EconomyxAI · Sector Watch August 2019Released September 4, 2019 |
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Conditions index +0.07 avg of 11 sectors, −2 to +2 |
| Outlook index +0.08 sectors with an outlook |
| Districts growing 8/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released September 4, 2019, with information collected on or before August 23, 2019. | | ■ | The economy expanded at a modest pace; most businesses remained optimistic despite tariff and trade uncertainty. | | ■ | Consumer spending mixed with autos up modestly and tourism solid; transportation softened on slowing global demand; manufacturing down slightly. | | ■ | Home sales constrained by low inventory; commercial real estate steady; lending grew modestly; employment and wages grew modestly; prices rose modestly. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Discretionary
XLY
▶ Steady | +0.35 |
| Real Estate
XLRE
▼ Weakening | +0.19 |
| Utilities
XLU
▶ Steady | +0.11 |
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| Weakest prospects Industrials
XLI
▼ Weakening | −0.24 |
| | Information Technology
XLK
▼ Turning down | −0.06 |
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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 Discretionary
XLY | | +0.35 | Leaning Favorable | +0.60 | +0.50 | ▶ −0.03 | | 2 | Real Estate
XLRE | | +0.19 | Leaning Favorable | +0.31 | +0.50 | ▼ −0.48 | | 3 | Utilities
XLU | | +0.11 | Neutral | +0.22 | +0.00 | ▶ +0.22 | | 4 | Materials
XLB | | +0.07 | Neutral | +0.18 | +0.00 | ▲ +0.28 | | 5 | Health Care
XLV | | +0.06 | Neutral | +0.11 | +0.00 | ▶ +0.13 | | 6 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Financials
XLF | | −0.00 | Neutral | +0.26 | +0.00 | ▶ −0.18 | | 8 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Information Technology
XLK | | −0.06 | Neutral | −0.15 | +0.00 | ▼ −0.17 | | 10 | Energy
XLE | | −0.09 | Neutral | −0.39 | +0.00 | ▶ +0.00 | | 11 | Industrials
XLI | | −0.24 | Leaning Unfavorable | −0.32 | −0.07 | ▼ −0.53 |
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 | | +0.50 |
Modest expansion; majority of businesses optimistic. | Modest job growth; manufacturing employment flat to down; tight labor. | | Inflation Pressure (higher = headwind) | | +0.25 |
Modest price increases; manufacturers had limited pricing power. | Lending volumes grew modestly across several districts. | Near-term outlook optimistic, though St. Louis turned slightly pessimistic. |
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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 | · | · | −1 | · | +1 | · | +1 | | Consumer DiscretionaryXLY | +1 | +1 | +1 | +1 | +1 | · | +1 | · | +1 | +1 | −1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | −1 | · | +1 | −1 | −1 | −1 | · | · | +1 | −1 | +1 | −1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | · | −1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | +1 | · | · | · | · | · | | 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 Energy −1 Dallas Drilling activity slipped further. Why it matters: Dallas carries the largest Energy weight. | Industrials −1 Boston, Cleveland, Richmond, Atlanta, Kansas City, San Francisco Manufacturing shipments and orders declined. Why it matters: Broad Industrials drag. | Consumer Discretionary +1 broad−based Broad-based Consumer spending, autos and tourism grew modestly. Why it matters: Discretionary positive in most districts. | Real Estate +1 San Francisco, Dallas Real estate expanded moderately. Why it matters: Large RE weights. | Information Technology −1 Boston, New York Semiconductor sales declines; information sector pullback. Why it matters: IT weakness outside SF. | Industrials +1 Philadelphia, Dallas Manufacturing accelerated; output strengthened. Why it matters: Partial Industrials offset. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Modest pace; some manufacturers declined. |
| New York Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Cleveland Flat Outlook ▶ Steady on balance. |
| Richmond Growing +0.5 Outlook ▲ Grew at a modest rate. |
| Atlanta Contracting −0.5 Outlook ▶ Softened slightly. |
| Chicago Growing +0.5 Outlook ▲ Increased slightly. |
| St. Louis Flat Outlook ▼ Mixed but generally unchanged. |
| Minneapolis Flat Outlook ▶ Stable. |
| Kansas City Growing +0.5 Outlook ▲ Edged up. |
| Dallas Growing +1.0 Outlook ▲ Moderate expansion continued. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco 0 (mixed chip reports) at 47% weight leaves Boston and New York declines to pull weighted IT slightly negative.
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| | Energy — Dallas -1 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 |