EconomyxAI · Beige Book Sector Monitor April 2009Released April 15, 2009 |
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Conditions index −0.62 avg of 11 sectors, −2 to +2 |
| Outlook index −0.49 sectors with an outlook |
| Districts growing 0/12 per National Summary |
| Positive momentum 9/11 sectors improving |
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This release in brief The read | ■ | Released April 15, 2009, with information collected before April 6, 2009. | | ■ | Overall economic activity contracted further or remained weak, but five of twelve districts noted a moderation in the pace of decline and several saw some sectors stabilizing at a low level. | | ■ | Retail spending stayed sluggish with slight improvement in Boston, Cleveland and Chicago; homebuyer tax credits and low mortgage rates brought more buyers and a scattered pickup in home sales. | | ■ | Manufacturing weakened in most districts, though New York and Dallas saw demand beginning to bottom out and high-tech orders firmed at very weak levels; nonresidential real estate kept deteriorating. | | ■ | Energy saw steep drilling cutbacks with U.S. rigs down by 300; credit stayed very tight with rising delinquencies, while price pressures eased and wages were frozen widely. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Staples
XLP
▶ Steady | −0.03 |
| Information Technology
XLK
▲ Turning up | −0.12 |
| Health Care
XLV
▶ Steady | −0.12 |
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| Weakest prospects | Real Estate
XLRE
▲ Improving | −0.59 |
| Consumer Discretionary
XLY
▲ Improving | −0.55 |
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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 | Consumer Staples
XLP | | −0.03 | Neutral | +0.52 | −0.50 | ▶ +0.12 | | 2 | Information Technology
XLK | | −0.12 | Neutral | −0.37 | −0.50 | ▲ +1.09 | | 3 | Health Care
XLV | | −0.12 | Neutral | +0.22 | −0.50 | ▶ +0.14 | | 4 | Communication Services
XLC | | −0.22 | Leaning Unfavorable | +0.00 | −0.50 | ▶ +0.15 | | 5 | Utilities
XLU | | −0.23 | Leaning Unfavorable | +0.00 | −0.50 | ▶ +0.00 | | 6 | Financials
XLF | | −0.31 | Leaning Unfavorable | −0.61 | −0.50 | ▲ +0.73 | | 7 | Materials
XLB | | −0.43 | Leaning Unfavorable | −0.80 | −0.50 | ▲ +0.45 | | 8 | Industrials
XLI | | −0.49 | Leaning Unfavorable | −1.48 | −0.16 | ▲ +0.36 | | 9 | Consumer Discretionary
XLY | | −0.55 | Unfavorable | −1.21 | −0.43 | ▲ +0.59 | | 10 | Real Estate
XLRE | | −0.59 | Unfavorable | −1.49 | −0.48 | ▲ +0.41 | | 11 | Energy
XLE | | −0.85 | Unfavorable | −1.58 | −0.79 | ▶ −0.07 |
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 | | −1.25 |
Activity contracted further or weak; five districts saw moderation in pace of decline. | Layoffs, reduced hours, furloughs and hiring freezes widespread; employment outlook bleak. | | Inflation Pressure (higher = headwind) | | +1.00 |
Downward price pressures; discounting; service providers reducing fees. | Credit very tight; delinquencies rising; refinancing brisk. | Manufacturers' outlook improved marginally; housing outlook more optimistic; fewer Kansas City contacts expect declines. |
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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 | −1 | −1 | −1 | · | · | | Health CareXLV | +1 | · | · | +1 | · | · | +1 | −1 | +1 | · | · | · | | FinancialsXLF | −1 | · | −1 | −1 | · | −1 | −1 | · | −1 | · | −1 | −1 | | Consumer DiscretionaryXLY | · | −2 | −1 | · | −1 | −1 | · | −1 | −2 | −1 | −1 | −2 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | −1 | −1 | −2 | −1 | −2 | −2 | −1 | −2 | −2 | −1 | −1 | −2 | | Consumer StaplesXLP | · | · | +1 | · | · | · | +1 | +1 | · | · | +1 | +1 | | EnergyXLE | −1 | −1 | −1 | · | −1 | −1 | −1 | −1 | −2 | −2 | −2 | −1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −2 | −2 | −1 | −1 | · | −2 | −1 | −1 | −1 | · | −1 | −2 | | MaterialsXLB | −1 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | · | −1 | · | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy −2 Dallas U.S. rigs down 300, more than half in Texas. Why it matters: Large Energy weight. | Industrials −2 San Francisco Aerospace order cancellations and delivery deferrals. Why it matters: Large Industrials weight. | Real Estate −2 New York, San Francisco Commercial real estate continued to deteriorate. Why it matters: Large Real Estate weights. | Consumer Discretionary −2 San Francisco, New York Tourist spending down double digits. Why it matters: Discretionary negative. | Industrials −2 Philadelphia, Richmond, Atlanta, St. Louis, Minneapolis Production decreases. Why it matters: Broad Industrials weakness. | Energy −2 Kansas City, Minneapolis Drilling fell sharply; extraction layoffs. Why it matters: Energy negative. |
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Twelve Fed districts District roundup Boston Contracting −1.0 Outlook ▼ Continues to slow; non-auto retail better than expected. |
| New York Contracting −1.0 Outlook ▶ Contracting at a more subdued pace; more optimism. |
| Philadelphia Contracting −1.0 Outlook ▼ Continued at a slow rate. |
| Cleveland Contracting −1.0 Outlook ▼ Remained weak; new order declines leveling off. |
| Richmond Contracting −1.5 Outlook ▼ Softened further; scattered positive reports. |
| Atlanta Contracting −1.0 Outlook ▶ Remained weak; manufacturing outlook less pessimistic. |
| Chicago Contracting −1.0 Outlook ▼ Contracted further at a slower pace. |
| St. Louis Contracting −1.5 Outlook ▼ Weakened further. |
| Minneapolis Contracting −1.5 Outlook ▼ Contracted further; agriculture improved. |
| Kansas City Contracting −1.0 Outlook ▶ Declined with tentative signs of stabilization. |
| Dallas Contracting −1.0 Outlook ▼ Weak; signs of stabilizing at low levels. |
| San Francisco Contracting −1.0 Outlook ▼ Continued to slow; IT products firmed slightly. |
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Where the signal is thin or split Divergences to watch | First Signs Of Stabilization — five districts saw moderation in the pace of decline.
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| | Energy — steep drilling cutbacks keep Energy near the bottom despite rising oil prices.
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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 |