EconomyxAI · Sector Watch July 2005Released July 27, 2005 |
| |
Conditions index +0.56 avg of 11 sectors, −2 to +2 |
| Outlook index +0.31 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 7/11 sectors improving |
|
|
This release in brief The read | ■ | Released July 27, 2005, with information collected before mid-July 2005 (date not printed in the PDF). | | ■ | Activity continued to expand in all districts in June and early July; Richmond and Dallas said growth increased, Cleveland called it stronger and more balanced, and only New York reported slowing. | | ■ | Retail sales rose in most districts and vehicle sales jumped on a new round of automaker price discounting, with Cleveland reporting dramatic gains. | | ■ | Manufacturing expanded moderately to solidly, services and tourism kept growing, and commercial real estate improved in most districts while housing cooled in a few hot markets. | | ■ | Labor markets firmed with spot skilled-worker and truck driver shortages; overall price pressures eased slightly or held steady despite higher energy costs. |
|
Sector prospects Where the 3–12 month view points Strongest prospects | Consumer Discretionary
XLY
▲ Turning up | +0.61 |
| Industrials
XLI
▶ Steady | +0.54 |
|
|
| Weakest prospects Communication Services
XLC
▼ Turning down | −0.02 |
| Consumer Staples
XLP
▶ Steady | −0.00 |
| Utilities
XLU
▶ Steady | +0.01 |
|
|
|
|
All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
|---|
| 1 | Energy
XLE | | +0.87 | Favorable | +1.32 | +1.00 | ▶ +0.06 | | 2 | Consumer Discretionary
XLY | | +0.61 | Favorable | +1.19 | +0.46 | ▲ +0.69 | | 3 | Industrials
XLI | | +0.54 | Favorable | +1.00 | +0.50 | ▶ +0.06 | | 4 | Real Estate
XLRE | | +0.54 | Favorable | +0.95 | +0.50 | ▶ +0.13 | | 5 | Information Technology
XLK | | +0.45 | Leaning Favorable | +0.67 | +0.50 | ▶ +0.12 | | 6 | Financials
XLF | | +0.26 | Leaning Favorable | +0.25 | +0.50 | ▶ −0.13 | | 7 | Materials
XLB | | +0.22 | Leaning Favorable | +0.45 | +0.00 | ▲ +0.04 | | 8 | Health Care
XLV | | +0.08 | Neutral | +0.29 | +0.00 | ▶ +0.01 | | 9 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Communication Services
XLC | | −0.02 | Neutral | +0.00 | +0.00 | ▼ −0.27 |
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 | | +1.00 |
All districts expanding; three said growth increased and four solid; only New York slowed. | Labor demand increased in most districts; firming in six; skilled-worker shortages; wage pressure moderate. | | Inflation Pressure (higher = headwind) | | +0.25 |
Overall price pressures eased slightly or unchanged; New York input prices decelerated markedly; energy and building materials still rising. | Loan demand increased or remained solid; credit quality strong; competition easing some commercial standards; VC up for first time in five years in Chicago. | Expectations for factory activity generally upbeat; New York manufacturers' expectations rose; retailers generally positive. |
|
Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
|---|
| Information TechnologyXLK | +1 | · | +1 | · | · | · | · | · | · | · | +1 | +1 | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | · | +1 | +1 | · | +1 | · | · | · | · | +1 | · | | Consumer DiscretionaryXLY | −1 | +1 | +1 | +1 | +1 | +1 | +1 | · | +1 | +2 | +1 | +2 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | · | +1 | +1 | +1 | · | +1 | +1 | +2 | +1 | | MaterialsXLB | · | · | · | −1 | · | +1 | · | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
|
Top highlights What moved the scores Energy +2 Dallas Oil services turning down work; strong pricing power. Why it matters: Largest Energy weight. | Consumer Discretionary +2 San Francisco Auto sales up substantially; tourism strong. Why it matters: Large Discretionary weight. | Real Estate +2 Dallas Real estate hot; cement shortages. Why it matters: Real Estate strength. | Industrials +1 broad−based Broad-based Manufacturing expanded in nearly all districts. Why it matters: Broad Industrials strength. | Consumer Discretionary +2 Kansas City Auto sales sharply up; tourism strongly up. Why it matters: Discretionary positive. | Information Technology +1 San Francisco, Boston, Dallas, Philadelphia Semiconductor demand high; IT services up. Why it matters: IT positive. |
|
Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Retail flat or down; manufacturing up. |
| New York Growing +0.5 Outlook ▲ Growth moderated; tourism robust. |
| Philadelphia Growing +1.0 Outlook ▲ Continued to expand. |
| Cleveland Growing +1.0 Outlook ▲ Broad-based improvement. |
| Richmond Growing +1.0 Outlook ▲ Expanded at a quicker pace. |
| Atlanta Growing +1.0 Outlook ▲ Solid growth. |
| Chicago Growing +0.5 Outlook ▲ Moderate growth; Michigan lags. |
| St. Louis Growing +0.5 Outlook ▲ Continued to expand. |
| Minneapolis Growing +1.0 Outlook ▲ Solid growth. |
| Kansas City Growing +1.0 Outlook ▲ Solid growth. |
| Dallas Growing +1.5 Outlook ▲ Strengthened; energy very strong. |
| San Francisco Growing +1.0 Outlook ▲ Solid growth. |
|
|
Where the signal is thin or split Divergences to watch | Energy — Dallas's +2 dominates the weighted Energy score.
|
| | Consumer Discretionary — San Francisco's +2 lifts the weighted score above the simple average.
|
|
|
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 |