EURL ETF

The automotive industry is a large component of Europe's economy. The transition to electric vehicles (EVs) will have a profound influence.

Last week, there was a positive atmosphere on Wall Street. Notably, the Dow recorded its eighth consecutive day of gains on Friday.

The S&P 500 is starting Q2 on a downward trend, leading investors to turn their attention to European equities for potential growth opportunities. This is particularly true as rate cuts in Europe are seen as offering more certainty compared to the United States.

The S&P 500's drive toward a record high could have Europe equities following right behind it. As such, traders may want to consider European equities as a latent move if the S&P keeps pushing to higher highs.

Whether they like it or not, U.S. and European equities are inextricably linked these days as investors eye the moves of both central banks. Forthcoming rate cuts by the European Central Bank (ECB) could have a positive effect on both markets as investors ponder the number of cuts and the pace at which they arrive.

Traders may use European equities as an alternate play when U.S. economic data is released. When considering leverage, they can use the Direxion Daily FTSE Europe Bull 3X ETF (EURL).

Yield curve inversions can be reliable indicators of economic downturns. This means that traders in European equities may want to pay close attention to the German bond market.