U.S. investors are exiting European stocks amid the continent's economic stagnation and the turmoil in Ukraine.
U.S.-based European stock funds saw a net outflow of $121 million in July, the first negative number in 15 months, according to Morningstar, The Wall Street Journal reports.
The eurozone economy posted zero growth in the second quarter, fueling concern that major countries there will fall back into recession.
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And the Russia-Ukraine conflict has intensified fears about European economies that have ties with Russia, especially Germany.
U.S. investors aren't the only ones turning their backs on European stocks. The MSCI Europe stock Index dropped 5.1 percent from its June peak through Friday.
Richard Bernstein, CEO of money manager Richard Bernstein Advisors, dumped European stocks between March and June.
"The economy in Europe continues to slow, deflationary forces continue to build and the ECB [European Central Bank] doesn't seem to care," he told The Journal. "They're doing so little."
To be sure, the Stoxx Europe 600 Index jumped 1.2 percent Monday to its highest close of the month, as officials from Ukraine and Russia discussed a possible truce.
"Every time you have a de-escalation of geopolitical risk, it works favorably to the market," Steen Jakobsen, chief investment officer at Saxo Bank in Copenhagen, told Bloomberg.
"The short-term direction of the stock market at the moment is driven almost entirely by whatever news is coming out of the Ukraine-Russia situation. I see this as a temporary relief."
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