EconomyxAI · Sector Watch November 2022Released November 30, 2022 |
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Conditions index −0.18 avg of 11 sectors, −2 to +2 |
| Outlook index −0.25 sectors with an outlook |
| Districts growing 5/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released November 30, 2022, with information collected on or before November 18, 2022. | | ■ | National activity flat or up slightly; five districts reported slight or modest gains, the rest flat or declining. | | ■ | Nonauto consumer spending eked out slight gains; travel and tourism rose moderately; manufacturing up slightly on average. | | ■ | Home sales declined moderately and residential construction slid; bank lending declined modestly; prices rose at a slowing pace. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Communication Services
XLC
▶ Steady | +0.01 |
| Health Care
XLV
▶ Steady | −0.00 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.88 |
| Information Technology
XLK
▼ Weakening | −0.61 |
| Financials
XLF
▶ Steady | −0.51 |
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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 | Energy
XLE | | +0.43 | Leaning Favorable | +0.59 | +0.72 | ▶ −0.09 | | 2 | Communication Services
XLC | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.15 | | 3 | Health Care
XLV | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.04 | | 4 | Utilities
XLU | | −0.04 | Neutral | +0.00 | +0.00 | ▶ −0.13 | | 5 | Consumer Staples
XLP | | −0.06 | Neutral | +0.00 | +0.00 | ▶ −0.24 | | 6 | Consumer Discretionary
XLY | | −0.07 | Neutral | +0.30 | −0.50 | ▶ +0.40 | | 7 | Industrials
XLI | | −0.21 | Leaning Unfavorable | +0.07 | −0.50 | ▶ +0.03 | | 8 | Materials
XLB | | −0.28 | Leaning Unfavorable | −0.20 | −0.50 | ▶ +0.03 | | 9 | Financials
XLF | | −0.51 | Unfavorable | −0.74 | −0.50 | ▶ −0.38 | | 10 | Information Technology
XLK | | −0.61 | Unfavorable | −0.66 | −0.50 | ▼ −0.91 | | 11 | Real Estate
XLRE | | −0.88 | Unfavorable | −1.38 | −1.00 | ▶ −0.27 |
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 | | +0.00 |
Activity flat or up slightly; five districts up slightly or modestly, rest flat or down. | Employment grew modestly, labor demand weakening; layoffs in tech, finance and real estate. | | Inflation Pressure (higher = headwind) | | +1.00 |
Prices rose moderately to strongly but at a slowing pace; lumber and steel fell. | Bank lending saw modest further declines. | Outlooks pessimistic amid weakening demand expectations. |
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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 | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | −1 | −1 | +1 | −1 | −1 | +1 | −1 | −1 | −1 | −1 | −1 | −1 | | Consumer DiscretionaryXLY | +1 | · | −1 | −1 | +1 | +1 | · | · | +1 | · | −1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | +1 | · | · | −1 | · | +1 | +1 | · | −1 | +1 | −1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | −1 | · | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | −1 | −1 | −2 | −2 | −2 | −1 | −1 | −1 | −2 | −2 | −1 | | MaterialsXLB | · | · | · | · | −1 | · | · | · | · | · | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate −2 Cleveland, Richmond, Atlanta, Kansas City, Dallas Home sales dropped sharply; homebuilder sales worst since 2008. Why it matters: Strongest negatives in the matrix. | Real Estate −1 broad−based Broad-based Residential construction slid; office vacancies rose. Why it matters: Real Estate negative everywhere. | Information Technology −1 San Francisco, Dallas Tech layoffs reported. Why it matters: SF carries the largest IT weight. | Financials −1 broad−based Broad-based Bank lending saw modest further declines. Why it matters: Financials negative. | Energy +1 Dallas, Atlanta, Kansas City Energy activity up slightly; oil production rose. Why it matters: Dallas carries the largest Energy weight. | Consumer Discretionary +1 San Francisco, Minneapolis, Richmond, Atlanta Retail robust; hospitality strong. Why it matters: Supports Discretionary. |
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Twelve Fed districts District roundup Boston Flat Outlook ▼ Softened slightly. |
| New York Contracting −1.0 Outlook ▼ Declined modestly. |
| Philadelphia Flat Outlook ▼ Held steady. |
| Cleveland Contracting −0.5 Outlook ▼ Slowed slightly. |
| Richmond Growing +0.5 Outlook ▼ Expanded slightly. |
| Atlanta Growing +0.5 Outlook ▶ Tepid growth. |
| Chicago Flat Outlook ▼ Little changed. |
| St. Louis Flat Outlook ▼ Unchanged. |
| Minneapolis Growing +0.5 Outlook ▼ Grew modestly. |
| Kansas City Contracting −0.5 Outlook ▼ Declined slightly. |
| Dallas Growing +0.5 Outlook ▼ Modest growth. |
| San Francisco Growing +0.5 Outlook ▼ Expanded modestly. |
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Where the signal is thin or split Divergences to watch | Real Estate — five -2 reads in large-weight districts make Real Estate the weakest sector again.
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| | Information Technology — SF tech layoffs (-1) weigh heavily given SF's large IT weight.
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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 |