The costs are starting to be felt. In fact, the latest tariffs should cost the average American household $831 this year, according to the Federal Reserve Bank of New York.

You can see that prediction reflected in the already existing trend here:

Consumers are feeling the pain and so are businesses. Either a company bears the brunt of the tariff through a lower profit margin, or the consumer gets stuck with higher prices. Or both.

Meanwhile the stress over trade is also drawing attention to other signs of economic weakness.

I’ve mentioned to you already that US industrial production—which measures everything produced in American factories—has slid lower for five straight months and sits at its weakest point in two years.

What happens when that turns negative?

Well, I’ve got some numbers for you now…

When industrial production (PMI) drops below 50 on the 0 to 100 scale, investors should prepare for negative or very low S&P 500 returns. That’s because the last five times it’s happened, market performance went backward three of those times, with a low point of -37.01% for the following 12 months.

Another important indicator that a recession is coming.

Discuss it now on my special blog.

Until next time,

By Robert Ross

© 2019 Copyright Robert Ross. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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