EconomyxAI · Beige Book Sector Monitor July 2020Released July 15, 2020 |
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Conditions index +0.19 avg of 11 sectors, −2 to +2 |
| Outlook index +0.09 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 10/11 sectors improving |
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This release in brief The read | ■ | Released July 15, 2020, with information collected on or before July 6, 2020. | | ■ | Economic activity increased in almost all districts but remained well below pre-pandemic levels. | | ■ | Consumer spending picked up as nonessential businesses reopened, led by vehicle sales, food and beverage and home improvement; leisure and hospitality improved but far below year-ago levels. | | ■ | Manufacturing moved up from very low levels; home sales rose moderately while commercial real estate stayed low; energy fell further; loan demand flat outside PPP; outlooks highly uncertain. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▲ Turning up | +0.80 |
| Industrials
XLI
▲ Turning up | +0.76 |
| Consumer Discretionary
XLY
▲ Improving | +0.72 |
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| Weakest prospects Energy
XLE
▲ Turning up | −0.37 |
| Financials
XLF
▶ Steady | −0.16 |
| Utilities
XLU
▶ Steady | +0.00 |
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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 | | +0.80 | Favorable | +0.72 | +0.50 | ▲ +1.84 | | 2 | Industrials
XLI | | +0.76 | Favorable | +0.52 | +0.50 | ▲ +1.91 | | 3 | Consumer Discretionary
XLY | | +0.72 | Favorable | +0.83 | +0.00 | ▲ +2.79 | | 4 | Information Technology
XLK | | +0.57 | Favorable | +0.54 | +0.50 | ▲ +1.04 | | 5 | Health Care
XLV | | +0.26 | Leaning Favorable | +0.13 | +0.50 | ▲ +0.14 | | 6 | Consumer Staples
XLP | | +0.10 | Neutral | +0.43 | +0.00 | ▶ −0.28 | | 7 | Communication Services
XLC | | +0.04 | Neutral | +0.00 | +0.00 | ▶ +0.20 | | 8 | Materials
XLB | | +0.04 | Neutral | −0.18 | +0.00 | ▶ +0.40 | | 9 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.04 | | 10 | Financials
XLF | | −0.16 | Leaning Unfavorable | −0.03 | −0.50 | ▶ +0.37 | | 11 | Energy
XLE | | −0.37 | Leaning Unfavorable | −0.83 | −0.50 | ▲ +0.56 |
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 |
Activity increased in almost all districts from very low levels. | Employment increased on net as businesses reopened; payrolls well below pre-pandemic. | | Inflation Pressure (higher = headwind) | | +0.00 |
Prices little changed; PPE and beef up, weak demand limited pricing. | Loan demand flat outside PPP and mortgages; standards tightening. | Outlooks highly uncertain amid rising COVID-19 cases. |
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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 | · | · | +1 | · | | FinancialsXLF | · | · | · | · | +1 | −1 | −1 | +1 | · | −1 | −1 | +1 | | Consumer DiscretionaryXLY | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | +1 | +1 | +1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | +1 | +1 | +1 | · | −1 | +2 | · | −1 | +1 | +1 | · | | Consumer StaplesXLP | +1 | · | · | +1 | +1 | · | · | · | +1 | · | · | +1 | | EnergyXLE | · | · | · | · | · | −1 | · | · | −2 | −2 | −1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | · | +1 | +1 | +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 Consumer Discretionary +1 broad−based Broad-based Consumer spending picked up as businesses reopened. Why it matters: Discretionary rebound in eleven districts. | Industrials +2 Chicago Manufacturing production increased strongly. Why it matters: Strongest Industrials read. | Consumer Discretionary +2 Chicago Consumer spending increased substantially. Why it matters: Strongest Discretionary read. | Energy −2 Kansas City, Minneapolis Energy activity collapsed further. Why it matters: Deepest Energy reads. | Real Estate +1 broad−based Broad-based Home sales increased on low mortgage rates. Why it matters: Real Estate rebound. | Information Technology +1 San Francisco IT and business services companies continued hiring. Why it matters: SF carries 47% of IT weight. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Generally improved. |
| New York Growing +1.0 Outlook ▲ Rebounded moderately. |
| Philadelphia Growing +1.0 Outlook ▲ Expanded moderately. |
| Cleveland Growing +0.5 Outlook ▶ Expanded in recent weeks. |
| Richmond Growing +1.0 Outlook ▲ Grew compared to prior report. |
| Atlanta Contracting −0.5 Outlook ▶ Remained weak. |
| Chicago Growing +1.5 Outlook ▲ Increased strongly. |
| St. Louis Growing +1.0 Outlook ▼ Rebounded sharply. |
| Minneapolis Contracting −0.5 Outlook ▶ Mixed with declines in most sectors. |
| Kansas City Growing +0.5 Outlook ▲ Rebounded slightly. |
| Dallas Growing +1.0 Outlook ▶ Regained its footing. |
| San Francisco Contracting −0.5 Outlook ▶ Contracted modestly. |
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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.
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| | Energy — Dallas -1 plus Kansas City and Minneapolis -2 keep weighted Energy well below zero.
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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 |