While European countries have become known for notoriously underestimating their problems, the market overestimates their impact on the global economy with excessive worry, said Doug Cote, chief market strategist at ING Investment
The latest headlines have shed light on Spain's money woes, but "Spain is no Greece," said Cote, highlighting the fact that the Spanish government has already taken painful but necessary steps toward severe austerity measures.
Plus, the European Central Bank has also taken aggressive steps to prevent a credit crunch in Europe's banking system, while European Union leaders boosted the region's financial firewall to €700 billion just last month.
"This latest round of funding, while maybe not as ambitious as some would have liked, proves that European leaders are willing to do whatever it takes to stem the tide of contagion," said Cote.
With a fence built around Europe's banking system, policymakers can now shift their focus to making changes that will address Europe's fiscal problems over the long term.
Wall Street just closed out its best first quarter since 1998, and while most experts believe stocks will continue to head higher this year, the recent momentum will subside, and there could be a few dips along the way.
