EconomyxAI · Beige Book Sector Monitor June 2003Released June 11, 2003 |
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Conditions index −0.01 avg of 11 sectors, −2 to +2 |
| Outlook index +0.08 sectors with an outlook |
| Districts growing 4/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released June 11, 2003, with information collected before June 2, 2003. | | ■ | Some signs of increased activity in April and May, but most districts stayed sluggish; no district reported deterioration, and Dallas, Kansas City, New York and Minneapolis improved. | | ■ | The end of major hostilities in Iraq lifted confidence modestly; retail sales rebounded from March but stayed below a year ago, and auto inventories rose above desired levels. | | ■ | Manufacturing was mixed: New York, Minneapolis and Cleveland improved while Philadelphia, Richmond and Boston deteriorated; energy continued to strengthen. | | ■ | Housing strengthened in eight districts (Richmond saw 'unprecedented strength') but weakened in Dallas; commercial real estate stayed weak with scattered stabilization. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▼ Turning down | +0.46 |
| Financials
XLF
▶ Steady | +0.16 |
| Health Care
XLV
▶ Steady | +0.14 |
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| Weakest prospects Communication Services
XLC
▼ Turning down | −0.19 |
| Industrials
XLI
▶ Steady | −0.09 |
| Materials
XLB
▶ Steady | −0.09 |
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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 | | +0.46 | Leaning Favorable | +0.81 | +0.55 | ▼ +0.06 | | 2 | Financials
XLF | | +0.16 | Leaning Favorable | +0.38 | +0.00 | ▶ +0.28 | | 3 | Health Care
XLV | | +0.14 | Neutral | +0.29 | +0.00 | ▶ +0.10 | | 4 | Information Technology
XLK | | +0.02 | Neutral | −0.07 | +0.00 | ▲ +0.12 | | 5 | Real Estate
XLRE | | +0.01 | Neutral | +0.11 | −0.05 | ▶ +0.23 | | 6 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Consumer Staples
XLP | | −0.02 | Neutral | +0.00 | +0.00 | ▶ −0.06 | | 8 | Consumer Discretionary
XLY | | −0.09 | Neutral | −0.28 | +0.06 | ▶ +0.28 | | 9 | Materials
XLB | | −0.09 | Neutral | −0.55 | +0.00 | ▶ −0.32 | | 10 | Industrials
XLI | | −0.09 | Neutral | −0.42 | +0.28 | ▶ +0.03 | | 11 | Communication Services
XLC | | −0.19 | Leaning Unfavorable | −0.40 | +0.00 | ▼ −0.40 |
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 |
Some signs of increased activity, no district deteriorated; four districts improving, most still sluggish. | Labor markets soft with some downward wage pressure, but layoff announcements easing in Kansas City and NY office hiring picked up. | | Inflation Pressure (higher = headwind) | | +0.00 |
Mixed: lower crude, fuel and some manufactured goods prices vs rising insurance, tuition, transport and record petrochemical prices. | Lending continued to increase, mostly mortgage refinancing; business lending up in three districts; delinquencies little changed. | Unwinding war concerns lifted confidence modestly; retail outlook cautiously optimistic; drilling expected to grow through year-end. |
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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 | · | · | · | · | · | · | · | · | · | · | · | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | +1 | · | +1 | +1 | · | · | · | · | · | · | · | | Consumer DiscretionaryXLY | · | · | −1 | −1 | −1 | · | −1 | · | +1 | +1 | −1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | −1 | | IndustrialsXLI | −1 | +1 | −1 | · | −1 | · | −1 | −1 | +1 | · | · | −1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | +1 | · | · | +1 | · | · | +1 | · | +1 | −1 | · | | MaterialsXLB | · | · | · | −1 | · | −1 | −1 | · | −1 | · | · | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +1 New York Fairly widespread manufacturing improvement. Why it matters: Large Industrials weight. | Industrials −1 Boston, San Francisco, Chicago, St. Louis Aircraft depressed; manufacturing weak. Why it matters: Industrials drag. | Real Estate +1 New York, Richmond, St. Louis, Kansas City Housing strong; office leasing pickup. Why it matters: Real Estate positive. | Real Estate −1 Dallas, Boston Real estate weak; CRE poor. Why it matters: Partial offset. | Energy +1 Dallas, Kansas City, San Francisco, Minneapolis Drilling expanded; rigs over 1,000. Why it matters: Energy positive. | Financials +1 New York Loan demand up for all types; securities improving. Why it matters: Largest Financials weight. |
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Twelve Fed districts District roundup Boston Contracting −0.5 Outlook ▼ Remains stalled. |
| New York Growing +1.0 Outlook ▲ Fairly widespread signs of a pickup. |
| Philadelphia Flat Outlook ▲ Mixed. |
| Cleveland Flat Outlook ▲ Remained mixed. |
| Richmond Contracting −0.5 Outlook ▲ Subpar. |
| Atlanta Flat Outlook ▲ Remained subdued. |
| Chicago Contracting −0.5 Outlook ▲ Remained sluggish. |
| St. Louis Contracting −0.5 Outlook ▲ Remains soft. |
| Minneapolis Growing +0.5 Outlook ▲ Increased slightly. |
| Kansas City Growing +0.5 Outlook ▲ Improved slightly. |
| Dallas Growing +0.5 Outlook ▲ Signs of improving. |
| San Francisco Flat Outlook ▶ Continued sluggish growth. |
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Where the signal is thin or split Divergences to watch | Industrials — New York's +1 lifts the weighted score above the simple average despite six negative districts.
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| | Real Estate — positives in several mid-weight districts outweigh Boston and Dallas, so Real Estate turns positive.
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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 |