The manufacturing sector is weakening.

We've seen this part of the economy contract for five consecutive months. Many folks see this as a worrying sign of an imminent bear market.

After all, a weakening economy – even just part of it – must be a bad sign for stocks... right?

Well, not exactly. History tells a different story.

Stocks actually tend to perform well after what we're currently seeing. It points to another double-digit rise in the U.S. market this year.

Let me explain...

Monthly reports give us a glimpse into the health of the U.S. economy. We look at these to see if the economic expansion is broad or if there are pockets of concern.

For the manufacturing sector, we use the Purchasing Managers' Index ("PMI") from the Institute for Supply Management. If it shows a reading above 50, that means manufacturing is expanding. A reading below 50 signals contraction.

Manufacturing has been contracting lately... But there's more. The PMI fell below 48 in December.

That's the first reading below 48 in more than a decade. Check it out...

Since 1960, this index has only been below 48 about 17% of the time. You might think those would be bad times for investors. A struggling economy couldn't be good for stocks, right?

That logic seems solid. But it's dead wrong. Surprisingly, this is actually a positive sign.

Going back nearly 60 years, similar cases have led to strong outperformance in the S&P 500. Take a look...

Over the long term, U.S. stocks return about 7% a year. But waiting to buy when the manufacturing sector is below 48 can lead to even better results.

Similar instances have led to 7% returns in six months, 13% returns in one year, and 22% returns over the next two years.

Yes, the manufacturing sector is contracting. But history says that isn't enough to kill today's bull market. Even more, it could lead to outperformance in the coming years.

Stocks finished 2019 with record gains. But that doesn't mean the bull market is over. And as I said before, this economic signal is actually a positive one.

So if you're still on the sidelines, I encourage you to step up and buy U.S. stocks today.

Good investing,

Chris Igou

P.S. Don't forget to check out tonight's live event at 8 p.m. Eastern time... especially if you're worried about how to position your investments in 2020.

You'll hear from my boss Steve Sjuggerud – along with Porter Stansberry and Dr. David "Doc" Eifrig – about what's next for the Melt Up, gold, cryptos, and more. Plus, they'll each name their No. 1 favorite stock of the year.

Tonight is going to be big – trust me. And it's free to tune in... Register here to join us.

We could see another big year in U.S. stocks. And this drugmaker will likely be a big winner, thanks to a recent shift in its business...

Market Notes

'BEHIND THE SCENES' OF THE E-COMMERCE TREND

Today, we're highlighting an easy way to invest in e-commerce...

Regular readers know we love investing in "picks and shovels" businesses. These companies provide the tools and services that support a broader trend. And that means they can profit no matter who comes out on top in the industry. Today's company is no different...

Shopify (SHOP) is an e-commerce platform for businesses that want to establish an online presence. It provides back-office services like inventory and order management, as well as shipping and fulfillment. It now boasts more than 1 million merchants on its platform. And with so many online shops relying on its services, Shopify is raking in sales... In the most recent quarter, Shopify reported revenue of more than $390 million, up 45% from the same quarter last year.

As you can see in today's chart, SHOP shares have soared over the past year. The stock has nearly tripled over that time frame, recently hitting a fresh all-time high. As long as the e-commerce trend is still going strong, this company will keep supporting it behind the scenes...