EconomyxAI · Beige Book Sector Monitor August 2005Released September 7, 2005 |
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Conditions index +0.54 avg of 11 sectors, −2 to +2 |
| Outlook index +0.32 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 2/11 sectors improving |
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This release in brief The read | ■ | Released September 7, 2005, with information collected before August 29, 2005. | | ■ | Economic activity continued to expand in July and August in all districts except Boston, which reported mixed conditions; the survey largely predates Hurricane Katrina's full effects. | | ■ | Retail sales rose in most districts and vehicle sales were up everywhere, though Chicago and Dallas saw buyer fatigue in August; tourism was strong. | | ■ | Manufacturing increased in most districts, housing stayed strong but cooled in several markets, and commercial construction picked up; energy activity was strong while Katrina halted Gulf production. | | ■ | Labor markets tightened in several districts; energy, steel, chemical and cement prices rose while lumber fell; loan demand increased with strong commercial lending. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Financials
XLF
▲ Turning up | +0.73 |
| Real Estate
XLRE
▶ Steady | +0.43 |
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| Weakest prospects Communication Services
XLC
▶ Steady | −0.02 |
| Consumer Staples
XLP
▶ Steady | +0.01 |
| Utilities
XLU
▶ Steady | +0.02 |
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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 | | +0.82 | Favorable | +1.26 | +1.00 | ▶ −0.03 | | 2 | Financials
XLF | | +0.73 | Favorable | +1.09 | +0.50 | ▲ +0.83 | | 3 | Real Estate
XLRE | | +0.43 | Leaning Favorable | +0.76 | +0.50 | ▶ −0.14 | | 4 | Information Technology
XLK | | +0.41 | Leaning Favorable | +0.64 | +0.50 | ▶ −0.01 | | 5 | Industrials
XLI | | +0.39 | Leaning Favorable | +0.90 | +0.50 | ▶ −0.04 | | 6 | Consumer Discretionary
XLY | | +0.39 | Leaning Favorable | +0.81 | +0.50 | ▼ −0.02 | | 7 | Materials
XLB | | +0.19 | Leaning Favorable | +0.37 | +0.00 | ▶ +0.08 | | 8 | Health Care
XLV | | +0.03 | Neutral | +0.16 | +0.00 | ▶ −0.12 | | 9 | Utilities
XLU | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Consumer Staples
XLP | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Communication Services
XLC | | −0.02 | Neutral | +0.00 | +0.00 | ▶ −0.23 |
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 in all districts except Boston (mixed). | Labor markets tightening in Atlanta, Dallas, Kansas City, Minneapolis and San Francisco. | | Inflation Pressure (higher = headwind) | | −0.75 |
Energy and gasoline prices up significantly; steel, chemicals, plastics and cement up; some retail and hotel price increases. | Overall lending increased with strong commercial and industrial demand; residential lending mixed. | Outlook positive but clouded by energy prices and Katrina disruption. |
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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 | +1 | · | · | · | | FinancialsXLF | · | +2 | +1 | +1 | · | +1 | +1 | +1 | · | · | +1 | +1 | | Consumer DiscretionaryXLY | · | +1 | · | · | +2 | +1 | +1 | +1 | +1 | +1 | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | +1 | +1 | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | · | +1 | +1 | · | +1 | +1 | · | +1 | +1 | | MaterialsXLB | · | · | · | +1 | · | · | +1 | · | +1 | · | +1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Financials +2 New York Securities profits and revenues grew briskly. Why it matters: Largest Financials weight. | Energy +2 Dallas Service firms can't keep up; pricing "very good." Why it matters: Largest Energy weight. | Consumer Discretionary +2 Richmond Record auto sales; brisk retail; strong tourism. Why it matters: Discretionary strength. | Industrials +1 broad−based Broad-based Manufacturing expanded in ten districts. Why it matters: Broad Industrials strength. | Information Technology +1 San Francisco Semiconductor orders and sales strong. Why it matters: Largest IT weight. | Real Estate +1 New York, San Francisco Office availability at four-year lows; vacancies falling. Why it matters: Real Estate positive. |
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Twelve Fed districts District roundup Boston Flat Outlook ▶ Mixed; consumer goods makers weaker. |
| New York Growing +1.0 Outlook ▲ Strengthened; tourism exceptionally strong. |
| Philadelphia Growing +0.5 Outlook ▲ Expanded modestly. |
| Cleveland Growing +0.5 Outlook ▲ Steady improvement. |
| Richmond Growing +1.0 Outlook ▲ Expanded at a solid pace. |
| Atlanta Growing +1.0 Outlook ▲ Quite strong but moderating. |
| Chicago Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Expanded. |
| Minneapolis Growing +1.0 Outlook ▲ Broad-based growth. |
| Kansas City Growing +0.5 Outlook ▲ Expanded, slightly slower pace. |
| Dallas Growing +0.5 Outlook ▲ Moderate expansion; energy very strong. |
| 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 | Financials — New York's +2 carries the largest weight and lifts the weighted Financials score well above the simple average.
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| | Energy — Dallas's +2 dominates the weighted Energy score.
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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 |