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Why Stocks Fell On Good Trade News, Ford, Chip Stocks -- ICYMI

Stocks were down Monday. A head scratcher. The explanation is blindingly clear.

Wake up, it's Monday. 

Shouldn't the market rally on the trade news? Well it did. Initially. And then the Dow Jones Industrial Average fell more than 240 points. The S&P 500 fell .59%. The Nasdaq fell 0.45%. 

Potential Explanation

There still isn't an agreement, and the terms of the agreement are still unclear. "It appears there is much to address on the enforcement mechanisms required to ensure promises made are kept," wrote Jason Pride, CIO of private wealth at Glenmede. "Trade optimism has grown considerably as talks progress, but risks remain as issues are unaddressed." 

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Partly to Pride's point, the U.S. wanted China to agree to terms that would allow the U.S. to levy tariffs should some discussions lead to no place savory. This is unfavorable to China, and for now, and impediment to an agreement. 

Retail Investors Buying Ford

Some retail investors have been buying up Ford (F) - Get Ford Motor Company Report stock in the past month, JJ Kinahan, chief market strategist at TD Ameritrade told TheStreet. That's partly because it trades at just above $9 a share, so it's cheap, while potentially relaxed tariffs on auto's going into China from the U.S. would lift Ford, as well as the whole U.S. auto group, which includes General Motors (GM) - Get General Motors Company Report and Tesla (TSLA) - Get Tesla Inc Report .  Still, investors need to watch for potential reduced U.S. tariffs on Chinese steel and aluminum, which haven't been mentioned in any reports. Auto makers have had to lift car prices in order to protect gross margins, which were initially hit by higher metals costs. The higher prices don't exactly spur demand.

Related. Here's how to play electric and self-driving cars.  

Cloud Semiconductor Market Bottomed Out?

Yes, say analysts at Morgan Stanley. "The cloud semi cycle has been in a downturn since 2Q18, but we believe we are around the bottom now," the analysts wrote. Morgan Stanley says capital expenditures for cloud semiconductor makers will climb to an almost 30% year-over-year increase in 2019, and almost 40% in 2020. 2018 was a year of oversupply in the loud semiconductor market, and a bounce from the bottom for the market as a whole could be in the cards for players like Nvidia (NVDA) - Get NVIDIA Corporation Report , Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report , and Intel (INTC) - Get Intel Corporation Report

Also, Salesforce (CRM) - Get salesforce.com, inc. Report  , RealMoney's stock of the day, reported earnings Monday. Here's what matters on the stock