September (Chinavestor) Hopes that August and early September will continue where July left off were shattered, as investors failed to find evidence that the global economic recovery would gain traction. At best, things just didn’t get worse...
High unemployment and an increasing number of foreclosures reminded investors that the recovery will be slow and gradual. While manufacturing data and the increasing number of payrolls showed signs of improvement, the overall economic picture in the largest economy of the world remains fuzzy. The Dow Jones Industrial Average (INDEXDJX:.DJI) lost 4.3 percent in August but bounced back in early September to pare losses for the year.
Chinese economic indicators are mixed as well; while industrial production picked up and the August trade balance was the third largest on record, policy makers expressed frustration with high property prices lashing out on the banking and real estate sectors. Investors stepped to the side fearing that a tightening in the financial system will hurt the fragile recovery. The Shanghai Composite Index (SHA:000001) went sideways since the end of July and continues to underperform all major international benchmarks with a negative 19.1 percent performance year-to-date.
Key stocks mentioned in this report include Sina Corp. (NASDAQ:SINA) and Sohu.com (NASDAQ:SOHU) from the interent space and Duoyuan Printing (NYSE:DYP) and Duoyuan Global Water (DGW).