Market euphoria could continue after Dow 20K, experts say

Experts say there may be more to come in the wake of Wednesday's slew of market records.

The Dow Jones industrial average (Dow Jones Global Indexes: .DJI) roared past the much anticipated 20,000 level at the market open, later setting a new closing high at 20,068.51. The S&P 500 (^GSPC) and Nasdaq composite (^IXIC) also hit fresh all-time highs in Wednesday's session.

President Donald Trump's flurry of executive actions have juiced the market, Kevin O'Leary, chairman of O'Shares Investments, told CNBC.

"What's changed really quickly is the 48 hours of watching President Trump deliver on his promises and driving through these executive orders at a pace that I've never seen in my life, and so there's a lot of optimism," O'Leary said.

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While some investors are worried that prices have run too far ahead of earnings, Jeremy Siegel, professor of finance at University of Pennsylvania's Wharton School of Business, said he believed the rally is justified.

Siegel, one of the first to call for Dow 20,000, said that tax reform and lower corporate tax rates are coming. But there are many other Trump policies that could boost the markets, Siegel told CNBC. The markets haven't fully priced in both deregulation and tax reform, the professor said.

O'Leary said, however, that a significant part of the rally was driven by the financial services and energy sectors. In order for that to hold, O'Leary said Trump's deregulation promises would have to follow through on the "euphoric optimism." He explained there's a risk in the market because prices have risen faster than earnings have.

While he isn't calling a correction any time soon, O'Leary said that he is gravitating toward companies that are less levered and have more cash flow. He explained that whenever a correction comes, it's the companies with levered balance sheets that he would be worried about.

Even with U.S. equities setting new records, CNBC's Jim Cramer said it isn't too late to get into the market. He explained that if investors look at specific valuation metrics, they'll see that many Dow stocks are cheap, both relative to their sector and historically.

Goldman Sachs (GS) reported stunning earnings last week, but Cramer pointed out the stock is still relatively inexpensive in light of those results. He explained shares of the investment bank have surged since the election because many market watchers had expected Hillary Clinton to win the 2016 presidential election.

— CNBC's Christopher Hayes and Fred Imbert contributed to this report.

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank," which features Kevin O'Leary as a judge.

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