September, 2013 (Chinavestor) Strong global economic data for August was not enough to keep momentum going for U.S. stocks. The Dow Jones Industrial Average (INDEXDJX:.DJI) fell 5.42% for the month, the most since May 2012. The decline is attributed to two major factors. One is a possible U.S. intervention in Syria. Some argue that once U.S. involvement takes place and uncertainty disappears the index will bounce back but we don’t necessarily buy that argument. Another factor behind the current decline is that the FED is on track to start tapering off in September. We have argued that current valuations are excessive, e.g. the Dow is at all time highs despite historically high unemployment and one of the slowest economic recoveries after a recession. The good news is that strong global, primarily Chinese, data provided support for equities globally in August. The Chinese manufacturing index showed expansion along with sound factory orders. The Shanghai Composite Index (SHA:000001) rose 3.4%, the most since January 2013, making up for previous losses earlier the year. But investors in Hong Kong kept a close eye on the U.S., mitigating positive developments from China. All told the Hang Seng Index (INDEXHANGSENG:.HSI) fell 0.5% in August and is down –4.1% year-to-date (YTD). This is far better than the 7.5% decline for the Shanghai Composite or the –7.8% for the China ADR Index. This latter one is compiled by Chinavestor and takes into account all Chinese ADRs listed in the United States.