EconomyxAI · Sector Watch July 2024Released July 17, 2024 |
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Conditions index −0.13 avg of 11 sectors, −2 to +2 |
| Outlook index −0.14 sectors with an outlook |
| Districts growing 7/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released July 17, 2024, with information collected on or before July 8, 2024. | | ■ | Seven districts reported some increase in activity while five noted flat or declining activity, three more than last time. | | ■ | Household spending little changed with consumers trading down; travel and tourism grew steadily; manufacturing ranged from brisk downturn to moderate growth. | | ■ | Soft demand for consumer and business loans; real estate mostly little changed; expectations for slower growth ahead. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Information Technology
XLK
▲ Improving | +0.13 |
| Utilities
XLU
▶ Steady | +0.03 |
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| Weakest prospects Real Estate
XLRE
▼ Weakening | −0.53 |
| Industrials
XLI
▼ Turning down | −0.38 |
| Consumer Discretionary
XLY
▼ Turning down | −0.35 |
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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 | Energy
XLE | | +0.14 | Neutral | +0.35 | +0.00 | ▶ +0.17 | | 2 | Information Technology
XLK | | +0.13 | Neutral | +0.17 | +0.00 | ▲ +0.42 | | 3 | Utilities
XLU | | +0.03 | Neutral | +0.13 | +0.00 | ▶ +0.00 | | 4 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 5 | Communication Services
XLC | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 6 | Financials
XLF | | −0.03 | Neutral | −0.17 | +0.00 | ▶ +0.14 | | 7 | Health Care
XLV | | −0.03 | Neutral | +0.00 | +0.00 | ▼ −0.10 | | 8 | Materials
XLB | | −0.23 | Leaning Unfavorable | −0.39 | +0.00 | ▼ −0.57 | | 9 | Consumer Discretionary
XLY | | −0.35 | Leaning Unfavorable | −0.17 | −0.50 | ▼ −0.35 | | 10 | Industrials
XLI | | −0.38 | Leaning Unfavorable | −0.56 | −0.50 | ▼ −0.52 | | 11 | Real Estate
XLRE | | −0.53 | Unfavorable | −0.76 | −0.50 | ▼ −0.48 |
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 | | +0.25 |
Seven districts grew; five flat or declining, three more than prior period. | Employment rose at a slight pace; manufacturing employment declined in several districts. | | Inflation Pressure (higher = headwind) | | +0.50 |
Prices increased at a modest pace; retailers discounting. | Most districts saw soft demand for consumer and business loans. | Slower growth expected over the next six months amid election and policy 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 | · | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | −1 | · | · | · | −1 | +1 | +1 | · | · | +1 | · | | Consumer DiscretionaryXLY | +1 | +1 | −1 | −1 | +1 | · | · | · | · | +2 | −1 | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | −1 | −1 | −1 | −1 | −1 | −1 | +1 | −1 | −1 | +1 | −1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | · | −1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | · | −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 Industrials −1 broad−based Broad-based Manufacturing new orders slowed; employment declined. Why it matters: Industrials negative. | Industrials +1 St. Louis, Dallas, Boston Manufacturing activity increased. Why it matters: Partial offset. | Consumer Discretionary +2 Kansas City Consumer spending grew at a robust pace. Why it matters: Strongest Discretionary read. | Consumer Discretionary +1 Boston, New York, Richmond Tourism and leisure travel grew. Why it matters: Supports Discretionary. | Consumer Discretionary −1 Philadelphia, Cleveland, Dallas, San Francisco Retail sales declined; consumers trading down. Why it matters: Offsets Discretionary. | Real Estate −1 New York, Atlanta, Dallas, San Francisco, Cleveland, Chicago CRE weakened; home sales declined. Why it matters: Real Estate drag. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Rose modestly. |
| New York Flat Outlook ▼ Little changed. |
| Philadelphia Growing +0.5 Outlook ▲ Grew slightly. |
| Cleveland Contracting −0.5 Outlook ▶ Declined slightly. |
| Richmond Growing +0.5 Outlook ▶ Grew slightly. |
| Atlanta Flat Outlook ▶ Relatively flat. |
| Chicago Growing +0.5 Outlook ▶ Increased slightly. |
| St. Louis Growing +0.5 Outlook ▶ Increased slightly. |
| Minneapolis Contracting −0.5 Outlook ▼ Fell slightly. |
| Kansas City Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Dallas Growing +0.5 Outlook ▶ Rose slightly. |
| San Francisco Flat Outlook ▶ Stable. |
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Where the signal is thin or split Divergences to watch | Industrials — broad-based -1 manufacturing reads make Industrials the weakest sector.
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| | Consumer Discretionary — Kansas City +2 and tourism strength offset weaker retail.
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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 |