'Trade Sensitive Sectors Should Rally' if U.S.-China Make Deal

The market run-up is not all speculative on the trade agreement. There's a method to the market's madness.
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March 1 marks the day we all hear from the U.S. and China on the real progress of trade talks.

An agreement is not entirely priced in, one expert said. 

Sectors directly affected (negatively) by tariffs, both from China and the U.S., have run up in 2019. The iShares PHLX Semiconductor ETF is up 18% year-to-date. General Motors Co. (GM) - Get Report is up almost 20% this year. Ford Motor Co. (F) - Get Report is up 13.86% this year. 

Still, "economically sensitive sectors should rally should we get such positive news on the trade front," said Mike Loewengart, vice president of investment strategy at E*Trade. "It really becomes a question of the exposure that investors are looking for." 

Here's the catch:

"We see the markets digesting information as it becomes available, and... I don't think a holistic agreement has been priced into the market," Loewengart said. 

"I think optimism has been priced in in recent weeks," he said.