EconomyxAI · Sector Watch November 2002Released November 27, 2002 |
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Conditions index −0.17 avg of 11 sectors, −2 to +2 |
| Outlook index −0.12 sectors with an outlook |
| Districts growing 3/12 per National Summary |
| Positive momentum 4/11 sectors improving |
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This release in brief The read | ■ | Released November 27, 2002, with information collected before November 18. | | ■ | Activity grew slowly on balance; conditions were soft in Boston, Atlanta, Chicago, Minneapolis and Dallas, with marginal improvement in New York, Philadelphia and Kansas City. | | ■ | General merchandise sales improved slightly in six districts, but auto sales fell in every district as incentive-driven demand faded. | | ■ | Commercial real estate was weak in all twelve districts; housing remained strong in most, though New York, Chicago and Dallas saw easing demand. | | ■ | Labor markets were soft nearly everywhere except health care; prices were steady apart from shipping surcharges after the West Coast port disruption. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▲ Turning up | +0.29 |
| Health Care
XLV
▶ Steady | +0.11 |
| Consumer Staples
XLP
▶ Steady | +0.02 |
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| Weakest prospects Real Estate
XLRE
▼ Weakening | −0.50 |
| Information Technology
XLK
▼ Weakening | −0.35 |
| Materials
XLB
▶ Steady | −0.31 |
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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 | | +0.29 | Leaning Favorable | +0.16 | +0.50 | ▲ +0.41 | | 2 | Health Care
XLV | | +0.11 | Neutral | +0.18 | n/a | ▶ −0.11 | | 3 | Consumer Staples
XLP | | +0.02 | Neutral | +0.05 | n/a | ▶ +0.01 | | 4 | Industrials
XLI | | +0.01 | Neutral | −0.38 | +0.10 | ▲ +0.14 | | 5 | Utilities
XLU | | +0.00 | Neutral | +0.00 | n/a | ▶ +0.03 | | 6 | Communication Services
XLC | | −0.01 | Neutral | +0.00 | n/a | ▶ −0.01 | | 7 | Financials
XLF | | −0.12 | Neutral | −0.05 | −0.21 | ▶ −0.04 | | 8 | Consumer Discretionary
XLY | | −0.21 | Leaning Unfavorable | −0.51 | −0.03 | ▲ −0.03 | | 9 | Materials
XLB | | −0.31 | Leaning Unfavorable | −0.21 | −0.50 | ▶ −0.20 | | 10 | Information Technology
XLK | | −0.35 | Leaning Unfavorable | −0.60 | −0.23 | ▼ −0.58 | | 11 | Real Estate
XLRE | | −0.50 | Unfavorable | −0.51 | −0.45 | ▼ −0.52 |
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 | | +0.00 |
Activity grew slowly on balance; five districts soft, two mixed, three marginally improving and two growing at a slower pace. | Labor markets soft in nearly all districts; Kansas City layoff announcements high; temp help recovery stalled in Chicago; only health care short of workers. | | Inflation Pressure (higher = headwind) | | −0.25 |
Consumer and producer prices nearly steady; more reports of declines than increases in New York and Dallas; only shipping surcharges and health care costs rising. | Residential lending strong after the November rate cut, but other lending lackluster, C&I demand soft and delinquencies up in New York and Cleveland. | Contacts generally hopeful about 2003 (Boston, Cleveland, Minneapolis poll); Philadelphia and Kansas City manufacturers more optimistic; geopolitical uncertainty persists. |
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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 | · | · | | Consumer DiscretionaryXLY | · | · | · | · | · | −1 | −1 | −1 | · | · | · | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | +1 | +1 | · | −1 | · | −1 | · | · | · | −1 | −1 | | Consumer StaplesXLP | · | · | +1 | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | −1 | · | · | +1 | · | · | · | · | · | −1 | −1 | | MaterialsXLB | · | · | · | −1 | · | · | · | · | · | · | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology −1 San Francisco, Boston, Chicago, Minneapolis Declines in new orders and shipment cancellations; software demand worsened; telecom 'shell-shocked.' Why it matters: San Francisco carries the largest IT weight, so its -1 drives IT sharply lower. | Consumer Discretionary −1 San Francisco, Atlanta, Chicago, St. Louis Auto sales fell in all districts; SF new vehicle sales down 20 to 30 percent from September. Why it matters: Broad auto weakness keeps Discretionary negative even as general retail firms. | Real Estate −1 Boston, New York, Dallas, San Francisco Commercial real estate weak in all 12 districts; Boston rents down 20 to 30 percent. Why it matters: Four large-district negatives push Real Estate toward the bottom. | Industrials +1 New York, Philadelphia Fairly broad rebound in the region's manufacturing sector; industrial equipment demand up. Why it matters: Northeast positives partially offset weakness elsewhere. | Industrials −1 Chicago, Dallas, Richmond, San Francisco Heavy equipment orders 'surprisingly weak'; transportation services at very weak levels. Why it matters: Four negatives keep weighted Industrials below zero. | Materials −1 Cleveland, Dallas Steel spot prices down 10 percent since September; cement prices down 15 percent. Why it matters: The steel tariff boost has unwound, turning Materials negative. |
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Twelve Fed districts District roundup Boston Flat Outlook ▲ The economy remains slow. |
| New York Growing +1.0 Outlook ▲ Signs of strengthening, but overall pace still soft. |
| Philadelphia Growing +1.0 Outlook ▲ Business activity advancing marginally. |
| Cleveland Flat Outlook ▲ Mixed signals during October and early November. |
| Richmond Flat Outlook ▲ Economic activity grew more slowly. |
| Atlanta Flat Outlook ▼ Economy remained sluggish. |
| Chicago Flat Economic activity remained soft. |
| St. Louis Flat Outlook ▲ Economic conditions have been mixed. |
| Minneapolis Flat Outlook ▲ Economy was sluggish. |
| Kansas City Growing +1.0 Outlook ▲ Some signs of improvement after slowing earlier. |
| Dallas Contracting −1.0 Outlook ▶ Activity unchanged or down slightly. |
| San Francisco Flat Sluggish activity; growth down from previous period. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Auto weakness everywhere contrasts with improving general merchandise sales in six districts, leaving most districts at 0.
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| | Industrials — Northeast manufacturing rebound (New York, Philadelphia) offsets weakness in Chicago, Dallas, Richmond and San Francisco.
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| | Communication Services & Utilities — No meaningful coverage this release; scored 0.
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| | District validation: Dallas -1 overall consistent with negative Industrials, Real Estate and Materials; New York, Philadelphia and Kansas City +1 reflect marginal improvement.
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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 |