EconomyxAI · Beige Book Sector Monitor November 2018Released December 5, 2018 |
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Conditions index +0.18 avg of 11 sectors, −2 to +2 |
| Outlook index +0.09 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released December 5, 2018, with information collected on or before November 26, 2018. | | ■ | Most districts expanded at a modest or moderate pace; Dallas and Philadelphia slowed and St. Louis and Kansas City grew only slightly. | | ■ | Consumer spending held steady with weaker nonauto retail and better auto sales; tariffs a concern but manufacturing still grew moderately in most districts. | | ■ | Home construction and sales declined or held steady; lending grew modestly with some slowing; optimism waned on tariffs, rising rates and labor constraints. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▶ Steady | +0.36 |
| Industrials
XLI
▼ Turning down | +0.24 |
| Materials
XLB
▲ Turning up | +0.20 |
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| Weakest prospects Real Estate
XLRE
▼ Turning down | −0.15 |
| Consumer Discretionary
XLY
▼ Weakening | −0.05 |
| 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 | | +0.36 | Leaning Favorable | +0.39 | +0.45 | ▶ +0.29 | | 2 | Industrials
XLI | | +0.24 | Leaning Favorable | +0.74 | +0.41 | ▼ −0.23 | | 3 | Materials
XLB | | +0.20 | Leaning Favorable | +0.32 | +0.00 | ▲ +0.24 | | 4 | Energy
XLE | | +0.06 | Neutral | +0.22 | +0.05 | ▶ +0.09 | | 5 | Communication Services
XLC | | +0.00 | Neutral | +0.00 | +0.00 | ▶ −0.03 | | 6 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Financials
XLF | | −0.04 | Neutral | +0.08 | +0.09 | ▼ −0.52 | | 9 | Health Care
XLV | | −0.04 | Neutral | +0.00 | +0.00 | ▶ −0.20 | | 10 | Consumer Discretionary
XLY | | −0.05 | Neutral | +0.22 | +0.10 | ▼ −0.53 | | 11 | Real Estate
XLRE | | −0.15 | Neutral | +0.01 | −0.10 | ▼ −0.55 |
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 |
Most districts modest or moderate; Dallas and Philadelphia slowed; St. Louis and Kansas City slight. | Labor tightened further; employment growth leaned to the slower side of modest to moderate. | | Inflation Pressure (higher = headwind) | | +0.50 |
Prices up modestly; tariff-induced cost increases spreading to retailers and restaurants. | Lending grew modestly with some slowing. | Firms positive but optimism waned on tariffs, rising rates and labor constraints. |
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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 | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | · | +1 | +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 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | −1 | · | −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 Industrials 0 Dallas Output growth softened notably. Why it matters: Largest Industrials weight goes neutral. | Industrials +1 broad−based Broad-based Manufacturing grew moderately in most districts. Why it matters: Industrials positive in nine districts. | Real Estate −1 New York, Cleveland, Chicago, St. Louis Housing softened; commercial demand fell. Why it matters: Real Estate negatives. | Real Estate +1 San Francisco Real estate activity solid. Why it matters: Partial offset. | Information Technology +1 San Francisco Software engineer salaries rising; services solid. Why it matters: SF carries 47% of IT weight. | Consumer Discretionary −1 Dallas Broad-based retail deceleration. Why it matters: Discretionary offset. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| New York Growing +0.5 Outlook ▲ Grown modestly. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Cleveland Growing +0.5 Outlook ▲ Grew modestly. |
| Richmond Growing +1.0 Outlook ▲ Grew at a moderate rate. |
| Atlanta Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Chicago Growing +0.5 Outlook ▲ Grew at a modest pace. |
| St. Louis Flat Outlook ▶ Slightly improved. |
| Minneapolis Growing +1.0 Outlook ▲ Increased moderately. |
| Kansas City Flat Outlook ▶ Increased slightly. |
| Dallas Growing +1.0 Outlook ▶ Slowed to 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 | Real Estate — Four -1 reads including New York pull weighted Real Estate toward zero despite SF +1.
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| | Industrials — Dallas at 0 removes the usual large positive from the weighted Industrials score.
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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 |