EconomyxAI · Sector Watch August 2021Released September 8, 2021 |
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Conditions index +0.29 avg of 11 sectors, −2 to +2 |
| Outlook index +0.14 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 0/11 sectors improving |
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This release in brief The read | ■ | Released September 8, 2021, with information collected on or before August 30, 2021. | | ■ | Economic growth downshifted slightly to a moderate pace as the Delta variant curbed dining out, travel and tourism. | | ■ | Manufacturing, transportation, services and residential real estate were stronger; auto sales weak on chip shortages. | | ■ | Loan trends varied widely; labor shortages extensive with strong wage growth; prices steady at an elevated pace. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▶ Steady | +0.47 |
| | Materials
XLB
▲ Turning up | +0.15 |
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| Weakest prospects Consumer Discretionary
XLY
▼ Weakening | −0.27 |
| Real Estate
XLRE
▼ Turning down | −0.10 |
| Utilities
XLU
▶ Steady | −0.03 |
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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 | Industrials
XLI | | +0.47 | Leaning Favorable | +1.29 | +0.50 | ▶ −0.01 | | 2 | Energy
XLE | | +0.41 | Leaning Favorable | +0.67 | +0.50 | ▶ −0.10 | | 3 | Materials
XLB | | +0.15 | Leaning Favorable | +0.24 | +0.00 | ▲ −0.02 | | 4 | Information Technology
XLK | | +0.11 | Neutral | +0.04 | +0.50 | ▼ −0.54 | | 5 | Financials
XLF | | +0.05 | Neutral | +0.44 | +0.00 | ▼ −0.46 | | 6 | Health Care
XLV | | +0.03 | Neutral | +0.13 | +0.00 | ▶ −0.01 | | 7 | Consumer Staples
XLP | | +0.01 | Neutral | +0.11 | +0.00 | ▶ −0.06 | | 8 | Communication Services
XLC | | −0.03 | Neutral | +0.00 | +0.00 | ▶ −0.18 | | 9 | Utilities
XLU | | −0.03 | Neutral | +0.00 | +0.00 | ▶ −0.13 | | 10 | Real Estate
XLRE | | −0.10 | Neutral | +0.24 | +0.00 | ▼ −0.83 | | 11 | Consumer Discretionary
XLY | | −0.27 | Leaning Unfavorable | +0.07 | +0.00 | ▼ −1.29 |
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 | | +0.75 |
Growth downshifted slightly to a moderate pace; Delta hit travel and dining. | All districts reported rising employment; extensive labor shortages; strong wage growth. | | Inflation Pressure (higher = headwind) | | +1.50 |
Inflation steady at an elevated pace; half the districts reported strong price increases. | Loan volumes ranged from down modestly to up strongly. | Most districts remained optimistic, with concern about supply disruptions and Delta. |
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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 | · | · | | Health CareXLV | · | · | · | · | · | · | · | −1 | · | −1 | · | +1 | | FinancialsXLF | · | +1 | · | +1 | +1 | −1 | · | · | · | · | +2 | · | | Consumer DiscretionaryXLY | +1 | · | · | +1 | +1 | +1 | −1 | · | +1 | · | +1 | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | · | +2 | +1 | +2 | +1 | +2 | +1 | +1 | +2 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | +1 | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +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 Industrials +2 Cleveland, Atlanta, St. Louis, Dallas Manufacturing orders increased strongly; record port volumes. Why it matters: Strongest Industrials reads. | Industrials +1 broad−based Broad-based Manufacturing and transportation remained strong. Why it matters: Broad Industrials support. | Financials +2 Dallas Loan demand increased at a robust pace. Why it matters: Strongest Financials read. | Real Estate −1 San Francisco Residential real estate edged down; buyers delayed purchases. Why it matters: SF carries large Real Estate weight. | Consumer Discretionary −1 San Francisco, Chicago Delta variant cut leisure and hospitality spending. Why it matters: Large Discretionary weights. | Energy +1 Dallas, Kansas City Energy activity expanded modestly. Why it matters: Largest Energy weights. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Expanded at a modest to strong pace. |
| New York Growing +0.5 Outlook ▲ Growth moderated. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a moderate pace. |
| Cleveland Growing +1.5 Outlook ▲ Grew solidly. |
| Richmond Growing +1.0 Outlook ▲ Expanded moderately. |
| Atlanta Growing +1.0 Outlook ▲ Expanded moderately. |
| Chicago Growing +1.0 Outlook ▲ Increased moderately. |
| St. Louis Growing +1.0 Outlook ▲ Improved at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| Kansas City Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Dallas Growing +1.5 Outlook ▲ Solid expansion continued. |
| San Francisco Growing +1.0 Outlook ▲ Increased at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Real Estate — San Francisco -1 with the largest Real Estate weight pulls the weighted score below the unweighted average.
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| | Consumer Discretionary — San Francisco and Chicago -1 trim the weighted score despite positive reads in Cleveland and Richmond.
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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 |