EconomyxAI · Sector Watch January 2000Released January 19, 2000 · Data through January 12 |
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Conditions index +0.48 avg of 11 sectors, −2 to +2 |
| Outlook index +0.23 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Most districts reported strong growth in December and early January. | | ■ | Holiday spending growth was rapid, retail sales met or beat expectations everywhere except St. Louis, and e-commerce posted large gains in all regions. | | ■ | Manufacturing expanded in nearly every district and across industries, with robust growth in seven districts; Kansas City reported a dropoff and agricultural equipment, apparel, textiles and food stayed soft. | | ■ | Residential construction was mixed: inventory shortages in the Northeast, slowing in the South and Midwest, and expansion in the West. | | ■ | The century rollover caused little or no disruption; oil prices near $26 spurred new rigs in Minneapolis and Kansas City and gas drilling in Dallas. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Discretionary
XLY
▲ Turning up | +0.65 |
| Materials
XLB
▲ Improving | +0.59 |
| Information Technology
XLK
▶ Steady | +0.44 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | −0.11 |
| | 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 | Consumer Discretionary
XLY | | +0.65 | Favorable | +1.07 | +0.41 | ▲ +0.56 | | 2 | Materials
XLB | | +0.59 | Favorable | +0.81 | +0.50 | ▲ +0.33 | | 3 | Information Technology
XLK | | +0.44 | Leaning Favorable | +0.84 | +0.50 | ▶ +0.13 | | 4 | Health Care
XLV | | +0.38 | Leaning Favorable | +0.31 | n/a | ▶ +0.28 | | 5 | Industrials
XLI | | +0.24 | Leaning Favorable | +0.69 | +0.38 | ▼ −0.18 | | 6 | Real Estate
XLRE | | +0.22 | Leaning Favorable | +0.52 | −0.27 | ▲ +0.14 | | 7 | Communication Services
XLC | | +0.14 | Neutral | +0.40 | n/a | ▶ +0.00 | | 8 | Utilities
XLU | | +0.09 | Neutral | +0.00 | n/a | ▶ +0.00 | | 9 | Financials
XLF | | +0.09 | Neutral | +0.13 | +0.50 | ▶ +0.07 | | 10 | Energy
XLE | | +0.06 | Neutral | +0.61 | −0.41 | ▶ +0.00 | | 11 | Consumer Staples
XLP | | −0.11 | Neutral | −0.12 | n/a | ▶ −0.13 |
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 |
Strong growth in most districts; solid in Philadelphia and Kansas City and moderate in Atlanta and Chicago, with Y2K causing little or no disruption. | Labor markets tight in all districts with Florida help-wanted ads at record volume, but tightness not matched by large wage increases; construction workers seeking work in Philadelphia, Minneapolis and Dallas. | | Inflation Pressure (higher = headwind) | | +0.50 |
Consumer and producer prices mostly flat except rising petroleum; Minneapolis noted signs of accelerating inflation and steel increases were anticipated, while construction-material pressures eased. | Lending mixed: strong loan growth in six districts as consumer and commercial lending offset falling mortgages, while New York tightened standards and St. Louis and Dallas were flat. | Many retailers expect high activity to continue into 2000; almost all Boston manufacturers expect positive trends and 70% of Minneapolis manufacturers expect higher sales, while Atlanta retailers expect flat first-quarter sales. |
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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 | +2 | · | · | · | +1 | +1 | · | +1 | · | · | +1 | +1 | | Health CareXLV | · | · | · | · | · | +1 | · | · | · | · | · | +1 | | FinancialsXLF | · | −1 | · | +1 | · | +1 | +1 | · | · | +1 | · | +1 | | Consumer DiscretionaryXLY | +1 | +1 | +1 | +1 | +2 | +1 | +1 | · | +1 | +2 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | +1 | · | +1 | +1 | +1 | · | +1 | +1 | +1 | −1 | +1 | +1 | | Consumer StaplesXLP | · | · | −1 | · | −1 | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | · | +1 | −1 | · | · | −1 | · | · | +1 | +1 | | MaterialsXLB | +1 | · | +1 | +1 | · | +1 | +1 | +1 | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +1 San Francisco High-tech manufacturing plant reopened on improving East Asian demand. Why it matters: San Francisco is about 47% of IT; a ninth straight +1. | Information Technology +2 Boston Very strong order and revenue growth in semiconductors and computer equipment. Why it matters: A +2 adds to the broadest IT reading in the series. | Financials −1 New York Loan demand weakened; one in five bankers tightened standards across all categories. Why it matters: New York is about 28% of Financials; a third straight -1 keeps the weighted score low. | Materials +1 broad−based Nine districts Steel orders for the first quarter very strong; iron ore at full production. Why it matters: Breadth lifts Materials near the top of the ranking. | Energy +1 broad−based Dallas, Kansas City, Minneapolis Rig count up 60% from the April trough; Kansas City rigs doubled from the March low. Why it matters: All three energy districts positive for a third release. | Consumer Discretionary +2 Kansas City, Richmond Holiday season 'got off to a roaring start'; sales much higher than a year ago. Why it matters: Two +2s lead a broadly positive Discretionary reading. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Reports continue to be quite positive. |
| New York Growing +2.0 Growth shows few signs of slowing. |
| Philadelphia Growing +1.0 Outlook ▲ Activity continued at high levels. |
| Cleveland Growing +2.0 Outlook ▲ Remains on a strong growth trajectory. |
| Richmond Growing +2.0 Expanded at a rapid pace. |
| Atlanta Growing +1.0 Outlook ▶ Continues to expand at a moderate pace. |
| Chicago Growing +1.0 Continued to expand moderately. |
| St. Louis Growing +1.0 Outlook ▲ Continues to grow at a steady pace. |
| Minneapolis Growing +2.0 Outlook ▲ Starts the new millennium at full speed. |
| Kansas City Growing +1.0 Outlook ▲ Economic activity remained solid. |
| Dallas Growing +1.0 Activity remained strong. |
| San Francisco Growing +2.0 Continued strong performance. |
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Where the signal is thin or split Divergences to watch | Information Technology — Boston's +2 and San Francisco's +1 with five other +1s give the broadest IT reading in the series.
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| | Materials — nine +1s and no negatives, the strongest Materials reading since 1997.
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| | Financials — weighted below unweighted as heavy-weight New York is -1 for a third straight release.
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| | Real Estate — split between Northeast and West strength and slowing in the South and Midwest.
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| | Utilities — no directional coverage; COMMUNICATION SERVICES has only San Francisco.
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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 |