EconomyxAI · Beige Book Sector Monitor February 2020Released March 4, 2020 |
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Conditions index +0.17 avg of 11 sectors, −2 to +2 |
| Outlook index +0.13 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released March 4, 2020, with information collected on or before February 24, 2020. | | ■ | Activity expanded at a modest to moderate rate in most districts; St. Louis and Kansas City reported no change. | | ■ | Consumer spending generally picked up but unevenly; the coronavirus was beginning to hurt travel and tourism; manufacturing expanded in most districts but with supply chain delays. | | ■ | Loan growth flat to up modestly; home sales picked up modestly; oil and gas prices fell on weak Chinese demand; outlooks for modest growth with coronavirus and election risks. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▲ Improving | +0.54 |
| Consumer Discretionary
XLY
▼ Turning down | +0.31 |
| Financials
XLF
▶ Steady | +0.29 |
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| Weakest prospects | Health Care
XLV
▶ Steady | −0.02 |
| Consumer Staples
XLP
▶ Steady | −0.00 |
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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 | Real Estate
XLRE | | +0.54 | Favorable | +0.93 | +0.50 | ▲ +0.31 | | 2 | Consumer Discretionary
XLY | | +0.31 | Leaning Favorable | +0.72 | +0.39 | ▼ −0.16 | | 3 | Financials
XLF | | +0.29 | Leaning Favorable | +0.39 | +0.50 | ▶ +0.24 | | 4 | Information Technology
XLK | | +0.27 | Leaning Favorable | +0.14 | +0.50 | ▶ +0.07 | | 5 | Industrials
XLI | | +0.20 | Leaning Favorable | +0.25 | +0.35 | ▲ +0.22 | | 6 | Materials
XLB | | +0.05 | Neutral | −0.01 | +0.00 | ▶ +0.11 | | 7 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Utilities
XLU | | −0.00 | Neutral | +0.00 | +0.00 | ▶ −0.02 | | 9 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Health Care
XLV | | −0.02 | Neutral | +0.04 | +0.00 | ▶ −0.14 | | 11 | Energy
XLE | | −0.50 | Unfavorable | −0.57 | −0.78 | ▶ −0.03 |
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 to moderate expansion in most districts. | Employment up slight to moderate; tight labor; modest-to-moderate wages. | | Inflation Pressure (higher = headwind) | | +0.25 |
Modest selling and input price growth; oil and gas prices fell. | Loan growth flat to up modestly; declines in St. Louis, New York and Kansas City. | Modest growth expected, with coronavirus and election cited as risks. |
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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 | −1 | · | +2 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | · | +1 | −1 | · | +1 | +1 | +1 | +1 | −1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | −1 | · | −1 | −1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | +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 Consumer Discretionary +2 San Francisco Sales of retail goods increased markedly. Why it matters: SF carries large Discretionary weight. | Energy −1 Dallas Industry distressed; coronavirus pushed oil prices down. Why it matters: Dallas carries the largest Energy weight. | Industrials +1 broad−based Broad-based Manufacturing expanded in most districts. Why it matters: Industrials positive in eight districts. | Real Estate +1 broad−based Broad-based Home sales picked up modestly. Why it matters: Real Estate positive across most districts. | Industrials −1 San Francisco Aerospace weakened; no orders from China in January. Why it matters: Partial Industrials offset. | Consumer Discretionary −1 New York Tourism weakened more than seasonal norm. Why it matters: NY weight trims Discretionary. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Continued expanding. |
| New York Growing +1.0 Outlook ▲ Picked up to a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Resumed modest growth. |
| Cleveland Growing +0.5 Outlook ▲ Increased modestly. |
| Richmond Growing +1.0 Outlook ▲ Grew moderately. |
| Atlanta Growing +0.5 Outlook ▲ Grew modestly. |
| Chicago Growing +0.5 Outlook ▲ Increased modestly. |
| St. Louis Flat Outlook ▲ Mixed but unchanged. |
| Minneapolis Growing +1.0 Outlook ▲ Increased moderately. |
| Kansas City Flat Outlook ▲ Largely unchanged. |
| Dallas Growing +1.0 Outlook ▲ Expanded moderately. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a modest pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco 0 at 47% weight mutes IT despite positive New York, Cleveland and St. Louis reads.
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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 |