 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Tuesday's Headlines 1. Markets Flat as Tech Shares Slide 2. China Pledges to Buy More U.S. Crops 3. Apple's New Products 4. Starbucks Falls as SEC Questions Accounting Markets Closed
 image courtesy apple.com
Markets Today
Tech stocks led U.S. markets lower today, as shares of Amazon, Facebook, and Netflix all fell in a broader shift to value stocks. More on Netflix later, which has a new pricing problem. The DJIA managed a slight gain as industrial stocks rallied following reports that China has agreed to amplify its purchases of U.S. crops as a condition of the trade deal.
For U.S. farmers, particularly soy and corn farmers, that is welcome news, given the recent declines in those commodities. Both have been hit with new tariffs from China.
Here's corn futures over the past year. Part of the declines were due to wet weather in the U.S. last spring, but most of the volatility can be attributed directly to the trade war.  Rotation from Momentum to Value Stocks Two days don't make a trend, but there has been a lot of noise so far this week about the rotation from momentum to value stocks. Momentum stocks are companies like Amazon and Facebook that are still growing revenue and profits at an aggressive clip, despite their size and age. They are widely held and widely traded. When they move up or down, they have the capacity to take the broader market with them given how widely held they are. Value stocks are generally low multiple, and often have the opposite price attributes of momentum stocks.
According to Bespoke Investments, Monday saw a collapse for stocks with high price momentum relative to stocks with value characteristics. These two baskets of stocks are most easily tracked using the iShares Momentum (MTUM) and Value (VLUE) factor ETFs.
As shown in the chart below, Monday was a brutal day for Momentum (MTUM) relative to Value (VLUE). Part of this, according to Bespoke, was a function of interest rates—with recent upticks in short- and long-term interest rates driving utilities and other defensive stocks while banks rallied.
But it was broader than that too: software stocks fell while oil and gas stocks surged. Automakers rallied as stable consumer staples names took a hit, and the market generally reversed all of the trends it has been operating on so far this year.  Why it Matters This sudden shift may reflect the fact that yields on the U.S. 10-year Treasury bond are starting to rise after falling all summer. That could be a reaction to better-than-expected economic news combined with hopes for a U.S. China trade deal. Investors are putting money back into the stock market, but not favoring high-growth momentum stocks, by and large.
Here's a three month chart of the yield on the U.S. 10-year.  The risk is that if investors shift to value stocks, which generally don't move as much as momentum stocks because investors buy and hold them for longer, the upward trajectory of the stock market might be muted. Since momentum stocks are more widely held and make up a larger weighting in the market-weighted S&P 500, a shift out of those stocks could keep the market from topping record highs again.
To be sure, this has only just started to happen, and we can't call it a trend. It's just something to keep an eye on if you are an index investor or heavily invested in ETFs like SPY, which track the broader market.  Apple Goes Camera Crazy
Apple debuted three new iPhones, the $699 Model 11 and $999 11 Pro, and the $1,099 11 Pro Max, which all have even better camera functionality than the X and the XR. This was just one of the new or improved products the company introduced at an event at its Cupertino, CA headquarters today.
Read More: 5 Takeaways from Apple's Event Today
But the big announcements, which shook up the media industry, were related to Apple TV+ and its subscription plan, and Apple Arcade, its new gaming center.
The company announced launch dates for both, which will each cost $4.99 per month, which is lower than competitors like Disney's streaming platform, Disney+, and Google's cloud gaming service, Stadia. It's also lower than Netflix, which has been steadily raising its prices. It's standard service is $12.99 per month, while premium is $15.99 per month.
Not surprisingly, traders bid up Apple and sold Netflix today. That could have been tied to the product releases, or just a stronger conviction that Apple has more momentum than Netflix, which is struggling with growing its users around the world (AAPL in Blue, NFLX in Orange). 
chart courtesy www.koyfin.com  Shares of Nektar Therapeutics rose by almost 12% today, despite a class action lawsuit having been brought against the company regarding possible securities fraud. State Street Corporation's stock price increased by nearly 9% after the chief financial officer stated the company's net interest income should remain stable in the third quarter.  Marketaxess Holdings has plunged even further, by almost 8%, seemingly still suffering from the "Hold" rating it received yesterday. Shares of Chipotle fell by over 6% today, following the New York City mayor's administration suing the restaurant chain over multiple labor law violations.  Word of the Day: As in "Apple has pricing power!" Pricing power is an economic term that describes the effect of a change in a firm's product price on the quantity demanded of that product. Pricing power is linked to the price elasticity of demand. Price elasticity is a measure of the degree to which individuals, consumers, or producers change their demand or the amount supplied in response to price changes. For example, if the price of a good goes up, the tendency is that the demand for that good will go down as people will look for cheaper alternatives.  image courtesy Univ. Tennessee
Today in Banking History Sept. 10, 1833: U.S. President Andrew Jackson announces that the government will no longer use the Second Bank of the United States, the country's national bank. He then used his executive power to remove all federal funds from the bank, in the final salvo of what is referred to as the "Bank War."
A national bank had first been created by George Washington and Alexander Hamilton in 1791 to serve as a central repository for federal funds. The Second Bank of the United States was founded in 1816; five years after this first bank's charter had expired. Traditionally, the bank had been run by a board of directors with ties to industry and manufacturing, and therefore was biased toward the urban and industrial northern states. Jackson, the epitome of the frontiersman, resented the bank's lack of funding for expansion into the unsettled Western territories. Jackson also objected to the bank's unusual political and economic power and to the lack of congressional oversight over its business dealings.
source: https://www.history.com/this-day-in-history/andrew-jackson-shuts-down-second-bank-of-the-u-s
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Tuesday, September 10, 2019
The Biggest Takeaway From Apple’s Product Day
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