EconomyxAI · Beige Book Sector Monitor August 2009Released September 9, 2009 |
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Conditions index −0.00 avg of 11 sectors, −2 to +2 |
| Outlook index −0.11 sectors with an outlook |
| Districts growing 1/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released September 9, 2009, with information collected before August 31, 2009. | | ■ | Economic activity continued to stabilize in July and August: Dallas said activity firmed, five districts saw signs of improvement, five described conditions as stable, and St. Louis saw the decline moderating. | | ■ | Retail sales were mostly flat, but the cash-for-clunkers program boosted auto traffic and sales in most districts and lifted planned auto production in Richmond, Atlanta, Chicago and Minneapolis. | | ■ | Most districts reported modest manufacturing improvement with rising new orders; residential real estate kept improving with help from the first-time buyer tax credit, while commercial real estate demand stayed weak everywhere. | | ■ | Loan demand was weak and standards stayed tight, though Chicago saw credit improve; labor markets remained weak but temporary hiring picked up in eight districts. |
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Sector prospects Where the 3–12 month view points Strongest prospects Materials
XLB
▲ Improving | +0.26 |
| Industrials
XLI
▲ Improving | +0.24 |
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| Weakest prospects Financials
XLF
▶ Steady | −0.48 |
| Real Estate
XLRE
▲ Improving | −0.25 |
| Consumer Staples
XLP
▶ Steady | −0.05 |
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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 | Materials
XLB | | +0.26 | Leaning Favorable | +0.13 | +0.00 | ▲ +0.87 | | 2 | Industrials
XLI | | +0.24 | Leaning Favorable | +0.42 | +0.09 | ▲ +0.86 | | 3 | Energy
XLE | | +0.17 | Leaning Favorable | +0.07 | +0.00 | ▶ +0.97 | | 4 | Information Technology
XLK | | +0.15 | Neutral | +0.59 | +0.00 | ▶ −0.01 | | 5 | Communication Services
XLC | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 6 | Utilities
XLU | | −0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Consumer Discretionary
XLY | | −0.02 | Neutral | −0.09 | −0.23 | ▲ +0.82 | | 8 | Health Care
XLV | | −0.03 | Neutral | +0.12 | +0.00 | ▼ −0.24 | | 9 | Consumer Staples
XLP | | −0.05 | Neutral | +0.00 | +0.00 | ▶ −0.17 | | 10 | Real Estate
XLRE | | −0.25 | Leaning Unfavorable | −0.44 | −0.50 | ▲ +0.43 | | 11 | Financials
XLF | | −0.48 | Leaning Unfavorable | −0.84 | −0.52 | ▶ −0.12 |
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 | | +0.00 |
Activity stabilized; Dallas firmed; five districts improved; St. Louis decline moderating. | Labor markets weak across all districts, but temporary hiring picked up and layoffs slowed. | | Inflation Pressure (higher = headwind) | | +0.50 |
Wage pressures minimal; retail prices steady; some raw materials costs up. | Loan demand weak; standards unchanged to tighter; Chicago credit improved; venture capital up in San Francisco. | Outlook cautiously positive; manufacturers expect modest growth later this year or early 2010. |
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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 | | Health CareXLV | · | · | · | · | · | · | +1 | · | +1 | · | · | · | | FinancialsXLF | −1 | −1 | −1 | −1 | −1 | −1 | · | −1 | −1 | −1 | · | −1 | | Consumer DiscretionaryXLY | · | · | · | +1 | · | +1 | +1 | −1 | · | −1 | · | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | · | +1 | +1 | +1 | +1 | +1 | −1 | +1 | · | · | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | · | −1 | · | · | +1 | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | −1 | −1 | −1 | · | −1 | · | −1 | −1 | −1 | · | · | | MaterialsXLB | · | · | · | −1 | · | · | · | · | +1 | · | +1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +1 San Francisco New orders up for semiconductors and IT products. Why it matters: Largest IT weight positive. | Industrials +1 Philadelphia, Richmond, Atlanta, Cleveland, Chicago, Minneapolis Slight-to-moderate increases in new orders. Why it matters: Industrials turn positive. | Consumer Discretionary +1 Chicago, Atlanta, Cleveland Cash-for-clunkers drove auto sales. Why it matters: Discretionary improves. | Real Estate −1 Most districts Commercial demand weak; construction declining. Why it matters: Real Estate still negative. | Financials −1 Most districts Loan demand weak; standards tight. Why it matters: Financials negative. | Consumer Discretionary −1 San Francisco Retail sales anemic. Why it matters: Offsets Discretionary gains. |
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Twelve Fed districts District roundup Boston Flat Outlook ▲ Recent signs of improvement. |
| New York Flat Outlook ▲ Generally stable. |
| Philadelphia Flat Outlook ▲ Little change; scattered improvement. |
| Cleveland Flat Outlook ▶ Slight improvement. |
| Richmond Flat Outlook ▲ Continuing signs of improvement. |
| Atlanta Flat Outlook ▲ Signs of stabilization; clunkers boosted autos. |
| Chicago Flat Outlook ▲ Decline leveled off; cautiously optimistic. |
| St. Louis Contracting −0.5 Outlook ▲ Weak but decline moderated. |
| Minneapolis Flat Outlook ▲ Flat. |
| Kansas City Flat Outlook ▲ Generally held steady. |
| Dallas Growing +0.5 Outlook ▲ Firmed somewhat. |
| San Francisco Flat Outlook ▲ Scattered signs of firming. |
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Where the signal is thin or split Divergences to watch | Cash For Clunkers — temporary boost to Discretionary.
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| | Real Estate — residential improving but commercial still declining in all districts.
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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 |