EconomyxAI · Sector Watch November 1999Released December 8, 1999 · Data through November 30 |
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Conditions index +0.37 avg of 11 sectors, −2 to +2 |
| Outlook index −0.03 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Most districts reported continued moderate to strong growth in October and November. | | ■ | Growth was strong in New York, Richmond, Dallas, Minneapolis and San Francisco, moderate in Boston, Philadelphia and Atlanta, slower in Chicago and little changed in Cleveland, St. Louis and Kansas City. | | ■ | Retail sales slowed on warm weather before Thanksgiving, then picked up significantly over the holiday weekend; auto sales slipped in five districts. | | ■ | Manufacturing advanced in most districts and accelerated in Dallas and San Francisco on telecom, computer equipment and reviving foreign demand. | | ■ | Home sales slipped and residential construction slowed in more regions than not, while commercial real estate stayed strong and oil and gas drilling increased. |
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Sector prospects Where the 3–12 month view points Strongest prospects Materials
XLB
▶ Steady | +0.50 |
| Information Technology
XLK
▶ Steady | +0.39 |
| Consumer Discretionary
XLY
▶ Steady | +0.32 |
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| Weakest prospects Financials
XLF
▶ Steady | −0.22 |
| Consumer Staples
XLP
▶ Steady | −0.02 |
| Utilities
XLU
▶ Steady | +0.01 |
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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 | Materials
XLB | | +0.50 | Favorable | +0.53 | +0.00 | ▶ +0.19 | | 2 | Information Technology
XLK | | +0.39 | Leaning Favorable | +0.76 | n/a | ▶ +0.10 | | 3 | Consumer Discretionary
XLY | | +0.32 | Leaning Favorable | +0.44 | +0.55 | ▶ −0.23 | | 4 | Health Care
XLV | | +0.26 | Leaning Favorable | +0.12 | n/a | ▶ +0.15 | | 5 | Communication Services
XLC | | +0.25 | Leaning Favorable | +0.40 | n/a | ▶ +0.00 | | 6 | Energy
XLE | | +0.24 | Leaning Favorable | +0.61 | n/a | ▶ +0.06 | | 7 | Industrials
XLI | | +0.22 | Leaning Favorable | +0.95 | −0.15 | ▶ +0.10 | | 8 | Real Estate
XLRE | | +0.18 | Leaning Favorable | +0.24 | −0.40 | ▼ −0.43 | | 9 | Utilities
XLU | | +0.01 | Neutral | +0.00 | n/a | ▶ +0.00 | | 10 | Consumer Staples
XLP | | −0.02 | Neutral | +0.07 | n/a | ▶ +0.12 | | 11 | Financials
XLF | | −0.22 | Leaning Unfavorable | +0.00 | −0.14 | ▶ −0.47 |
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 |
Moderate to strong growth in most districts, strong in five; Chicago slower and Cleveland, St. Louis and Kansas City little changed. | Labor markets tight in all districts with wage increases of 3-10%, but the pace did not appear to be accelerating generally; Richmond reported substantial recent increases. | | Inflation Pressure (higher = headwind) | | +0.50 |
Retail prices nearly steady; manufacturing prices mixed with increases in New York and Philadelphia and for paper, building materials and chemicals. | Lending mixed: mortgage lending fell in seven districts and New York and Cleveland reported broad declines, while consumer lending rose and C&I grew in four districts; Kansas City banks raised prime. | Retailers confident the post-Thanksgiving pace will continue and most San Francisco respondents expect their region to outpace the nation, but Atlanta's factory outlook softened and some Boston retailers expect spending to moderate in early 2000. |
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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 | · | · | · | +2 | +1 | | Health CareXLV | +1 | · | · | · | · | · | · | +1 | · | · | · | · | | FinancialsXLF | −1 | −1 | · | −1 | +1 | +1 | +1 | · | · | +1 | · | +1 | | Consumer DiscretionaryXLY | +1 | · | +1 | +2 | +1 | · | · | −1 | +1 | −1 | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | · | · | · | +1 | −1 | · | −1 | +1 | · | · | +1 | | MaterialsXLB | · | · | · | +1 | · | · | +1 | · | · | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +2 Dallas Electronic firms' sales growth 'exceeded expectations'; chip fabs near full capacity. Why it matters: Dallas is a top-three IT district; the first +2 in IT this year. | Financials −1 New York Demand for loans continued to weaken in every category except C&I. Why it matters: New York is about 28% of Financials; a second straight -1 keeps the sector at the bottom. | Information Technology +1 San Francisco Demand for telecom and computer equipment remained strong. Why it matters: San Francisco is about 47% of IT; an eighth straight +1. | Energy +1 broad−based Dallas, Kansas City, Minneapolis Kansas City rigs 80% above the March low; North Dakota rigs nearly double a year ago. Why it matters: All three energy districts positive for a second release. | Real Estate −1 St. Louis, Atlanta Home builders report a sharp decline in both traffic and demand. Why it matters: The first negative Real Estate reads in two years. | Consumer Discretionary +2 Cleveland Retail growth 'merely very strong'; vehicle sales back to a record pace. Why it matters: The only +2 in Discretionary, offsetting St. Louis and Kansas City. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Continues to expand at a moderate pace. |
| New York Growing +2.0 Expanding at a fairly brisk pace. |
| Philadelphia Growing +1.0 Outlook ▲ Moved up, on balance. |
| Cleveland Growing +1.0 No major changes; spending and production strong. |
| Richmond Growing +2.0 Continued to advance at a solid pace. |
| Atlanta Growing +1.0 Outlook ▶ Continues to expand at a moderate pace. |
| Chicago Growing +1.0 Strong but expanding more slowly. |
| St. Louis Growing +1.0 Operating at a high level; some slowing. |
| Minneapolis Growing +2.0 Outlook ▲ Entering the new millennium at full speed. |
| Kansas City Flat Outlook ▲ Held steady after earlier weakness. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a slightly faster pace. |
| San Francisco Growing +2.0 Outlook ▲ Solid expansion of economic activity. |
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Where the signal is thin or split Divergences to watch | Financials — weighted well below unweighted as heavy-weight New York stays at -1 for a second release, joined by Boston and Cleveland.
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| | Information Technology — Dallas's +2 plus San Francisco's +1 lift weighted IT far above its unweighted average.
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| | Real Estate — first negative district reads since 1997 as housing slows; strength is now concentrated in commercial markets.
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| | Industrials — eleven +1s; Boston at 0 on weak industrial equipment.
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| | Utilities — no directional coverage; COMMUNICATION SERVICES has only San Francisco.
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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 |