EconomyxAI · Beige Book Sector Monitor November 2017Released November 29, 2017 |
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Conditions index +0.40 avg of 11 sectors, −2 to +2 |
| Outlook index +0.32 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 | ■ | Released November 29, 2017, with information collected on or before November 17, 2017. | | ■ | Activity increased at a modest to moderate pace across the 12 districts, with a slight improvement in the outlook; Chicago grew only slightly. | | ■ | All districts reported manufacturing expansion, mostly moderate; transportation grew in many districts; pre-holiday retail and autos mixed but largely flat. | | ■ | Residential real estate constrained by low inventory; nonresidential grew slightly; loan demand steady to moderately stronger; price pressures strengthened. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▲ Improving | +0.71 |
| Industrials
XLI
▶ Steady | +0.58 |
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| Weakest prospects Communication Services
XLC
▼ Turning down | −0.03 |
| Utilities
XLU
▶ Steady | +0.01 |
| Health Care
XLV
▶ Steady | +0.04 |
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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 | Information Technology
XLK | | +0.71 | Favorable | +1.11 | +0.73 | ▲ +0.41 | | 2 | Industrials
XLI | | +0.58 | Favorable | +1.07 | +0.64 | ▶ +0.05 | | 3 | Energy
XLE | | +0.32 | Leaning Favorable | +0.18 | +0.50 | ▶ +0.07 | | 4 | Materials
XLB | | +0.31 | Leaning Favorable | +0.23 | +0.50 | ▶ −0.03 | | 5 | Consumer Discretionary
XLY | | +0.31 | Leaning Favorable | +0.57 | +0.50 | ▶ +0.05 | | 6 | Financials
XLF | | +0.28 | Leaning Favorable | +0.34 | +0.50 | ▶ −0.06 | | 7 | Real Estate
XLRE | | +0.25 | Leaning Favorable | +0.66 | +0.14 | ▶ −0.08 | | 8 | Consumer Staples
XLP | | +0.12 | Neutral | +0.22 | +0.00 | ▶ +0.28 | | 9 | Health Care
XLV | | +0.04 | Neutral | +0.00 | +0.00 | ▶ +0.15 | | 10 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Communication Services
XLC | | −0.03 | Neutral | +0.00 | +0.00 | ▼ −0.23 |
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 |
Modest to moderate growth across districts; Chicago slight. | Employment growth increased to modest to moderate; labor markets widely tight. | | Inflation Pressure (higher = headwind) | | +0.75 |
Price pressures strengthened; input costs up moderately and passed through in places. | Loan demand steady to moderately stronger. | Slight improvement in outlooks; manufacturers expect further pickup. |
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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 | · | +2 | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | · | +1 | +1 | +1 | · | · | +1 | · | · | · | +1 | | Consumer DiscretionaryXLY | · | · | −1 | +1 | +1 | +1 | · | · | · | · | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | +1 | | EnergyXLE | · | · | · | · | · | +1 | · | +1 | · | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | · | · | +1 | +1 | · | · | · | +1 | · | · | +2 | | MaterialsXLB | · | · | · | +1 | +1 | · | +1 | · | · | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +2 San Francisco Cloud computing and security software demand robust. Why it matters: SF carries 47% of IT weight. | Real Estate +2 San Francisco Residential construction remained robust. Why it matters: SF carries large Real Estate weight. | Industrials +1 broad−based Broad-based All districts reported manufacturing expansion. Why it matters: Industrials positive everywhere. | Industrials +2 Kansas City Manufacturing and transportation activity rose strongly. Why it matters: Strongest Industrials read. | Information Technology +1 Boston, Richmond, St. Louis, Kansas City Semiconductor strength; IT services expanding. Why it matters: Broad IT support. | Financials +1 Philadelphia, Cleveland, Richmond, St. Louis, San Francisco Lending grew modestly to moderately. Why it matters: Financials positive. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Modest to moderate pace. |
| New York Growing +1.0 Outlook ▲ Continued to grow moderately. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Cleveland Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| Richmond Growing +1.0 Outlook ▲ Grew at a moderate rate. |
| Atlanta Growing +0.5 Outlook ▲ Modestly improving. |
| Chicago Flat Outlook ▲ Increased slightly. |
| St. Louis Growing +0.5 Outlook ▲ Improved at a modest pace. |
| Minneapolis Growing +0.5 Outlook ▲ Grew modestly overall. |
| Kansas City Growing +1.0 Outlook ▲ Increased moderately. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco +2 at 47% weight drives weighted IT well above the unweighted average.
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| | Real Estate — San Francisco +2 carries an otherwise flat Real Estate reading.
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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 |