EconomyxAI · Beige Book Sector Monitor February 2019Released March 6, 2019 |
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Conditions index +0.02 avg of 11 sectors, −2 to +2 |
| Outlook index +0.07 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released March 6, 2019, with information collected on or before February 25, 2019. | | ■ | Ten districts reported slight to moderate growth; Philadelphia and St. Louis reported flat conditions. | | ■ | The federal government shutdown dampened retail, autos, tourism and real estate in about half the districts; consumer spending mixed. | | ■ | Manufacturing strengthened on balance amid global demand and tariff worries; home sales lower; agriculture weak; energy mixed; prices rose modestly to moderately. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▲ Turning up | +0.36 |
| Industrials
XLI
▲ Turning up | +0.27 |
| Health Care
XLV
▶ Steady | +0.04 |
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| Weakest prospects | Consumer Discretionary
XLY
▼ Turning down | −0.19 |
| Financials
XLF
▶ Steady | −0.09 |
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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 | Information Technology
XLK | | +0.36 | Leaning Favorable | +0.46 | +0.47 | ▲ +0.19 | | 2 | Industrials
XLI | | +0.27 | Leaning Favorable | +0.48 | +0.50 | ▲ +0.05 | | 3 | Health Care
XLV | | +0.04 | Neutral | +0.07 | +0.00 | ▶ +0.07 | | 4 | Real Estate
XLRE | | +0.02 | Neutral | +0.07 | +0.00 | ▶ −0.01 | | 5 | Utilities
XLU | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 6 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Communication Services
XLC | | −0.02 | Neutral | −0.05 | +0.00 | ▶ −0.05 | | 8 | Materials
XLB | | −0.08 | Neutral | −0.01 | +0.00 | ▶ −0.23 | | 9 | Financials
XLF | | −0.09 | Neutral | −0.19 | +0.00 | ▶ −0.01 | | 10 | Consumer Discretionary
XLY | | −0.19 | Leaning Unfavorable | −0.24 | +0.00 | ▼ −0.62 | | 11 | Energy
XLE | | −0.24 | Leaning Unfavorable | −0.33 | −0.23 | ▶ −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 | | +0.25 |
Ten districts grew slight to moderate; Philadelphia and St. Louis flat; shutdown weighed on activity. | Employment rose in most districts; labor markets tight; wages up modestly to moderately. | | Inflation Pressure (higher = headwind) | | +0.50 |
Prices rose modestly to moderately; steel prices stabilized or fell. | Loan demand mixed; New York saw higher delinquencies, Philadelphia C&I robust. | Contacts generally expect continued growth, with concerns over global demand and tariffs. |
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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 | · | · | · | · | · | · | · | | FinancialsXLF | · | −1 | +1 | · | +1 | · | +1 | −1 | · | · | −1 | · | | Consumer DiscretionaryXLY | +1 | −1 | · | −1 | +1 | · | −1 | · | −1 | +1 | −1 | · | | Communication ServicesXLC | · | · | · | · | −1 | · | · | · | · | · | · | · | | IndustrialsXLI | · | · | · | · | · | +1 | · | +1 | +1 | · | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | · | −1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | · | −1 | · | · | −1 | · | −1 | −1 | −1 | +1 | +1 | | MaterialsXLB | · | · | · | −1 | · | · | · | · | +1 | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +1 San Francisco Software firms' hiring rose notably. Why it matters: SF carries 47% of IT weight. | Energy −1 Dallas Drilling declined and capex was cut. Why it matters: Dallas carries the largest Energy weight. | Industrials +1 Atlanta, St. Louis, Minneapolis, Dallas, San Francisco Manufacturing strengthened. Why it matters: Broad Industrials support. | Real Estate −1 Boston, Philadelphia, Chicago, Minneapolis, Kansas City Home sales lower. Why it matters: Real Estate negative across many districts. | Consumer Discretionary −1 Philadelphia, Chicago, Minneapolis, Dallas Shutdown and weather hurt retail and autos. Why it matters: Trims Discretionary. | Information Technology −1 Boston Semiconductors slowed sharply; capex mothballed. Why it matters: Partial IT offset. |
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Twelve Fed districts District roundup Boston Flat Outlook ▲ Mixed conditions; retail up, semiconductors slowed sharply. |
| New York Growing +0.5 Outlook ▲ Slight growth; consumer spending weakened. |
| Philadelphia Flat Outlook ▲ Activity paused. |
| Cleveland Growing +0.5 Outlook ▲ Modest growth driven by services. |
| Richmond Growing +0.5 Outlook ▲ Modest growth; ports robust. |
| Atlanta Growing +1.0 Outlook ▲ Moderate growth; tourism robust. |
| Chicago Growing +0.5 Outlook ▲ Slight growth; consumer spending fell modestly. |
| St. Louis Flat Outlook ▲ Activity unchanged. |
| Minneapolis Growing +0.5 Outlook ▲ Modest growth; some labor softness. |
| Kansas City Growing +0.5 Outlook ▲ Slight growth. |
| Dallas Growing +1.0 Outlook ▲ Moderate growth; outlook more optimistic. |
| San Francisco Growing +1.0 Outlook ▲ Moderate growth; services strong. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco +1 at 47% weight outweighs Boston semiconductor weakness.
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| | Energy — Dallas -1 with the largest Energy weight pulls 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 |