The US-China trade war continues apace with no clear outcome.
In my view, when it comes to respective stock markets, Chinese investors are feeling the heat far more than their American counterparts.
As of July 18, there’s a wide divergence between the S&P 500 Index (SPX) versus China’s benchmark Shanghai Composite Index (SHCOMP).
The gap has widened more than 20 percentage points to the disadvantage of Chinese investors.
The US has slapped tariffs on $34 billion of Chinese imports and Beijing has responded in kind.
If the tariff brinkmanship doesn’t escalate from current tariff levels, the economic damage may not be severe in my opinion.
In my opinion it’s hard to see an easy or quick resolution to the US-China trade fight.
The economic rivalry between the world’s two biggest economies seems sure to escalate in my view.
Soon or later, I believe that’s going to get fully priced into the US stock market.
Yet for the moment, Chinese investors are feeling the sting.