Investors seek US debt on EU summit pessimism: EPFR

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Investors seek US debt on EU summit pessimism: EPFR

Reuters | June 29, 2012 | 03:51 PM EDT

NEW YORK (Reuters) - In advance of the latest round of European talks to help stabilize the euro zone financial situation, investors once again played it safe, data from EPFR Global showed on Friday.

The fund-tracking firm reported that U.S. bond funds took in $3.26 billion in the week ended June 27. More significantly, U.S. stock funds saw redemptions of $7.64 billion, with about 80 percent of that being pulled from three exchange-traded funds.

Bond funds globally saw inflows of $4.74 billion over the week, while equity funds saw outflows of $7.69 billion.

Money market funds globally attracted $1.09 billion in inflows, marking a reversal from the prior week when $33.43 billion was pulled from those funds.

Brian LaRose, technical analyst with United-ICAP, said the move by investors out of stocks and into bonds last week "speaks volumes about how much progress the public thinks the euro zone officials are able to make."

That said, stocks in the U.S. rallied strongly on Friday, after euro zone leaders agreed to cut borrowing costs in Spain and Italy and allow rescue funds to be used to stabilize the region's banks. In early afternoon trading, the S&P 500 was up 2.13 percent.

LaRose, however, said he wasn't impressed by the Friday rally because he thinks the European debt crisis cannot be easily solved.

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Source: http://www.cnbc.com/id/48018438?__source=RSS*tag*&par=RSS

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