The Big Number 
The relative performance of the market-neutral Dow Jones Momentum (DJTMNMO) and Value (DJTMNSV) indices since the start of September.

While there’s been relatively little movement in the broad U.S. stock indices, a rotation appears to be going on just below the surface. Since the start of September, momentum stocks, which had been doing well, have been performing poorly, and value stocks have been producing strong returns.  Whether this is just a position squeeze or the start of a rotation should be top of mind for equity investors.

Market Notes
U.S.-China trade talks continued to drive markets around the world.  On Tuesday, China announced it would exempt some U.S. products from tariffs, and the U.S. responded by delaying the increase in some of its tariffs due to take effect next month.

The Markets’ Reaction
The S&P 500 (SPX) was up 1%, approaching all-time highs.  International developed returned 2% (MEXA), and emerging markets were up 1.9% (MEEM). Cyclical and small cap outperformed.  The Russell 2000 climbed 4.9% on the week. Bond yields rose sharply.

What to Watch
It’s a huge week in central banking.  The U.S. Federal Reserve meets on Wednesday and is expected to announce a quarter point rate cut.  Nine other banks are meeting around the world providing some insight into local economies and the impact of the ongoing trade war.

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