EconomyxAI · Sector Watch April 2005Released April 20, 2005 |
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Conditions index +0.51 avg of 11 sectors, −2 to +2 |
| Outlook index +0.21 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released April 20, 2005, with information collected before early April 2005 (date not printed in the PDF). | | ■ | Business activity continued to expand in all twelve districts; Atlanta's pace was robust, Kansas City and San Francisco solid, Chicago and Dallas moderate, and New York and Cleveland uneven. | | ■ | More than half the districts reported rising retail sales, led by Minneapolis (up 5 to 12 percent), while Chicago, Dallas and Cleveland were subdued or disappointing. | | ■ | Eleven districts reported rising manufacturing production or orders, though New York cited a 'loss of momentum'; the U.S. rig count reached its highest level since 1986. | | ■ | Price pressures intensified, driven by energy, petrochemicals and building materials; two-thirds of districts worried high energy prices were damping consumer demand. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Industrials
XLI
▶ Steady | +0.53 |
| Materials
XLB
▶ Steady | +0.37 |
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| Weakest prospects Utilities
XLU
▶ Steady | −0.04 |
| Consumer Staples
XLP
▶ Steady | −0.01 |
| Communication Services
XLC
▶ Steady | +0.04 |
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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 | | +0.91 | Favorable | +1.26 | +1.00 | ▶ +0.33 | | 2 | Industrials
XLI | | +0.53 | Favorable | +1.00 | +0.54 | ▶ +0.06 | | 3 | Materials
XLB | | +0.37 | Leaning Favorable | +0.70 | +0.14 | ▶ +0.06 | | 4 | Real Estate
XLRE | | +0.27 | Leaning Favorable | +0.79 | −0.03 | ▶ +0.14 | | 5 | Consumer Discretionary
XLY | | +0.27 | Leaning Favorable | +0.52 | +0.44 | ▶ −0.23 | | 6 | Financials
XLF | | +0.17 | Leaning Favorable | +0.49 | +0.22 | ▶ −0.30 | | 7 | Health Care
XLV | | +0.13 | Neutral | +0.28 | +0.00 | ▶ +0.03 | | 8 | Information Technology
XLK | | +0.12 | Neutral | +0.47 | +0.00 | ▶ −0.15 | | 9 | Communication Services
XLC | | +0.04 | Neutral | +0.06 | +0.00 | ▶ +0.03 | | 10 | Consumer Staples
XLP | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Utilities
XLU | | −0.04 | 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 | | +0.75 |
Expansion continued in all twelve districts; robust to moderate in most, uneven in New York and Cleveland. | Modest to moderate wage increases as some labor markets tightened; temp hiring brisk in Atlanta. | | Inflation Pressure (higher = headwind) | | +0.75 |
Upward price pressures strengthened, mainly energy, lower dollar and building materials; partial pass-through common. | Loan demand increased across categories with almost all districts reporting higher commercial lending; credit conditions improved. | Energy prices a concern across sectors; Dallas says energy uncertainty adds caution to the outlook; capex moderately positive. |
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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 | | Health CareXLV | · | · | +1 | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | · | +1 | · | +1 | +1 | +1 | +1 | · | +1 | · | +1 | | Consumer DiscretionaryXLY | +1 | +1 | · | −1 | · | +1 | · | +1 | +1 | +2 | −1 | +1 | | Communication ServicesXLC | +1 | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +2 | · | · | +1 | +1 | · | +1 | +1 | · | · | +1 | | MaterialsXLB | · | · | +1 | · | · | +1 | · | · | +1 | · | +2 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy +2 Dallas U.S. rig count highest since 1986. Why it matters: Largest Energy weight. | Real Estate +2 New York Housing extraordinarily robust; offices tightening. Why it matters: Large Real Estate weight. | Industrials +2 Kansas City Manufacturing expanded strongly. Why it matters: Industrials strength. | Industrials +1 broad−based Broad-based Manufacturing up in ten other districts. Why it matters: Broad Industrials strength. | Materials +2 Dallas Petrochemical demand very strong. Why it matters: Materials strength. | Consumer Discretionary +2 Kansas City Sizable retail sales gains; tourism up. Why it matters: Discretionary strength. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Activity continues to expand. |
| New York Growing +1.0 Outlook ▲ Continued to grow, with variation across sectors. |
| Philadelphia Growing +1.0 Outlook ▲ Increased. |
| Cleveland Growing +0.5 Outlook ▲ Continued to show signs of improvement. |
| Richmond Growing +0.5 Outlook ▲ Restrained in March, gaining momentum in April. |
| Atlanta Growing +1.5 Outlook ▲ Robust. |
| Chicago Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| St. Louis Growing +1.0 Outlook ▲ Continued to expand. |
| Minneapolis Growing +1.5 Outlook ▲ Firm growth. |
| Kansas City Growing +1.5 Outlook ▲ Expanded solidly. |
| Dallas Growing +1.0 Outlook ▲ Expanded moderately. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a solid pace. |
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Where the signal is thin or split Divergences to watch | Real Estate — New York's +2 carries a large weight and pushes the weighted score well above the simple average.
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| | Consumer Discretionary — two negatives offset by Kansas City's +2 and broad +1s leave Discretionary modestly positive.
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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 |