EconomyxAI · Sector Watch April 2001Released May 2, 2001 |
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Conditions index −0.23 avg of 11 sectors, −2 to +2 |
| Outlook index +0.07 sectors with an outlook |
| Districts growing 3/12 per National Summary |
| Positive momentum 4/11 sectors improving |
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This release in brief The read | ■ | Almost all districts reported a slow pace of activity in March and early April. | | ■ | Retail sales were weak in March but strengthened in April; retailers expect small gains at best, and high gasoline prices cut demand for SUVs and luxury cars. | | ■ | Industrial activity kept weakening, with a pronounced slowdown in high-tech and telecom; San Francisco reported semiconductor prices down more than 20% this year. | | ■ | Home sales and construction were steady or picking up on lower mortgage rates, while commercial real estate softened where dot-com space came back on the market. | | ■ | Energy activity kept strengthening, with Kansas City's rig count at a ten-year high, while petrochemicals faced their worst market in 15 years. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Financials
XLF
▲ Turning up | +0.34 |
| Utilities
XLU
▶ Steady | +0.25 |
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| Weakest prospects Information Technology
XLK
▼ Turning down | −0.97 |
| Materials
XLB
▼ Turning down | −0.64 |
| Industrials
XLI
▶ Steady | −0.33 |
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All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
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| 1 | Energy
XLE | | +0.64 | Favorable | +0.71 | +0.85 | ▶ +0.05 | | 2 | Financials
XLF | | +0.34 | Leaning Favorable | +0.18 | +0.50 | ▲ +0.66 | | 3 | Utilities
XLU | | +0.25 | Leaning Favorable | +0.05 | +0.50 | ▶ +0.05 | | 4 | Health Care
XLV | | −0.01 | Neutral | +0.08 | n/a | ▶ −0.10 | | 5 | Communication Services
XLC | | −0.01 | Neutral | −0.04 | n/a | ▶ +0.03 | | 6 | Consumer Staples
XLP | | −0.12 | Neutral | +0.00 | n/a | ▼ −0.14 | | 7 | Consumer Discretionary
XLY | | −0.13 | Neutral | −0.36 | +0.05 | ▼ −0.23 | | 8 | Real Estate
XLRE | | −0.17 | Leaning Unfavorable | −0.12 | −0.21 | ▼ −0.32 | | 9 | Industrials
XLI | | −0.33 | Leaning Unfavorable | −0.83 | −0.19 | ▶ +0.00 | | 10 | Materials
XLB | | −0.64 | Unfavorable | −0.95 | n/a | ▼ −0.17 | | 11 | Information Technology
XLK | | −0.97 | Unfavorable | −1.23 | −1.00 | ▼ −0.78 |
Prospect Score blends current conditions, district outlooks, momentum, a sector-specific macro tilt and margins. Now = weighted current conditions; Outlook = n/a when too few districts gave one; Mom. = change vs the average of the two prior releases. |
National Summary, scored −2 to +2 Macro backdrop | Overall Economic Activity | | +0.00 |
Almost all districts reported a slow pace; manufacturing weakened further while housing held steady or improved and retail picked up in April. | Labor market tightness eased in almost every district, especially manufacturing; Chicago's unemployment rate rose above the national average. | | Inflation Pressure (higher = headwind) | | +0.50 |
Energy costs up sharply and at historic highs in some areas, increasingly passed on as surcharges; non-energy input costs stable and retail prices steady. | Lower mortgage rates spurred a refinancing surge that bolstered loan growth, offset by tighter standards on business loans in half the districts. | Retailers expect small gains at best; Cleveland and Philadelphia manufacturers optimistic about summer while Boston, Chicago, St. Louis and Dallas are uncertain to pessimistic. |
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Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
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| Information TechnologyXLK | · | · | · | · | −1 | −1 | −1 | −1 | −1 | · | −1 | −2 | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | +1 | +1 | +1 | · | · | · | · | · | +1 | −1 | −1 | | Consumer DiscretionaryXLY | −1 | · | · | · | +1 | · | · | · | · | · | −1 | −1 | | Communication ServicesXLC | · | · | −1 | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | · | · | −1 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +2 | +1 | · | | UtilitiesXLU | · | · | +1 | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | · | · | +1 | · | −1 | · | +1 | · | · | −1 | · | | MaterialsXLB | · | · | −1 | −2 | −1 | −1 | · | −1 | −1 | · | −2 | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology −2 San Francisco Semiconductor prices have fallen more than 20 percent since the beginning of the year. Why it matters: San Francisco is 47% of IT; a -2 drives weighted IT to the bottom. | Industrials −1 broad−based Ten districts Manufacturing activity continues to weaken across districts. Why it matters: Ten negatives and no positives keep Industrials deeply negative. | Materials −2 Dallas Petrochemical producers facing the worst market conditions in 15 years. Why it matters: Dallas is the largest Materials weight at 14%. | Materials −2 Cleveland Flat-rolled steel shipments hit their lowest level since 1992. Why it matters: Second -2 keeps Materials near the bottom. | Energy +2 Kansas City Rig count rose to the highest level in ten years. Why it matters: Keeps Energy first. | Financials +1 New York Nearly 70 percent of banks note increased demand for residential mortgages. Why it matters: New York carries 28% of Financials, turning the sector positive. |
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Twelve Fed districts District roundup Boston Flat Outlook ▼ Economic activity is slowing. |
| New York Growing +1.0 Somewhat favorable, moderate growth. |
| Philadelphia Flat Outlook ▲ Business conditions were mixed. |
| Cleveland Contracting −1.0 Outlook ▲ Continued to be weak. |
| Richmond Growing +1.0 Expanded at a modest pace. |
| Atlanta Flat Outlook ▶ Pace remained subdued. |
| Chicago Flat Outlook ▶ Remained slow. |
| St. Louis Flat Outlook ▲ Continued to slow. |
| Minneapolis Contracting −1.0 Outlook ▼ Long winter took a toll. |
| Kansas City Flat Outlook ▶ Remained sluggish in March. |
| Dallas Flat Outlook ▼ Decelerated in March, early April. |
| San Francisco Growing +1.0 Continued expansion, more slowing. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco -2 with 47% weight makes weighted IT far weaker than its unweighted average.
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| | Financials — turns positive in four districts as refinancing lifts loan volumes, but New York's +1 is offset by San Francisco and Dallas.
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| | Industrials — ten districts -1 with none positive.
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| | Utilities — a rare provider-side read (Philadelphia capital projects); thin coverage.
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How to read this. Each Fed district’s report is scored −2 (strong contraction) to +2 (strong expansion) for each GICS sector, then weighted by the district’s share of that sector’s activity. The Prospect Score blends current conditions (25%), district outlooks (35%), momentum (20%), a sector-specific macro tilt (10%) and margin pressure (10%). The Beige Book describes regional activity, not earnings or valuations. Weights and sensitivities are illustrative. This newsletter is for information only and is not investment advice. Source: Federal Reserve Beige Book · Scored by EconomyxAI |