EconomyxAI · Sector Watch November 2020Released December 2, 2020 |
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Conditions index +0.28 avg of 11 sectors, −2 to +2 |
| Outlook index +0.05 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 2, 2020, with information collected on or before November 20, 2020. | | ■ | Most districts described modest or moderate expansion, but four reported little or no growth and activity began to slow in early November as COVID-19 cases surged. | | ■ | Manufacturing, distribution and logistics, homebuilding and existing home sales grew faster than average; loan portfolios deteriorated somewhat in retail and hospitality lending. | | ■ | Outlooks remained positive but optimism waned on the pandemic wave, new restrictions and expiring benefits and moratoriums; input prices rose modestly to moderately. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▶ Steady | +0.45 |
| Real Estate
XLRE
▶ Steady | +0.41 |
| Energy
XLE
▲ Improving | +0.34 |
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| Weakest prospects Financials
XLF
▼ Turning down | −0.30 |
| Consumer Discretionary
XLY
▼ Turning down | −0.08 |
| Health Care
XLV
▼ Turning down | −0.07 |
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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 | | +0.45 | Leaning Favorable | +1.04 | +0.50 | ▶ +0.05 | | 2 | Real Estate
XLRE | | +0.41 | Leaning Favorable | +0.77 | +0.50 | ▶ +0.03 | | 3 | Energy
XLE | | +0.34 | Leaning Favorable | +0.40 | +0.00 | ▲ +0.97 | | 4 | Information Technology
XLK | | +0.18 | Leaning Favorable | +0.25 | +0.50 | ▼ −0.36 | | 5 | Materials
XLB | | +0.16 | Leaning Favorable | +0.41 | +0.00 | ▶ −0.03 | | 6 | Communication Services
XLC | | −0.00 | Neutral | +0.00 | +0.00 | ▶ −0.01 | | 7 | Utilities
XLU | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Consumer Staples
XLP | | −0.02 | Neutral | +0.00 | +0.00 | ▶ −0.07 | | 9 | Health Care
XLV | | −0.07 | Neutral | −0.04 | +0.00 | ▼ −0.27 | | 10 | Consumer Discretionary
XLY | | −0.08 | Neutral | +0.29 | −0.50 | ▼ −0.12 | | 11 | Financials
XLF | | −0.30 | Leaning Unfavorable | −0.08 | −0.50 | ▼ −0.28 |
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 | | +0.25 |
Modest or moderate growth in most districts; slowing in early November as cases surged. | Employment rose in nearly all districts but slowly; childcare limiting labor supply. | | Inflation Pressure (higher = headwind) | | +0.50 |
Input prices up modestly to moderately; selling prices slight to modest. | Loan portfolios deteriorating in retail and hospitality; delinquencies expected in 2021. | Outlooks positive but optimism waning on pandemic wave and expiring support. |
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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 | · | · | · | · | | FinancialsXLF | · | −1 | −1 | · | · | · | +1 | −1 | · | +1 | · | +1 | | Consumer DiscretionaryXLY | · | · | · | +1 | −1 | · | +1 | · | · | −1 | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | · | · | +1 | +2 | +1 | +1 | +2 | +2 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | · | · | · | −1 | · | · | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | · | +1 | +1 | +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, St. Louis, Minneapolis Manufacturing shipments and orders increased strongly. Why it matters: Strongest Industrials reads. | Industrials +1 broad−based Broad-based Manufacturing and logistics grew faster than average. Why it matters: Industrials positive in ten districts. | Energy +1 Dallas Rig count rose; well completions rose sharply. Why it matters: Dallas carries the largest Energy weight. | Real Estate +1 broad−based Broad-based Home sales strong; inventories exceptionally tight. Why it matters: RE positive in most districts. | Financials −1 New York, Philadelphia Delinquencies turned up; C&I loans fell sharply. Why it matters: Large Financials weights. | Consumer Discretionary −1 Kansas City, Richmond Consumer spending and travel softened. Why it matters: Trims Discretionary. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Continued to expand. |
| New York Flat Outlook ▼ Flat. |
| Philadelphia Flat Outlook ▶ Held steady. |
| Cleveland Growing +1.0 Outlook ▲ Increased moderately. |
| Richmond Growing +1.0 Outlook ▲ Expanded at a moderate rate. |
| Atlanta Growing +0.5 Outlook ▲ Expanded modestly. |
| Chicago Growing +1.0 Outlook ▲ Increased moderately. |
| St. Louis Growing +0.5 Outlook ▶ Increased slightly; deteriorated late. |
| Minneapolis Growing +0.5 Outlook ▶ Grew modestly. |
| Kansas City Growing +0.5 Outlook ▲ Expanded slightly. |
| Dallas Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| San Francisco Growing +0.5 Outlook ▲ Expanded modestly. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco 0 at 47% weight mutes IT despite positive Boston, Cleveland, Richmond and Dallas reads.
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| | Energy — Dallas +1 with the largest Energy weight lifts weighted Energy above 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 |