EconomyxAI · Sector Watch April 2020Released April 15, 2020 |
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Conditions index −0.61 avg of 11 sectors, −2 to +2 |
| Outlook index −0.59 sectors with an outlook |
| Districts growing 0/12 per National Summary |
| Positive momentum 2/11 sectors improving |
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This release in brief The read | ■ | Released April 15, 2020, with information collected on or before April 6, 2020. | | ■ | Economic activity contracted sharply and abruptly across all regions as a result of the COVID-19 pandemic. | | ■ | Leisure and hospitality and non-essential retail were hardest hit; manufacturing declined in most districts while food and medical producers saw strong demand; energy cut investment and output on low prices. | | ■ | Employment declined in all districts, steeply in many; loan demand high from credit-line draws and refinancing; outlooks highly uncertain with most expecting further deterioration. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Staples
XLP
▲ Turning up | +0.60 |
| Health Care
XLV
▶ Steady | +0.05 |
| Utilities
XLU
▶ Steady | +0.00 |
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| Weakest prospects Consumer Discretionary
XLY
▼ Weakening | −1.80 |
| Energy
XLE
▼ Weakening | −1.20 |
| Real Estate
XLRE
▼ Turning down | −1.12 |
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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 | | +0.60 | Favorable | +0.81 | +0.50 | ▲ +0.81 | | 2 | Health Care
XLV | | +0.05 | Neutral | +0.17 | +0.00 | ▶ +0.07 | | 3 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 4 | Information Technology
XLK | | −0.30 | Leaning Unfavorable | −0.42 | +0.04 | ▼ −0.57 | | 5 | Communication Services
XLC | | −0.45 | Leaning Unfavorable | −0.40 | −0.50 | ▼ −0.40 | | 6 | Financials
XLF | | −0.71 | Unfavorable | −0.64 | −0.50 | ▼ −0.99 | | 7 | Materials
XLB | | −0.89 | Unfavorable | −0.81 | −1.00 | ▼ −0.77 | | 8 | Industrials
XLI | | −1.05 | Unfavorable | −1.19 | −1.00 | ▼ −1.29 | | 9 | Real Estate
XLRE | | −1.12 | Unfavorable | −0.98 | −1.00 | ▼ −1.77 | | 10 | Energy
XLE | | −1.20 | Unfavorable | −1.26 | −1.50 | ▼ −0.72 | | 11 | Consumer Discretionary
XLY | | −1.80 | Unfavorable | −2.00 | −1.50 | ▼ −2.88 |
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 | | −2.00 |
Sharp and abrupt contraction in every district. | Employment fell in all districts, steeply in many; more cuts expected. | | Inflation Pressure (higher = headwind) | | −1.00 |
Selling and input prices slowing or falling on weaker demand. | Loan demand high from credit-line draws and refinancing, but credit quality worries rising. | Highly uncertain outlooks; most expect conditions to worsen. |
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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 | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | +1 | · | | FinancialsXLF | · | −1 | −1 | +2 | · | · | −2 | +1 | · | −1 | −1 | −1 | | Consumer DiscretionaryXLY | −2 | −2 | −2 | −2 | −2 | −2 | −2 | −2 | −2 | −2 | −2 | −2 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | −1 | | IndustrialsXLI | · | −1 | −2 | −1 | −1 | −1 | −1 | −1 | −1 | −2 | −2 | −1 | | Consumer StaplesXLP | +1 | · | · | +1 | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | | EnergyXLE | · | · | · | · | −1 | −1 | −1 | · | −1 | −2 | −2 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | −2 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | −2 | · | | MaterialsXLB | · | · | −1 | −1 | · | · | −2 | · | −1 | −1 | −1 | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Consumer Discretionary −2 All twelve districts Retail, hospitality and tourism collapsed under closures. Why it matters: Broadest and deepest sector decline. | Energy −2 Dallas Firms unable to access capital; bankruptcy fears. Why it matters: Dallas carries the largest Energy weight. | Industrials −2 Philadelphia, Kansas City, Dallas Factory activity deteriorated sharply. Why it matters: Deepest Industrials reads. | Real Estate −2 New York, Dallas Home sales and CRE leasing ground to a halt. Why it matters: Large RE weights. | Financials −2 Chicago Financial conditions deteriorated substantially. Why it matters: Financials drag. | Financials +2 Cleveland Loan demand described as unprecedented. Why it matters: Offsets Financials weakness. |
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Twelve Fed districts District roundup Boston Contracting −1.5 Outlook ▼ Slowed markedly. |
| New York Contracting −2.0 Outlook ▼ Deteriorated sharply. |
| Philadelphia Contracting −2.0 Outlook ▼ Fell severely. |
| Cleveland Contracting −2.0 Outlook ▼ Contracted sharply. |
| Richmond Contracting −1.5 Outlook ▼ Declined across many sectors. |
| Atlanta Contracting −1.5 Outlook ▼ Deteriorated. |
| Chicago Contracting −1.5 Outlook ▼ Declined sharply in some industries. |
| St. Louis Contracting −2.0 Outlook ▼ Declined sharply. |
| Minneapolis Contracting −2.0 Outlook ▼ Fell substantially. |
| Kansas City Contracting −1.5 Outlook ▼ Deteriorated sharply. |
| Dallas Contracting −2.0 Outlook ▼ Sudden and broad-based weakening. |
| San Francisco Contracting −1.5 Outlook ▼ Contracted notably. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Uniform -2 across all twelve districts leaves weighted and unweighted scores equal at the floor.
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| | Energy — Dallas -2 with the largest Energy weight drives the weighted score below the unweighted average.
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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 |