EconomyxAI · Sector Watch November 2000Released December 6, 2000 |
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Conditions index +0.07 avg of 11 sectors, −2 to +2 |
| Outlook index −0.05 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 2/11 sectors improving |
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This release in brief The read | ■ | Growth continued to slow, with manufacturing leveling off or slowing in most districts and Cleveland, Dallas and St. Louis cooling further. | | ■ | Retail sales were lackluster for much of November before an unexpectedly strong Thanksgiving-weekend rebound in nine districts; only Cleveland was sluggish throughout, while auto sales declined in many districts. | | ■ | Automakers in Cleveland, Atlanta, Chicago and St. Louis scaled back production, heavy trucks and equipment stayed weak and steel suffered from falling prices and imports; semiconductors and office equipment stayed strong. | | ■ | Residential and commercial real estate were still strong but showed signs of slowing, with multi-family markets softening in Atlanta, Kansas City and Dallas. | | ■ | Lenders tightened commercial credit standards in seven districts and credit quality deteriorated in Atlanta and San Francisco, while energy producers ran at or near full capacity on elevated prices. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▼ Turning down | +0.39 |
| Communication Services
XLC
▲ Turning up | +0.26 |
| Utilities
XLU
▶ Steady | +0.05 |
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| Weakest prospects Materials
XLB
▶ Steady | −0.64 |
| Industrials
XLI
▼ Turning down | −0.40 |
| Real Estate
XLRE
▶ Steady | −0.13 |
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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 | | +0.39 | Leaning Favorable | +0.78 | +0.50 | ▼ −0.48 | | 2 | Communication Services
XLC | | +0.26 | Leaning Favorable | +0.40 | n/a | ▲ +0.17 | | 3 | Utilities
XLU | | +0.05 | Neutral | +0.00 | n/a | ▶ −0.10 | | 4 | Health Care
XLV | | +0.02 | Neutral | +0.04 | n/a | ▶ −0.25 | | 5 | Financials
XLF | | −0.01 | Neutral | +0.12 | −0.50 | ▶ +0.01 | | 6 | Consumer Discretionary
XLY | | −0.01 | Neutral | +0.13 | +0.00 | ▶ −0.10 | | 7 | Consumer Staples
XLP | | −0.02 | Neutral | +0.00 | n/a | ▶ −0.06 | | 8 | Information Technology
XLK | | −0.05 | Neutral | +0.42 | +0.50 | ▼ −0.48 | | 9 | Real Estate
XLRE | | −0.13 | Neutral | +0.20 | −0.50 | ▶ −0.32 | | 10 | Industrials
XLI | | −0.40 | Leaning Unfavorable | −0.48 | −0.32 | ▼ −0.69 | | 11 | Materials
XLB | | −0.64 | Unfavorable | −0.85 | n/a | ▶ −0.32 |
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 |
Districts kept expanding but growth slowed: manufacturing leveled off in Philadelphia, Richmond and Kansas City and slowed in six districts, Cleveland slowed 'even from the moderated rates' of October and Dallas continued to cool. | Labor markets still tight in most of the nation, but softening in Boston, Cleveland and Atlanta, with factory employment weakening in five districts. | | Inflation Pressure (higher = headwind) | | +0.00 |
Consumer goods prices flat in almost all districts and manufacturers unable to raise selling prices, while energy, rubber and plastics costs rose and lumber and drywall fell. | Real estate loan demand weaker and consumer and commercial demand mixed; seven districts tightened commercial credit standards and credit quality deteriorated in Atlanta and San Francisco. | Retailers broadly optimistic about the holiday season after the Thanksgiving rebound, but Boston contacts expect slower growth, Cleveland trucking expects soft conditions into 2001 and Chicago confidence fell. |
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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 | · | · | −1 | +1 | | Health CareXLV | +1 | · | · | · | · | · | · | −1 | · | · | · | · | | FinancialsXLF | · | · | · | −1 | · | +1 | · | · | · | · | −1 | +1 | | Consumer DiscretionaryXLY | −1 | · | · | −1 | · | · | · | −1 | · | · | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | · | · | · | −1 | · | −1 | −1 | −1 | · | · | −1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | · | · | · | · | +1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | +1 | · | −1 | −1 | · | · | · | · | −1 | +1 | | MaterialsXLB | · | · | −1 | −2 | · | −1 | −1 | −1 | −1 | · | −1 | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Materials −2 Cleveland Steel output cut 10%; hot-rolled prices down from $340 to $230 a ton; bankruptcy filed. Why it matters: The only -2 this release, deepening Materials weakness. | Industrials −1 broad−based Cleveland, Atlanta, Chicago, St. Louis, Dallas Automakers scaling back production; heavy truck orders at 40% of first-quarter levels. Why it matters: Five negatives with no positives push Industrials toward the bottom. | Energy +1 Dallas Rig count flattened, possibly at a maximum for a while; refiner margins very high. Why it matters: Dallas carries the largest Energy weight; easing from +2 to +1 trims the Energy lead. | Information Technology +1 San Francisco Semiconductor makers reported robust sales growth; software demand intense. Why it matters: San Francisco is about 47% of IT, keeping IT positive despite Dallas and St. Louis. | Information Technology −1 Dallas, St. Louis Telecom equipment demand slowing; 'flourishing high-tech sector has waned'. Why it matters: The first negative IT reads of the year. | Consumer Discretionary −1 Boston, Cleveland, St. Louis Sales 'fell off a cliff'; St. Louis retail down about 4%. Why it matters: Offsets the Thanksgiving rebound elsewhere. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▼ Continues to grow; more caution. |
| New York Growing +1.0 Expanding at a moderate pace. |
| Philadelphia Growing +1.0 Outlook ▲ Improved marginally in November. |
| Cleveland Flat Slowed even from moderated rates. |
| Richmond Growing +1.0 More moderate pace, still high. |
| Atlanta Growing +1.0 Outlook ▼ Moderate rate, matching slower pace. |
| Chicago Growing +1.0 Outlook ▼ Continued to expand, slowly. |
| St. Louis Flat Slowed somewhat in recent weeks. |
| Minneapolis Growing +1.0 Economic growth remains steady. |
| Kansas City Growing +1.0 Solid but signs of slowing. |
| Dallas Flat Outlook ▲ Continued to cool. |
| San Francisco Growing +1.0 Overall solid expansion. |
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Where the signal is thin or split Divergences to watch | Materials — Cleveland's -2 and seven -1s make Materials the weakest sector for a third straight release.
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| | Industrials — five -1s and no positives, the weakest Industrials reading since 1998.
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| | Energy — four +1s but no +2 for the first time since May; Energy still leads.
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| | Information Technology — Boston and San Francisco +1 against St. Louis and Dallas -1; San Francisco's weight keeps weighted IT positive.
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| | This release's text omits the opening overview paragraph of the national summary; macro scores rely on the sector paragraphs and district reports.
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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 |