Stocks are nearing record highs in spite of global worries like the coronavirus outbreak. While there have been short-lived selloffs as the outbreak worsened, on the whole the market appears unfazed.
The reason? Low interest rates, David Kelly, chief global strategist at JPMorgan Asset Management, told Alison Kosik on the CNN Business digital live show Markets Now.
Central banks around the world are holding interest rates low, which is keeping money flowing into stocks. Low rates support equities as they imply lower borrowing rates for companies.
"Markets are almost oblivious" to other events given how low interest rates are, Kelly said.
A further interest rate cut from the Federal Reserve would boost markets further, but "unless you actually see the US economy threatened by recession, I don't think the Fed will cut rates," Kelly said.
However, this year's presidential election could cause a correction, he said.
"Markets don't like extremism," Kelly added, citing how well the market has done under a divided government since the mid-term elections.