EconomyxAI · Sector Watch May 2021Released June 2, 2021 |
| |
Conditions index +0.69 avg of 11 sectors, −2 to +2 |
| Outlook index +0.50 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 9/11 sectors improving |
|
|
This release in brief The read | ■ | Released June 2, 2021, with information collected on or before May 24, 2021. | | ■ | The national economy expanded at a moderate pace, somewhat faster than the prior period; New York and San Francisco grew strongly. | | ■ | Leisure travel and restaurant spending rose with vaccinations; factory output increased despite widespread supply disruptions. | | ■ | Homebuilders limited sales as demand outpaced capacity; lending rose modestly; input costs rose briskly. |
|
Sector prospects Where the 3–12 month view points Strongest prospects Consumer Discretionary
XLY
▶ Steady | +0.84 |
| Industrials
XLI
▶ Steady | +0.70 |
| Financials
XLF
▲ Improving | +0.70 |
|
|
| Weakest prospects Utilities
XLU
▶ Steady | +0.07 |
| Consumer Staples
XLP
▶ Steady | +0.10 |
| Health Care
XLV
▶ Steady | +0.17 |
|
|
|
|
All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
|---|
| 1 | Consumer Discretionary
XLY | | +0.84 | Favorable | +1.45 | +1.00 | ▶ +0.69 | | 2 | Industrials
XLI | | +0.70 | Favorable | +1.31 | +1.00 | ▶ +0.17 | | 3 | Financials
XLF | | +0.70 | Favorable | +0.99 | +0.54 | ▲ +0.74 | | 4 | Materials
XLB | | +0.58 | Favorable | +0.64 | +0.50 | ▶ +0.40 | | 5 | Energy
XLE | | +0.54 | Favorable | +0.87 | +0.50 | ▶ +0.20 | | 6 | Information Technology
XLK | | +0.43 | Leaning Favorable | +0.59 | +0.50 | ▶ +0.17 | | 7 | Real Estate
XLRE | | +0.38 | Leaning Favorable | +1.00 | +0.50 | ▶ −0.10 | | 8 | Communication Services
XLC | | +0.37 | Leaning Favorable | +0.20 | +0.50 | ▶ +0.40 | | 9 | Health Care
XLV | | +0.17 | Leaning Favorable | +0.08 | +0.50 | ▶ −0.24 | | 10 | Consumer Staples
XLP | | +0.10 | Neutral | +0.33 | +0.00 | ▶ +0.10 | | 11 | Utilities
XLU | | +0.07 | Neutral | +0.13 | +0.00 | ▶ +0.13 |
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 | | +1.00 |
National economy expanded moderately, somewhat faster than before; several districts strong. | Two-thirds of districts saw modest job growth, the rest moderate; hiring difficult. | | Inflation Pressure (higher = headwind) | | +1.50 |
Price pressures increased further; input costs rose briskly. | Lending volumes increased modestly for households and businesses. | Contacts optimistic that growth will remain solid. |
|
Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
|---|
| Information TechnologyXLK | · | +1 | · | · | · | · | · | · | · | +1 | · | +1 | | Health CareXLV | · | +1 | · | · | · | · | · | −1 | · | · | · | · | | FinancialsXLF | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | | Consumer DiscretionaryXLY | +2 | +2 | +1 | +2 | +1 | +2 | +1 | +1 | +1 | +1 | · | +2 | | Communication ServicesXLC | · | +1 | · | · | +1 | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +2 | +1 | +1 | +2 | +1 | +1 | +2 | +1 | +1 | +2 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | +1 | · | · | · | · | +1 | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | · | +1 | +1 | +1 | · | +1 | +1 | +1 | +2 | +1 | | MaterialsXLB | · | · | · | +1 | · | · | +1 | +1 | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
|
Top highlights What moved the scores Consumer Discretionary +2 Boston, New York, Cleveland, Atlanta, San Francisco Restaurants and travel rebounded sharply with vaccinations. Why it matters: Broad, heavily weighted Discretionary surge. | Industrials +2 New York, Richmond, St. Louis, Dallas Manufacturing grew strongly with large backlogs. Why it matters: Strongest Industrials reads. | Industrials +1 broad−based Broad-based Factory output increased further. Why it matters: Broad Industrials support. | Real Estate +2 Dallas Single-family housing remained brisk. Why it matters: Large Real Estate weight. | Financials +2 Dallas Loan volumes rose robustly. Why it matters: Strongest Financials read. | Information Technology +1 San Francisco Strong new orders for computers and electronics. Why it matters: SF carries 47% of IT weight. |
|
Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| New York Growing +2.0 Outlook ▲ Continued to grow strongly. |
| Philadelphia Growing +1.0 Outlook ▲ Continued at a moderate pace. |
| Cleveland Growing +1.5 Outlook ▲ Recovery gained strength. |
| Richmond Growing +1.0 Outlook ▲ Expanded moderately. |
| Atlanta Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Chicago Growing +1.0 Outlook ▲ Increased moderately. |
| St. Louis Growing +1.0 Outlook ▲ Moderately improved. |
| Minneapolis Growing +1.5 Outlook ▲ Grew at a moderate-to-strong pace. |
| Kansas City Growing +1.0 Outlook ▲ Improved at a moderate pace. |
| Dallas Growing +1.5 Outlook ▲ Expanded at a solid pace. |
| San Francisco Growing +2.0 Outlook ▲ Expanded significantly. |
|
|
Where the signal is thin or split Divergences to watch | Consumer Discretionary — five +2 reads, including New York and San Francisco, push the weighted score to a cycle high.
|
| | Financials — Dallas +2 and New York, SF +1 lift the weighted score above the unweighted average.
|
|
|
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 |