EconomyxAI · Sector Watch February 2000Released March 8, 2000 · Data through February 29 |
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Conditions index +0.40 avg of 11 sectors, −2 to +2 |
| Outlook index +0.13 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | All twelve districts reported appreciable expansion, most of them strong. | | ■ | Retail sales expanded significantly over year-earlier levels, led by consumer electronics, appliances and home furnishings; apparel stayed sluggish. | | ■ | Manufacturing picked up in most districts, strengthening considerably in Richmond; steel demand was especially strong, while aerospace and farm equipment stayed weak. | | ■ | Real estate and construction stayed at high levels with low commercial vacancies and rising rents, though cooling emerged in Atlanta, Kansas City and parts of the West. | | ■ | Despite sharply higher crude prices, Dallas drilling was 'lackluster' and refiners cut output on squeezed margins; fuel costs pushed up trucking prices. |
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Sector prospects Where the 3–12 month view points Strongest prospects Materials
XLB
▶ Steady | +0.70 |
| Consumer Discretionary
XLY
▶ Steady | +0.62 |
| Industrials
XLI
▶ Steady | +0.34 |
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| Weakest prospects Energy
XLE
▼ Turning down | −0.28 |
| Consumer Staples
XLP
▶ Steady | −0.04 |
| Financials
XLF
▶ Steady | +0.04 |
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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 | | +0.70 | Favorable | +0.94 | n/a | ▶ +0.27 | | 2 | Consumer Discretionary
XLY | | +0.62 | Favorable | +0.97 | +0.60 | ▶ +0.21 | | 3 | Industrials
XLI | | +0.34 | Leaning Favorable | +0.82 | +0.48 | ▶ +0.00 | | 4 | Real Estate
XLRE | | +0.29 | Leaning Favorable | +0.72 | −0.31 | ▶ +0.34 | | 5 | Information Technology
XLK | | +0.20 | Leaning Favorable | +0.65 | n/a | ▶ −0.15 | | 6 | Communication Services
XLC | | +0.19 | Leaning Favorable | +0.32 | n/a | ▶ −0.08 | | 7 | Utilities
XLU | | +0.14 | Neutral | +0.08 | n/a | ▶ +0.08 | | 8 | Health Care
XLV | | +0.11 | Neutral | +0.21 | n/a | ▶ −0.01 | | 9 | Financials
XLF | | +0.04 | Neutral | +0.18 | −0.17 | ▶ +0.12 | | 10 | Consumer Staples
XLP | | −0.04 | Neutral | −0.05 | n/a | ▶ −0.03 | | 11 | Energy
XLE | | −0.28 | Leaning Unfavorable | −0.39 | +0.06 | ▼ −1.00 |
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 | | +1.50 |
Appreciable expansion in all twelve districts, strong in most; New York 'running flat out', Richmond and Dallas accelerating, Atlanta robust despite factory slowing. | Very tight markets with upward wage pressure for some groups: Philadelphia saw faster gains, New York graduate salaries up 10-15% and truckers' wages up sharply in Chicago, though Kansas City pressures eased. | | Inflation Pressure (higher = headwind) | | +0.75 |
Industrial commodities rose noticeably, especially energy, steel, metals, building materials and memory chips, and transport prices increased, but final goods and services prices were limited overall. | Loan demand solid, strong in Richmond, Chicago and San Francisco, but Cleveland lending fell, Kansas City loans edged down and New York and Kansas City tightened standards; deposit scarcity keeps margins thin. | Philadelphia expects continued growth with rising capex and Minneapolis investment outlook 'substantially stronger', but Boston retailers expect spending to moderate in the second half on rate hikes and oil prices. |
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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 | | FinancialsXLF | −1 | · | · | −1 | +1 | +1 | +1 | +1 | · | −1 | −1 | +1 | | Consumer DiscretionaryXLY | +1 | +1 | +1 | · | +2 | +1 | +1 | · | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | −1 | · | · | · | · | · | +1 | | IndustrialsXLI | · | +1 | +1 | +2 | +2 | −1 | +1 | +1 | +1 | · | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | +1 | −1 | · | +1 | · | −1 | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | · | −1 | · | | UtilitiesXLU | · | · | · | · | +1 | · | · | · | · | · | · | · | | Real EstateXLRE | +2 | +2 | · | · | +1 | −1 | +1 | +1 | +2 | · | · | +1 | | MaterialsXLB | · | · | +1 | +1 | +1 | +1 | +2 | +1 | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy −1 Dallas Drilling 'lackluster'; industry 'remains unimpressed' by high oil prices. Why it matters: Dallas carries the largest Energy weight; flipping from +1 to -1 is the biggest swing this release. | Real Estate +2 New York Housing 'exceptionally strong'; multifamily permits surged over 30%. Why it matters: New York carries large Real Estate weight. | Information Technology +1 San Francisco Strong semiconductor sales and rising exports on global demand. Why it matters: San Francisco is about 47% of IT; a tenth straight +1. | Materials +2 Chicago Steel consumption at an all-time high; price increases holding. Why it matters: The only +2 in Materials, leading broad strength. | Industrials +2 Richmond, Cleveland Capacity use and orders at the strongest rates in years; industrial equipment demand very strong. Why it matters: Two +2s offset Atlanta's -1. | Real Estate +2 Boston, Minneapolis Boston the 'hottest' office market in the country; Minneapolis commercial awards up 20%. Why it matters: Adds to a strong Real Estate reading. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Economic activity continues to expand. |
| New York Growing +2.0 Economy continued to run flat out. |
| Philadelphia Growing +1.0 Outlook ▲ Expanding moderately with gains in most sectors. |
| Cleveland Growing +2.0 Growth remains strong. |
| Richmond Growing +2.0 Advanced at a quicker pace. |
| Atlanta Growing +1.0 Outlook ▲ Expanding at a robust pace. |
| Chicago Growing +1.0 Continued to expand moderately. |
| St. Louis Growing +1.0 Continues to operate at a high level. |
| Minneapolis Growing +2.0 Outlook ▲ Continues to look very strong. |
| Kansas City Growing +1.0 Outlook ▲ Economic activity remained solid. |
| Dallas Growing +2.0 Outlook ▶ Continued to expand at a brisk pace. |
| San Francisco Growing +2.0 Strong performance in recent weeks. |
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Where the signal is thin or split Divergences to watch | Energy — Dallas turns -1 despite high oil prices, pulling weighted Energy negative because Dallas dominates the weights.
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| | Financials — four -1s, but weighted holds up better than unweighted because heavy-weight New York returns to 0.
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| | Materials — Chicago +2 plus nine +1s, the strongest Materials reading in the series.
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| | Real Estate — three +2s including heavy-weight New York lift weighted Real Estate back toward the top.
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| | Communication Services — Atlanta -1 on BellSouth cuts offsets San Francisco +1.
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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 |