EconomyxAI · Beige Book Sector Monitor July 2003Released July 30, 2003 |
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Conditions index +0.16 avg of 11 sectors, −2 to +2 |
| Outlook index +0.10 sectors with an outlook |
| Districts growing 7/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released July 30, 2003, with information collected before July 21, 2003. | | ■ | Activity picked up 'a notch' in June and early July; only Chicago, St. Louis and San Francisco called it sluggish and Atlanta mixed, with the other eight districts seeing somewhat stronger growth. | | ■ | Manufacturing showed nascent recovery: ten districts reported mixed, steady or slightly improved conditions and nine were optimistic for the next six months. | | ■ | Ten districts reported increased services demand, including legal, consulting, high-tech and finance; energy activity stayed strong. | | ■ | Consumer spending stayed lackluster outside New York; housing remained strong on low rates while commercial real estate stayed sluggish. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▲ Improving | +0.59 |
| Industrials
XLI
▲ Improving | +0.52 |
| Financials
XLF
▲ Improving | +0.29 |
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| Weakest prospects Energy
XLE
▼ Weakening | −0.18 |
| Communication Services
XLC
▶ Steady | −0.14 |
| Consumer Staples
XLP
▶ Steady | −0.01 |
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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 | | +0.59 | Favorable | +0.61 | +0.57 | ▲ +0.83 | | 2 | Industrials
XLI | | +0.52 | Favorable | +0.56 | +0.40 | ▲ +1.09 | | 3 | Financials
XLF | | +0.29 | Leaning Favorable | +0.72 | +0.03 | ▲ +0.41 | | 4 | Real Estate
XLRE | | +0.12 | Neutral | +0.35 | +0.00 | ▶ +0.36 | | 5 | Consumer Discretionary
XLY | | +0.09 | Neutral | +0.12 | +0.12 | ▲ +0.53 | | 6 | Health Care
XLV | | +0.06 | Neutral | +0.12 | +0.00 | ▶ −0.13 | | 7 | Materials
XLB | | +0.01 | Neutral | −0.34 | +0.00 | ▶ +0.14 | | 8 | Utilities
XLU | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Consumer Staples
XLP | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Communication Services
XLC | | −0.14 | Neutral | −0.40 | +0.00 | ▶ −0.20 | | 11 | Energy
XLE | | −0.18 | Leaning Unfavorable | +0.06 | +0.00 | ▼ −0.94 |
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 |
Pace increased a notch; eight districts saw somewhat stronger growth, three sluggish, one mixed. | Wage increases minimal; rising benefit costs passed to employees and could restrain hiring. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price and wage inflation broadly in check; increases in energy, transportation and insurance only. | Solid mortgage demand, with Dallas surge to lock in rates; commercial loan demand weak in several districts and declining in Kansas City. | Several districts noted increased optimism; nine of twelve optimistic about manufacturing over the next six months. |
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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 | · | · | · | · | · | · | · | +1 | · | · | · | | FinancialsXLF | +1 | +2 | +1 | −1 | · | +1 | · | · | · | · | · | · | | Consumer DiscretionaryXLY | · | +1 | · | −1 | · | +1 | −1 | −1 | +1 | +1 | · | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | −1 | | IndustrialsXLI | · | +1 | +1 | +1 | · | · | +1 | −1 | +1 | +1 | · | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | · | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +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 Financials +2 New York Financial sector strengthened substantially. Why it matters: Largest Financials weight. | Industrials +1 broad−based Broad-based Manufacturing improved slightly in seven districts. Why it matters: Industrials turn positive. | Information Technology +1 San Francisco IT orders up; semiconductor utilization high. Why it matters: SF dominates IT. | Information Technology +1 Dallas, Chicago High-tech sales up significantly; telecom equipment recovering. Why it matters: Reinforces IT. | Consumer Discretionary +1 New York Retail sales improved noticeably and ahead of plan. Why it matters: Large Discretionary weight. | Consumer Discretionary −1 Cleveland, Chicago, St. Louis Sales slow, lackluster or down. Why it matters: Partial offset. |
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Twelve Fed districts District roundup Boston Flat Outlook ▲ Somewhat more upbeat. |
| New York Growing +1.0 Outlook ▲ Further broad-based improvement. |
| Philadelphia Growing +0.5 Outlook ▲ Rose slightly. |
| Cleveland Growing +0.5 Outlook ▲ Steady or improving. |
| Richmond Growing +0.5 Outlook ▶ Modest gains. |
| Atlanta Flat Outlook ▲ Mixed. |
| Chicago Contracting −0.5 Outlook ▲ Remained sluggish. |
| St. Louis Contracting −0.5 Outlook ▶ Little improvement. |
| Minneapolis Growing +0.5 Outlook ▲ Up slightly. |
| Kansas City Growing +0.5 Outlook ▲ Improved somewhat. |
| Dallas Growing +0.5 Outlook ▲ Signs of improving. |
| San Francisco Flat Outlook ▲ Continued to be sluggish. |
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Where the signal is thin or split Divergences to watch | Financials — New York +2 carries the largest Financials weight, lifting the national score sharply.
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| | Industrials — seven positive districts make this the first broadly positive Industrials reading in the series.
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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 |