(New York)

Markets have indigestion this week, but is a recession any more of a threat than it was a couple weeks ago? The answer is yes. So far the manufacturing side of the economy has been the weaker one, with the consumer side staying strong. However, all the tariffs that have been imposed on China will now hit the side of the US economy that is strongest—the consumer—by raising prices at the register. Therefore, the trade war will directly weaken the best part of the economy, which could seriously curtail growth.

FINSUM: To protect against this, investors may want think about shifting into defensive shares like consumer staples, healthcare, utilities, and real estate, all of which tend to outperform cyclicals in a down economy/market.