EconomyxAI · Sector Watch July 2021Released July 14, 2021 |
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Conditions index +0.56 avg of 11 sectors, −2 to +2 |
| Outlook index +0.36 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released July 14, 2021, with information collected on or before July 2, 2021. | | ■ | The U.S. economy strengthened further, displaying moderate to robust growth; New York, Minneapolis and San Francisco grew strongly. | | ■ | Transportation, travel, manufacturing and services led; car sales slipped on tight inventories; residential construction softened on costs. | | ■ | Bank lending rose slightly to modestly; seven districts saw strong price growth; supply constraints more widespread. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▶ Steady | +0.49 |
| Financials
XLF
▶ Steady | +0.46 |
| Consumer Discretionary
XLY
▶ Steady | +0.45 |
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| Weakest prospects Materials
XLB
▼ Weakening | −0.17 |
| Consumer Staples
XLP
▼ Turning down | −0.08 |
| Utilities
XLU
▶ Steady | +0.05 |
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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 | Industrials
XLI | | +0.49 | Leaning Favorable | +1.29 | +0.50 | ▶ −0.01 | | 2 | Financials
XLF | | +0.46 | Leaning Favorable | +0.81 | +0.50 | ▶ −0.02 | | 3 | Consumer Discretionary
XLY | | +0.45 | Leaning Favorable | +1.27 | +0.50 | ▶ −0.15 | | 4 | Real Estate
XLRE | | +0.45 | Leaning Favorable | +1.14 | +0.50 | ▶ +0.06 | | 5 | Energy
XLE | | +0.42 | Leaning Favorable | +0.67 | +0.50 | ▶ −0.10 | | 6 | Information Technology
XLK | | +0.37 | Leaning Favorable | +0.56 | +0.50 | ▶ −0.07 | | 7 | Communication Services
XLC | | +0.27 | Leaning Favorable | +0.17 | +0.50 | ▶ −0.01 | | 8 | Health Care
XLV | | +0.26 | Leaning Favorable | +0.21 | +0.50 | ▶ +0.01 | | 9 | Utilities
XLU | | +0.05 | Neutral | +0.13 | +0.00 | ▶ +0.07 | | 10 | Consumer Staples
XLP | | −0.08 | Neutral | +0.00 | +0.00 | ▼ −0.28 | | 11 | Materials
XLB | | −0.17 | Leaning Unfavorable | −0.12 | +0.00 | ▼ −0.77 |
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 | | +1.25 |
U.S. economy strengthened further, displaying moderate to robust growth. | Three-quarters of districts saw slight or modest job gains; the rest moderate or strong. | | Inflation Pressure (higher = headwind) | | +1.50 |
Prices increased at an above-average pace; seven districts reported strong price growth. | Bank lending increased slightly or modestly in most districts. | Demand outlook improved further, with uncertainty over easing supply constraints. |
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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 | | FinancialsXLF | · | +1 | −1 | +1 | +1 | · | +1 | +1 | +1 | +1 | +2 | +1 | | Consumer DiscretionaryXLY | +1 | +2 | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | +1 | +2 | | Communication ServicesXLC | · | +1 | · | · | · | · | · | · | +1 | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +2 | +2 | +1 | +1 | +1 | +1 | +2 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | +1 | · | +1 | +1 | · | +1 | · | +1 | +1 | +2 | | MaterialsXLB | · | · | · | · | · | · | +1 | · | · | · | · | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Consumer Discretionary +2 New York, San Francisco Tourism and services strengthened solidly. Why it matters: Largest Discretionary weights. | Industrials +2 Richmond, Atlanta, Dallas Robust manufacturing demand; ports at unprecedented volumes. Why it matters: Strongest Industrials reads. | Industrials +1 broad−based Broad-based Manufacturing and transportation grew above average. Why it matters: Broad Industrials support. | Real Estate +2 San Francisco Residential real estate very strong. Why it matters: SF carries large Real Estate weight. | Financials +2 Dallas Loan demand expanded at a robust pace. Why it matters: Strongest Financials read. | Information Technology +1 San Francisco Demand for technology services remained elevated. Why it matters: SF carries 47% of IT weight. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Solid increases in demand. |
| New York Growing +2.0 Outlook ▲ Continued to grow at a strong pace. |
| Philadelphia Growing +1.0 Outlook ▲ Continued at a moderate pace. |
| Cleveland Growing +1.5 Outlook ▲ Expanded at a solid pace. |
| Richmond Growing +1.0 Outlook ▲ Grew moderately. |
| Atlanta Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Chicago Growing +1.0 Outlook ▲ Increased moderately, limited by supply. |
| St. Louis Growing +1.0 Outlook ▲ Improved at a moderate pace. |
| Minneapolis Growing +2.0 Outlook ▲ Strong growth. |
| Kansas City Growing +1.0 Outlook ▲ Expanded moderately. |
| Dallas Growing +1.5 Outlook ▲ Expanded at a solid rate. |
| San Francisco Growing +2.0 Outlook ▲ Expanded notably. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — New York and San Francisco +2 carry large weights, keeping the weighted score near its high.
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| | Financials — Dallas +2 outweighs Philadelphia -1, lifting the weighted score.
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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 |