EconomyxAI · Beige Book Sector Monitor November 2003Released November 26, 2003 |
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Conditions index +0.37 avg of 11 sectors, −2 to +2 |
| Outlook index +0.14 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released November 26, 2003, with information collected before November 17, 2003. | | ■ | The economy continued to expand in October and early November, with reasonably broad-based improvement across industries in most districts. | | ■ | Retail spending was up year over year in most districts and holiday expectations were generally positive; tourism and other services improved. | | ■ | Manufacturing picked up in most districts, led by Richmond's broad expansion, Chicago truck and construction equipment orders, and high-tech in four districts, though factory hiring stayed weak. | | ■ | Labor markets stabilized after a long period of weakness, with fewer layoffs and stronger temp demand; health care costs remained a near-universal concern. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▲ Turning up | +0.60 |
| Consumer Discretionary
XLY
▶ Steady | +0.36 |
| Materials
XLB
▶ Steady | +0.36 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | −0.01 |
| Utilities
XLU
▶ Steady | −0.00 |
| Communication Services
XLC
▼ Turning down | +0.02 |
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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 | Industrials
XLI | | +0.60 | Favorable | +0.92 | +0.61 | ▲ +0.37 | | 2 | Consumer Discretionary
XLY | | +0.36 | Leaning Favorable | +0.56 | +0.55 | ▶ +0.27 | | 3 | Materials
XLB | | +0.36 | Leaning Favorable | +0.49 | +0.00 | ▶ +0.50 | | 4 | Information Technology
XLK | | +0.26 | Leaning Favorable | +0.64 | +0.12 | ▶ +0.05 | | 5 | Financials
XLF | | +0.24 | Leaning Favorable | +0.49 | +0.05 | ▶ −0.13 | | 6 | Real Estate
XLRE | | +0.21 | Leaning Favorable | +0.60 | +0.10 | ▲ +0.31 | | 7 | Health Care
XLV | | +0.16 | Leaning Favorable | +0.28 | +0.00 | ▶ +0.18 | | 8 | Energy
XLE | | +0.10 | Neutral | +0.10 | +0.10 | ▶ +0.02 | | 9 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▼ +0.00 | | 10 | Utilities
XLU | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Consumer Staples
XLP | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 |
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 | | +0.75 |
Continued expansion with reasonably broad-based improvements; most districts noted growth in several industries. | Labor markets stabilized after an extended period of weakness; layoffs slowing and temp demand up, though permanent hiring awaited sustained orders. | | Inflation Pressure (higher = headwind) | | +0.25 |
Finished goods and services prices fairly stable; plywood, steel, brick, cement, metals and gypsum prices rising. | Loan demand subdued and refinancing slowing everywhere; credit quality good; M&A and investment banking picking up from low levels. | Holiday expectations generally positive; commercial real estate expected to strengthen next year; residential robust into 2004; Boston software outlook optimistic. |
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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 | | Health CareXLV | · | · | · | · | +1 | · | · | · | · | · | · | +1 | | FinancialsXLF | · | +1 | +1 | · | · | · | · | · | · | · | · | +1 | | Consumer DiscretionaryXLY | +1 | · | · | · | +1 | +1 | · | · | +1 | +1 | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +2 | · | +1 | +1 | +1 | +2 | · | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | · | +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 Industrials +2 Richmond, Kansas City Manufacturing expanded briskly and strongly. Why it matters: Strongest Industrials reads. | Industrials +1 broad−based Broad-based Manufacturing gains in eight more districts. Why it matters: No district negative. | Information Technology +1 San Francisco Semiconductor orders rose solidly. Why it matters: SF dominates IT. | Information Technology +1 Boston, Dallas Semiconductor and software demand improving; high-tech orders growing. Why it matters: Reinforces IT. | Real Estate +1 broad−based Broad-based Housing robust; commercial showing signs of firming. Why it matters: Real Estate positive. | Consumer Discretionary +1 broad−based Broad-based Retail sales rising in six districts. Why it matters: Discretionary positive. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Improving conditions. |
| New York Growing +0.5 Outlook ▲ Generally positive signals. |
| Philadelphia Growing +0.5 Outlook ▲ Improving. |
| Cleveland Growing +0.5 Outlook ▲ Appeared to improve. |
| Richmond Growing +1.0 Outlook ▲ Picked up a notch. |
| Atlanta Flat Outlook ▲ Stable. |
| Chicago Growing +0.5 Outlook ▲ Improved modestly again. |
| St. Louis Growing +0.5 Outlook ▲ Signs of improvement. |
| Minneapolis Growing +0.5 Outlook ▲ Increased. |
| Kansas City Growing +1.0 Outlook ▲ Expanded further. |
| Dallas Growing +0.5 Outlook ▲ Continued to improve slowly. |
| San Francisco Growing +1.0 Outlook ▲ Solid growth. |
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Where the signal is thin or split Divergences to watch | Industrials — broad-based gains with two +2 reads make Industrials the strongest sector; no district negative.
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| | Materials — four positive districts flip Materials positive for the first time in the year.
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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 |