EconomyxAI · Sector Watch July 2019Released July 17, 2019 |
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Conditions index +0.10 avg of 11 sectors, −2 to +2 |
| Outlook index +0.13 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 1/11 sectors improving |
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This release in brief The read | ■ | Released July 17, 2019, with information collected on or before July 8, 2019. | | ■ | Activity continued to expand at a modest pace overall from mid-May through early July, little changed from the prior period. | | ■ | Retail sales rose slightly while vehicle sales were flat; tourism broadly solid; manufacturing generally flat; oil and gas production fell somewhat. | | ■ | Home sales picked up; nonresidential construction strong; loan demand broad-based; outlook positive but trade uncertainty widespread; price inflation stable to down slightly. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.41 |
| Information Technology
XLK
▲ Turning up | +0.29 |
| Consumer Discretionary
XLY
▼ Turning down | +0.25 |
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| Weakest prospects Materials
XLB
▼ Turning down | −0.19 |
| | Industrials
XLI
▼ Weakening | −0.14 |
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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 | | +0.41 | Leaning Favorable | +0.72 | +0.50 | ▶ −0.07 | | 2 | Information Technology
XLK | | +0.29 | Leaning Favorable | +0.45 | +0.00 | ▲ +0.62 | | 3 | Consumer Discretionary
XLY | | +0.25 | Leaning Favorable | +0.44 | +0.50 | ▼ −0.07 | | 4 | Financials
XLF | | +0.10 | Neutral | +0.17 | +0.50 | ▼ −0.48 | | 5 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 6 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Utilities
XLU | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.07 | | 8 | Health Care
XLV | | −0.02 | Neutral | −0.04 | +0.00 | ▶ −0.06 | | 9 | Industrials
XLI | | −0.14 | Neutral | +0.03 | −0.06 | ▼ −0.50 | | 10 | Energy
XLE | | −0.15 | Leaning Unfavorable | −0.31 | +0.00 | ▶ −0.36 | | 11 | Materials
XLB | | −0.19 | Leaning Unfavorable | −0.31 | +0.00 | ▼ −0.39 |
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 expansion with little change from the prior period. | Employment grew modestly, slightly slower; some Northeast manufacturing and IT layoffs. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price inflation stable to down slightly; competition restrained pass-through. | Increased loan demand broad-based in all but two districts. | Modest growth expected despite trade-related uncertainty. |
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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 | +1 | | Health CareXLV | · | · | · | · | · | · | · | · | · | −1 | · | · | | FinancialsXLF | · | −1 | +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 | +1 | · | +1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | −1 | · | +1 | −1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | · | · | +1 | +1 | +1 | · | · | +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 Information Technology +1 San Francisco Semiconductor sector recovered with healthier sales and inventories. Why it matters: SF carries 47% of IT weight. | Energy −1 Dallas Drilling activity declined. Why it matters: Dallas carries the largest Energy weight. | Industrials −1 Boston, New York, Cleveland, Chicago Manufacturing declined on tariffs and slowing global demand. Why it matters: Broad Industrials drag. | Financials −1 New York Lower loan demand across all categories. Why it matters: NY carries large Financials weight. | Real Estate +1 broad−based Broad-based Home sales rose on lower mortgage rates. Why it matters: Real Estate positive in most districts. | Consumer Discretionary +1 Richmond, Atlanta, San Francisco Tourism robust; retail sales up moderately. Why it matters: Discretionary positive. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Expanded at a modest rate. |
| New York Growing +0.5 Outlook ▲ Slowed to a modest pace. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Cleveland Flat Outlook ▶ Stable and solid; manufacturing weakened. |
| Richmond Growing +0.5 Outlook ▲ Grew at a modest rate. |
| Atlanta Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Chicago Flat Outlook ▲ Little changed. |
| St. Louis Growing +0.5 Outlook ▲ Improved slightly. |
| Minneapolis Growing +1.0 Outlook ▲ Modest-to-moderate pace. |
| Kansas City Growing +0.5 Outlook ▲ Continued to expand slightly. |
| Dallas Growing +1.0 Outlook ▶ Moderate expansion continued. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco +1 at 47% weight lifts weighted IT above the unweighted average despite Northeast and Kansas City declines.
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| | Energy — Dallas -1 with the largest Energy weight pulls 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 |