EconomyxAI · Beige Book Sector Monitor November 2001Released November 28, 2001 |
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Conditions index −0.51 avg of 11 sectors, −2 to +2 |
| Outlook index −0.27 sectors with an outlook |
| Districts growing 0/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released November 28, 2001, with information collected before November 19. | | ■ | Activity generally remained soft, with further slowing in most regions outweighing signs of recovery in a few; Cleveland says its economy has bottomed out and New York sees a rebound from depressed levels. | | ■ | Zero-percent financing drove October auto sales to near-record levels, but non-auto retail was spotty and tourism stayed weak outside drive-to destinations. | | ■ | Manufacturing weakened further in nearly all regions, with telecom and other high-tech equipment softening again in five districts. | | ■ | Commercial real estate eased everywhere, mortgage refinancing hit record levels, and labor markets kept loosening as wages held steady or fell. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Staples
XLP
▶ Steady | +0.12 |
| Health Care
XLV
▶ Steady | +0.02 |
| Utilities
XLU
▶ Steady | −0.04 |
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| Weakest prospects Energy
XLE
▼ Weakening | −0.55 |
| Materials
XLB
▶ Steady | −0.54 |
| Real Estate
XLRE
▲ Turning up | −0.48 |
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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 | Consumer Staples
XLP | | +0.12 | Neutral | +0.14 | n/a | ▶ −0.04 | | 2 | Health Care
XLV | | +0.02 | Neutral | +0.10 | n/a | ▶ −0.04 | | 3 | Utilities
XLU | | −0.04 | Neutral | +0.00 | n/a | ▶ −0.07 | | 4 | Financials
XLF | | −0.21 | Leaning Unfavorable | −0.52 | −0.50 | ▶ +0.12 | | 5 | Industrials
XLI | | −0.32 | Leaning Unfavorable | −0.86 | −0.14 | ▲ +0.10 | | 6 | Communication Services
XLC | | −0.33 | Leaning Unfavorable | −0.47 | −0.50 | ▶ −0.23 | | 7 | Consumer Discretionary
XLY | | −0.34 | Leaning Unfavorable | −0.69 | −0.26 | ▲ +0.30 | | 8 | Information Technology
XLK | | −0.47 | Leaning Unfavorable | −0.75 | −0.29 | ▶ −0.24 | | 9 | Real Estate
XLRE | | −0.48 | Leaning Unfavorable | −0.61 | −0.56 | ▲ −0.04 | | 10 | Materials
XLB | | −0.54 | Unfavorable | −0.75 | +0.00 | ▶ −0.17 | | 11 | Energy
XLE | | −0.55 | Unfavorable | −1.22 | +0.09 | ▼ −0.99 |
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 |
Activity remained soft, with additional slowing in most regions outweighing signs of recovery in a few (Cleveland, New York, St. Louis retail). | Labor markets continued to ease; New York City employment fell by over 70,000 in October and Boston temp revenues are down 30-40 percent; Midwest hiring plans lowest since the early 1980s. | | Inflation Pressure (higher = headwind) | | −0.50 |
Prices generally stable; lower prices for autos, gasoline and computers; input prices flat to lower; insurance and health care sharply higher. | Record mortgage refinancing as rates fell, but business lending weakened with some tighter standards and rising delinquencies. | Mixed: Cleveland expects marked improvement in 1H 2002 and several districts' retailers brightened, but Boston, Philadelphia and Dallas see no pickup before 2H 2002 and auto dealers expect a Q1 drop. |
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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 | · | · | −1 | −1 | | Health CareXLV | · | · | · | · | · | +1 | · | · | · | · | · | · | | FinancialsXLF | · | −1 | −1 | · | · | · | · | · | · | −1 | · | −1 | | Consumer DiscretionaryXLY | −1 | −1 | · | · | · | −1 | −1 | +1 | · | · | −1 | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | −1 | −1 | | IndustrialsXLI | −1 | −1 | −1 | · | −1 | −1 | −1 | −1 | −1 | · | −1 | −1 | | Consumer StaplesXLP | · | · | +1 | · | · | · | · | · | · | · | +1 | · | | EnergyXLE | · | · | · | · | · | −1 | · | · | −1 | −2 | −2 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −2 | · | · | · | −1 | · | −1 | · | · | · | −1 | −1 | | MaterialsXLB | · | · | · | −1 | −1 | −1 | −1 | · | −1 | · | −1 | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy −2 Dallas Energy activity 'has gone from overheated to very cool'; U.S. rig count fell to near 1,000 from 1,300. Why it matters: Dallas carries the dominant Energy weight; a -2 there drives the sector sharply lower. | Energy −2 Kansas City Rig count down roughly a third from July's 14-year high, now evident in all producing areas. Why it matters: Kansas City is the second-largest Energy district; together with Dallas it makes Energy one of the weakest sectors. | Industrials −1 broad−based Ten districts Manufacturing weakened further in nearly all regions; Boeing's planned cuts began in Seattle and Southern California. Why it matters: Breadth across high-weight districts keeps Industrials firmly negative even as Cleveland stabilizes. | Consumer Discretionary +1 / 0 St. Louis, plus most districts on autos Zero-percent financing pushed light vehicle sales to a near-record 21 million annual rate in October. Why it matters: Autos lifted Discretionary from -2 readings in October to mostly 0 and -1, the largest single improvement. | Real Estate −2 Boston New England commercial real estate deteriorated significantly; suburban rents reported halved. Why it matters: The only -2 in Real Estate, pulling the sector below the neutral line. | Information Technology −1 Boston, Chicago, Dallas, San Francisco Telecom and other high-tech equipment softened further in five districts; Dallas telecom demand down 20-30 percent in a month. Why it matters: The big tech districts all negative keeps IT in the bottom half. |
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Twelve Fed districts District roundup Boston Contracting −1.0 Outlook ▼ Sales below year-earlier; great uncertainty on recovery timing. |
| New York Flat Signs of rebounding from depressed levels; labor markets deteriorating. |
| Philadelphia Contracting −1.0 Outlook ▼ Conditions remained soft; outlook generally subdued. |
| Cleveland Flat Outlook ▲ Economy has bottomed out; signs of recovery emerging. |
| Richmond Contracting −1.0 Outlook ▶ Activity edged lower as services and manufacturing softened. |
| Atlanta Contracting −1.0 Outlook ▼ Conditions weak despite record auto sales and resilient housing. |
| Chicago Contracting −1.0 Outlook ▼ Activity remained soft; joblessness continued to rise. |
| St. Louis Flat Outlook ▶ Buoyed by stronger-than-expected retail sales; manufacturing weak. |
| Minneapolis Contracting −1.0 Outlook ▼ Activity decreased; commercial real estate, energy, mining down. |
| Kansas City Flat Outlook ▼ Generally sluggish, though not all signs negative. |
| Dallas Contracting −1.0 Outlook ▼ Activity slowed somewhat; uncertainty discouraging spending. |
| San Francisco Contracting −1.0 Outlook ▼ Activity weak, though limited further deterioration. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Record auto sales lifted readings in mid-sized districts, but New York, San Francisco and Dallas stayed negative, so the weighted score sits below the simple average.
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| | Energy — Two -2 readings in Dallas and Kansas City, which carry most of the sector's weight, make the weighted score much weaker than the unweighted average.
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| | Communication Services — Thin coverage; telecom services weakness scored in Dallas and San Francisco, while telecom equipment declines were scored under IT.
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| | Utilities — Not discussed; scored 0 throughout.
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| | District validation: New York scored 0 overall on the rebound narrative while several sectors remained negative.
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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 |