EconomyxAI · Sector Watch November 2019Released November 27, 2019 |
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Conditions index +0.08 avg of 11 sectors, −2 to +2 |
| Outlook index +0.13 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released November 27, 2019, with information collected on or before November 18, 2019. | | ■ | Activity expanded modestly from October through mid-November, similar to the prior period. | | ■ | Consumer spending stable to moderately growing with higher auto sales and tourism; more districts reported manufacturing expansion though most saw no growth. | | ■ | Home sales flat to up and residential construction more widespread; loan growth slightly slower; energy deteriorated modestly; outlooks generally positive. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.41 |
| Consumer Discretionary
XLY
▶ Steady | +0.36 |
| Industrials
XLI
▲ Improving | +0.23 |
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| Weakest prospects | Financials
XLF
▼ Turning down | −0.10 |
| Materials
XLB
▶ Steady | −0.05 |
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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 | Real Estate
XLRE | | +0.41 | Leaning Favorable | +0.58 | +0.50 | ▶ +0.15 | | 2 | Consumer Discretionary
XLY | | +0.36 | Leaning Favorable | +0.71 | +0.50 | ▶ +0.14 | | 3 | Industrials
XLI | | +0.23 | Leaning Favorable | +0.11 | +0.42 | ▲ +0.38 | | 4 | Information Technology
XLK | | +0.22 | Leaning Favorable | −0.01 | +0.50 | ▶ +0.04 | | 5 | Health Care
XLV | | +0.07 | Neutral | +0.21 | +0.00 | ▶ +0.03 | | 6 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Utilities
XLU | | −0.01 | Neutral | +0.04 | +0.00 | ▶ −0.14 | | 9 | Materials
XLB | | −0.05 | Neutral | −0.17 | +0.00 | ▶ −0.14 | | 10 | Financials
XLF | | −0.10 | Neutral | −0.01 | +0.00 | ▼ −0.35 | | 11 | Energy
XLE | | −0.37 | Leaning Unfavorable | −0.57 | −0.50 | ▶ −0.13 |
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 expansion similar to the prior period. | Employment rose slightly; tight labor; moderate wages. | | Inflation Pressure (higher = headwind) | | +0.25 |
Prices rose modestly; energy and steel prices flat to down. | Continued but slightly slower loan growth. | Outlooks generally positive, some expecting pace to continue into next year. |
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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 | | FinancialsXLF | · | −1 | +1 | +1 | · | −1 | +1 | · | · | · | · | +1 | | Consumer DiscretionaryXLY | +1 | · | +1 | · | +1 | +1 | +1 | · | +1 | −1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | · | +1 | · | +1 | +1 | · | −1 | −1 | −1 | · | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | −1 | · | −1 | −1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | −1 | · | · | · | · | · | | Real EstateXLRE | +1 | −1 | · | +1 | +1 | +1 | · | · | +1 | +1 | +1 | +1 | | MaterialsXLB | · | · | +1 | −1 | · | · | · | · | · | · | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy −1 Dallas Oilfield services market remained depressed. Why it matters: Dallas carries the largest Energy weight. | Industrials +1 Boston, Philadelphia, Richmond, Atlanta Manufacturing revenues, shipments and orders grew. Why it matters: Industrials support. | Industrials −1 St. Louis, Minneapolis, Kansas City Production and orders declined. Why it matters: Partial Industrials offset. | Real Estate −1 New York Housing softer; commercial real estate weakened. Why it matters: NY carries large RE weight. | Real Estate +1 San Francisco, Dallas Residential activity expanded moderately; home sales rising. Why it matters: Large RE weights. | Financials −1 New York Finance sector activity softened; spreads narrowed. Why it matters: NY carries large Financials weight. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Modest to moderate pace; outlooks improved. |
| New York Flat Outlook ▶ Little or no growth. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Cleveland Growing +0.5 Outlook ▲ Increased modestly. |
| Richmond Growing +1.0 Outlook ▲ Grew moderately. |
| Atlanta Growing +0.5 Outlook ▲ Improved modestly. |
| Chicago Growing +0.5 Outlook ▲ Increased slightly. |
| St. Louis Flat Outlook ▼ Mixed but unchanged. |
| Minneapolis Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Kansas City Flat Outlook ▶ Flat. |
| Dallas Growing +1.0 Outlook ▲ Moderate expansion continued. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a modest pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco 0 at 47% weight mutes IT, leaving Boston and Kansas City gains to offset New York weakness.
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| | Energy — Dallas -1 with the largest Energy weight drives the weighted score below the unweighted average.
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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 |