Chinese stocks have opened with........>

CHINA STOCKS: Chinese stocks have opened with modest losses following the lead

of US markets which plunged overnight. The CSI 300 is down 0.95% and the Hang

Seng is down 0.5%, with no support in sight for either index. 

- The divergence in equity performance between the US and China since the start

of the year strongly suggests that the US is 'winning' the trade war so far. The

CSI 300 is down by almost 15% relative to the S&P500, with the yuan looking

increasingly likely to turn negative YTD given the strong bearish trend in the

currency. 

- Given the major valuation difference between the two markets, however, and the

recent technical deterioration in the Dow Jones, which closed below its 200DMA

yesterday, some recoupling between US and Chinese stocks is in order.