EconomyxAI · Beige Book Sector Monitor July 2009Released July 29, 2009 |
| |
Conditions index −0.13 avg of 11 sectors, −2 to +2 |
| Outlook index −0.09 sectors with an outlook |
| Districts growing 0/12 per National Summary |
| Positive momentum 7/11 sectors improving |
|
|
This release in brief The read | ■ | Released July 29, 2009, with information collected before July 20, 2009. | | ■ | Economic activity stayed weak into the summer, but most districts said the pace of decline had moderated or activity had begun to stabilize at a low level; only Minneapolis reported contraction. | | ■ | Retail stayed sluggish with consumers price conscious, though Boston, Kansas City and San Francisco saw modest gains; used vehicles were strong and Chicago said the quick Chrysler and GM bankruptcies boosted confidence. | | ■ | Manufacturing was slightly more positive, rising in Richmond and Kansas City on inventory rebuilding, with technology, defense and pharmaceuticals as bright spots; commercial real estate was 'weak' or 'slow' in all 12 districts. | | ■ | Residential markets showed signs of improvement with large sales gains in Minneapolis and San Francisco; labor markets stayed extremely soft, coal prices fell 50 percent, and credit standards kept tightening. |
|
Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▶ Steady | +0.28 |
| Health Care
XLV
▲ Turning up | +0.28 |
| Energy
XLE
▲ Turning up | +0.20 |
|
|
| Weakest prospects Financials
XLF
▶ Steady | −0.51 |
| Real Estate
XLRE
▲ Improving | −0.32 |
| Consumer Discretionary
XLY
▶ Steady | −0.31 |
|
|
|
|
All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
|---|
| 1 | Information Technology
XLK | | +0.28 | Leaning Favorable | +0.67 | +0.00 | ▶ +0.59 | | 2 | Health Care
XLV | | +0.28 | Leaning Favorable | +0.65 | +0.00 | ▲ +0.50 | | 3 | Energy
XLE | | +0.20 | Leaning Favorable | −0.16 | +0.00 | ▲ +1.45 | | 4 | Materials
XLB | | +0.14 | Neutral | −0.13 | +0.00 | ▲ +0.94 | | 5 | Industrials
XLI | | +0.05 | Neutral | −0.27 | +0.14 | ▲ +0.78 | | 6 | Utilities
XLU | | −0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Consumer Staples
XLP | | −0.03 | Neutral | +0.13 | +0.00 | ▶ −0.23 | | 8 | Communication Services
XLC | | −0.03 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Consumer Discretionary
XLY | | −0.31 | Leaning Unfavorable | −0.82 | −0.14 | ▶ +0.29 | | 10 | Real Estate
XLRE | | −0.32 | Leaning Unfavorable | −0.71 | −0.50 | ▲ +0.56 | | 11 | Financials
XLF | | −0.51 | Unfavorable | −0.81 | −0.52 | ▶ −0.18 |
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 of decline moderated or stabilizing at low levels in most districts. | Labor markets slack everywhere; selective hiring; pace of manufacturing job loss moderating. | | Inflation Pressure (higher = headwind) | | +0.75 |
Upward price pressures minimal; some metals prices increased. | Lending stable or weaker; standards tightened in seven districts; Chicago credit moderately improved. | Modest, uneven manufacturing recovery expected within 6-12 months; few expect a pickup before 2010. |
|
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 | +1 | | Health CareXLV | · | · | · | +1 | +1 | +1 | +1 | · | +1 | · | +1 | +1 | | FinancialsXLF | −1 | −1 | · | · | −1 | −1 | · | −1 | −1 | −1 | −1 | −1 | | Consumer DiscretionaryXLY | · | −1 | −1 | −1 | −1 | −1 | · | −1 | −1 | · | −1 | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | −1 | · | −1 | · | +1 | −1 | · | · | −1 | +1 | · | −1 | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | +1 | · | · | | EnergyXLE | · | · | · | −2 | · | −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 |
|
Top highlights What moved the scores Information Technology +1 San Francisco Demand improved further for IT manufacturers. Why it matters: Largest IT weight. | Information Technology +1 Dallas High-tech sees 'upside potential' in forecasts. Why it matters: IT broadening. | Real Estate −1 New York and most districts Commercial leasing 'weak' or 'slow' everywhere. Why it matters: Real Estate negative. | Industrials +1 Richmond, Kansas City Manufacturing rising on inventory replenishment. Why it matters: Industrials improving. | Energy −2 Cleveland Coal prices down 50 percent; production down. Why it matters: Energy negative. | Health Care +1 San Francisco, Minneapolis, Richmond, Atlanta, Cleveland, Chicago, Dallas Steady to increased demand; health care hiring. Why it matters: Health Care positive. |
|
Twelve Fed districts District roundup Boston Contracting −0.5 Outlook ▶ Slow; retailers think they are past the bottom. |
| New York Flat Outlook ▲ More signs of stabilizing. |
| Philadelphia Contracting −1.0 Outlook ▲ Subdued; outlook slightly more positive. |
| Cleveland Flat Outlook ▶ Signs of stabilizing; coal down. |
| Richmond Contracting −1.0 Outlook ▶ Weak; manufacturing strengthening. |
| Atlanta Contracting −1.0 Outlook ▶ Generally weak; Florida home sales up. |
| Chicago Contracting −0.5 Outlook ▶ Weak but pace of decline slowed. |
| St. Louis Contracting −0.5 Outlook ▶ Pace of decline moderated. |
| Minneapolis Contracting −1.0 Outlook ▶ Contracted. |
| Kansas City Flat Outlook ▶ Further signs of stabilization. |
| Dallas Contracting −0.5 Outlook ▶ Mostly steady at subdued levels. |
| San Francisco Flat Outlook ▶ Largely steady; IT products improved further. |
|
|
Where the signal is thin or split Divergences to watch | It Leadership — IT became the strongest sector as tech manufacturing improved.
|
| | Real Estate — residential improving while commercial worsens.
|
|
|
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 |