EconomyxAI · Sector Watch May 2024Released May 29, 2024 |
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Conditions index +0.04 avg of 11 sectors, −2 to +2 |
| Outlook index −0.18 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released May 29, 2024, with information collected on or before May 20, 2024. | | ■ | Activity continued to expand; most districts reported slight or modest growth and two no change. | | ■ | Retail spending flat to up slightly with lower discretionary spending; travel and tourism strengthened; manufacturing flat to up. | | ■ | High rates constrained lending; housing demand rose modestly; CRE softened; outlooks grew somewhat more pessimistic. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▲ Improving | +0.23 |
| Health Care
XLV
▲ Turning up | +0.13 |
| Utilities
XLU
▶ Steady | +0.03 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.44 |
| Financials
XLF
▶ Steady | −0.24 |
| Industrials
XLI
▶ Steady | −0.14 |
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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 | | +0.23 | Leaning Favorable | +0.41 | +0.00 | ▲ +0.48 | | 2 | Health Care
XLV | | +0.13 | Neutral | +0.30 | +0.00 | ▲ +0.24 | | 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 | Materials
XLB | | −0.01 | Neutral | +0.00 | +0.00 | ▼ −0.05 | | 6 | Communication Services
XLC | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Information Technology
XLK | | −0.02 | Neutral | −0.10 | +0.00 | ▲ +0.09 | | 8 | Consumer Discretionary
XLY | | −0.07 | Neutral | +0.22 | −0.50 | ▶ +0.33 | | 9 | Industrials
XLI | | −0.14 | Neutral | +0.05 | −0.50 | ▶ +0.20 | | 10 | Financials
XLF | | −0.24 | Leaning Unfavorable | −0.21 | −0.50 | ▶ +0.23 | | 11 | Real Estate
XLRE | | −0.44 | Leaning Unfavorable | −0.40 | −0.50 | ▶ −0.51 |
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 |
Most districts reported slight or modest growth; two no change. | Employment rose at a slight pace; better labor availability. | | Inflation Pressure (higher = headwind) | | +0.50 |
Prices increased at a modest pace; consumers pushed back on increases. | Tight credit standards and high rates constrained lending growth. | Outlooks grew somewhat more pessimistic amid rising 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 | · | · | · | · | · | · | · | · | · | · | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | +1 | +1 | | FinancialsXLF | · | −1 | +1 | · | −1 | · | · | · | · | · | +1 | · | | Consumer DiscretionaryXLY | −1 | +1 | −1 | −1 | +1 | · | · | · | · | +1 | −1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | −1 | +1 | · | +1 | · | −1 | · | +1 | −1 | · | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | −1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | −1 | −1 | +1 | · | +1 | −1 | +1 | · | +1 | · | · | −1 | | MaterialsXLB | · | · | · | · | · | · | · | · | · | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate +1 Minneapolis, Richmond, Philadelphia, Chicago Residential sales rose strongly. Why it matters: Lifts Real Estate. | Real Estate −1 Boston, New York, San Francisco, Atlanta CRE weakened further; home sales slowed. Why it matters: Offsets Real Estate. | Consumer Discretionary +1 New York, Richmond, Kansas City, San Francisco Consumer spending rose. Why it matters: Supports Discretionary. | Consumer Discretionary −1 Boston, Philadelphia, Cleveland, Dallas Retail sales softened. Why it matters: Offsets Discretionary. | Industrials +1 Richmond, Philadelphia, Minneapolis, San Francisco Port imports up; manufacturing picked up. Why it matters: Industrials support. | Industrials −1 New York, Kansas City, Chicago Manufacturing declined. Why it matters: Industrials drag. |
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Twelve Fed districts District roundup Boston Flat Outlook ▶ About flat. |
| New York Growing +0.5 Outlook ▶ Grew slightly. |
| Philadelphia Growing +0.5 Outlook ▶ Up slightly. |
| Cleveland Growing +0.5 Outlook ▼ Expanded slightly. |
| Richmond Growing +0.5 Outlook ▶ Expanded modestly. |
| Atlanta Growing +0.5 Outlook ▶ Grew slightly. |
| Chicago Growing +0.5 Outlook ▶ Increased slightly. |
| St. Louis Growing +0.5 Outlook ▼ Increased slightly. |
| Minneapolis Growing +0.5 Outlook ▲ Grew slightly. |
| Kansas City Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Dallas Flat Outlook ▼ Flat to up slightly. |
| San Francisco Flat Outlook ▶ Unchanged. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — split +1 and -1 reads leave Discretionary near neutral.
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| | Real Estate — residential gains offset by CRE weakness in the largest-weight districts.
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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 |