Markets were decisively in “risk-off” mode last week. Following weak manufacturing news last Thursday, the yield on the 10-year Treasury sunk to its lowest level since October 2017. The spread between the 10-year yield and three-month yield, in fact, inverted once again, with the shorter-term bond yield higher by 6 basis points. As such, the “boring” yet mostly reliable utilities sector rotated to the top.

I’m not going to use the R-word here. All I’m going to say is that it might be time for investors to brace for a significant correction—especially with debt at record levels and the Federal Reserve left with very little firepower to combat a full-blown crisis.

Let’s take a look at what the smart money is doing.

Many successful, ultra high-net-wealth individuals (UHNWIs) favor municipal bonds, not only because they’re tax-free at the federal and often state and local levels, but also because they’ve managed to perform well even during equity bear markets. According to the first-quarter asset allocation report for Tiger 21, a peer-to-peer network for UHNWIs, members had an average weighting of 9 percent in fixed income, which includes muni bonds.

The U.S. economy looks rock-solid with a strong jobs market, but there are some worrisome signs lurking under the surface.

Could U.S. Manufacturers Contract in 2019?

Case in point: May’s “flash” index of U.S. manufacturers registered a sharp decline to 50.6, down from 52.6 in April. This is only a preliminary reading, but if it turns out to be accurate—we’ll know early next month—it would mark the slowest growth in the domestic manufacturing industry since September 2009, according to IHS Markit. Then again, it could fall below 50.0, which would indicate contraction