Europe needs much more than monetary support to get back on its feet [Video]

Last week was marked by an improved sentiment in the US, but not so much in Europe. The US equities had a strong week: the S&P 500 rallied 1.68% over the week, Nasdaq 100 gained 1.87% - and that despite Nvidia that finally closed the week flat as the earnings disappointment kicked in with a small delay and costed the company a more than 3% retreat on Friday. The Dow Jones rallied nearly 2%, while the small caps rallied jumped nearly 4.5% on further rush to Trump trades. SPDR’s energy and financial ETFs hit a record high, the US Dollar Index rallied to the highest levels in two years and of course, Bitcoin – the ultimate Trump trade - flirted with the $100’000 psychological mark and consolidated gains slightly below that level during the weekend.

In Europe, things looked much less encouraging. First of all, the Stoxx 600 index tipped a toe below the 500 mark at the start of the week, and even though Friday ended on a positive note, the move was driven by a ‘bad news is good news’ type of motivation.

Today, the European companies trade with a 40% discount on their S&P500 peers in terms of PE valuations. But the ECB alone could hardly give the European businesses a strong basis to thrive in the long term. Europe needs much more than monetary support to get back on its feet.