EconomyxAI · Sector Watch April 2004Released April 21, 2004 |
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Conditions index +0.64 avg of 11 sectors, −2 to +2 |
| Outlook index +0.29 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released April 21, 2004, with information collected before April 12, 2004. | | ■ | Activity increased across the nation from mid-February to early April, with widespread growth in retail, manufacturing, mining, energy, tourism and services. | | ■ | Retail sales moved up noticeably; Dallas, Kansas City, New York and San Francisco described spending as brisk, solid or surprisingly strong. | | ■ | Manufacturing increased in every district, with steel mills at or near capacity in Chicago and Cleveland and high-tech orders up in Dallas and San Francisco. | | ■ | Labor markets tightened somewhat; consumer prices rose modestly while energy, metals, plastics, cement, wallboard and lumber prices jumped, with more firms passing costs on. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▶ Steady | +0.72 |
| Materials
XLB
▲ Improving | +0.71 |
| Financials
XLF
▲ Improving | +0.70 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | −0.01 |
| Utilities
XLU
▶ Steady | +0.01 |
| Communication Services
XLC
▶ Steady | +0.14 |
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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 | Industrials
XLI | | +0.72 | Favorable | +1.14 | +1.00 | ▶ −0.02 | | 2 | Materials
XLB | | +0.71 | Favorable | +0.96 | +0.50 | ▲ +0.51 | | 3 | Financials
XLF | | +0.70 | Favorable | +1.06 | +0.50 | ▲ +0.58 | | 4 | Consumer Discretionary
XLY | | +0.62 | Favorable | +1.21 | +0.53 | ▶ +0.18 | | 5 | Information Technology
XLK | | +0.44 | Leaning Favorable | +0.71 | +0.50 | ▶ +0.04 | | 6 | Energy
XLE | | +0.40 | Leaning Favorable | +0.46 | +0.10 | ▶ +0.28 | | 7 | Real Estate
XLRE | | +0.23 | Leaning Favorable | +0.76 | +0.06 | ▲ +0.19 | | 8 | Health Care
XLV | | +0.15 | Neutral | +0.33 | +0.00 | ▶ +0.04 | | 9 | Communication Services
XLC | | +0.14 | Neutral | +0.40 | +0.00 | ▶ +0.00 | | 10 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Consumer Staples
XLP | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 |
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 | | +1.00 |
Activity increased across the nation with widespread growth in nearly every sector. | Labor markets tightened somewhat; hiring increased moderately in most districts; more firms plan to hire later in the year. | | Inflation Pressure (higher = headwind) | | +0.75 |
Consumer prices up modestly; significant increases in energy and manufacturing and construction inputs; pass-through occurring in five districts. | Lending increased in most districts and credit quality improved. | Retail and tourism contacts optimistic for spring and summer; Chicago and SF firms plan more hiring later in the year. |
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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 | | Health CareXLV | +1 | · | · | · | · | · | · | +1 | · | · | · | +1 | | FinancialsXLF | · | +2 | +1 | +1 | +1 | · | +1 | +1 | · | · | +1 | +1 | | Consumer DiscretionaryXLY | +1 | +2 | +1 | +1 | · | +1 | +1 | +1 | +1 | +2 | +2 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +2 | · | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | · | +1 | +1 | +1 | +1 | · | · | · | · | +1 | | MaterialsXLB | · | · | +1 | +2 | +1 | +1 | +2 | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +2 Chicago Manufacturing expanded solidly; steel "still very hot." Why it matters: High Industrials weight. | Industrials +1 broad−based Broad-based Manufacturing and freight up in all other districts. Why it matters: Broad Industrials strength. | Financials +2 New York Securities industry exceptionally strong first quarter. Why it matters: Largest Financials weight. | Consumer Discretionary +2 New York, Kansas City, Dallas Brisk retail; surprisingly strong sales. Why it matters: Large Discretionary weights. | Consumer Discretionary +1 broad−based Broad-based Retail up in most other districts. Why it matters: Discretionary positive. | Materials +2 Cleveland, Chicago Steel mills at capacity, turning down orders. Why it matters: Materials strength. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Gaining momentum. |
| New York Growing +1.5 Outlook ▲ Gained momentum. |
| Philadelphia Growing +1.0 Outlook ▲ Expanded; improving trend continued. |
| Cleveland Growing +1.0 Outlook ▲ Pace of improvement accelerated. |
| Richmond Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| Atlanta Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| Chicago Growing +1.0 Outlook ▲ Continued to expand. |
| St. Louis Growing +0.5 Outlook ▲ Expanding slowly. |
| Minneapolis Growing +1.0 Outlook ▲ Solid growth. |
| Kansas City Growing +1.5 Outlook ▲ Expanded solidly. |
| Dallas Growing +1.5 Outlook ▲ Continued to accelerate. |
| San Francisco Growing +1.5 Outlook ▲ Acquired additional momentum. |
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Where the signal is thin or split Divergences to watch | Financials — New York's +2 carries the largest Financials weight, so the weighted score exceeds the simple average.
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| | Materials — positive readings in eight districts with two +2s make Materials one of the strongest sectors this release.
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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 |