,000 just a few weeks after smashing past 20,000 — but that doesn't mean it's unstoppable, as two experts told CNBC that problems are starting to bubble up.

David Nelson, chief strategist for Belpointe Asset Management, told "Power Lunch" that he's increasingly concerned with rising populism in Europe. Kicked off last summer by Brexit, the populist wave is currently sweeping through France and the Netherlands with candidates like Marine Le Pen and Geert Wilders campaigning to lead the nations. Both have discussed referendums to leave the European Union if elected.

"If you look at Europe, there's a rising populist message," Nelson said. "You know, some of these countries and some of the people want to pull out of the EU."

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And current trends indicate this could be disastrous for the markets, he says. Most notably, the rising spread between French and German debt could become a huge issue if France ditches the euro and adopts its own currency.

"[I]f, in fact, a country pulled out of the EU, than the euro-denominated debt would switch to the local currency," he said. "That would be one of the biggest defaults in history."

Domestically, many traders seemed worried about the Fed hiking interest rates. But now, with a 70 percent chance that it raises rates in March, Allianz NFJ Investment Group Chief Investment Officer Burns McKinney says that shouldn't affect the market too much.

"I think the stock market has largely priced in one, two, probably three rate hikes this year," he said. The thing he expects to dampen the ongoing rally is rising wages. McKinney says we're already seeing that happen, and in time it may start affecting corporate profit margins. If you're one of the people who think this is an earnings-driven rally, not a Trump rally, that's bad news.