EconomyxAI · Sector Watch November 2023Released November 29, 2023 |
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Conditions index −0.21 avg of 11 sectors, −2 to +2 |
| Outlook index −0.36 sectors with an outlook |
| Districts growing 4/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released November 29, 2023, with information collected on or before November 17, 2023. | | ■ | Economic activity slowed; four districts reported modest growth, two flat to slightly down, and six slight declines. | | ■ | Discretionary and durable goods sales declined as consumers grew more price sensitive; travel and tourism generally healthy. | | ■ | Transportation sluggish; manufacturers' outlooks weakened; business loan demand down; CRE continued to slow; outlook diminished. |
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Sector prospects Where the 3–12 month view points Strongest prospects Utilities
XLU
▶ Steady | +0.08 |
| | Communication Services
XLC
▲ Turning up | +0.02 |
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| Weakest prospects Real Estate
XLRE
▼ Weakening | −0.88 |
| Financials
XLF
▶ Steady | −0.63 |
| Consumer Discretionary
XLY
▶ Steady | −0.61 |
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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 | Utilities
XLU | | +0.08 | Neutral | +0.19 | +0.00 | ▶ +0.19 | | 2 | Energy
XLE | | +0.08 | Neutral | +0.16 | +0.00 | ▶ +0.18 | | 3 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▲ +0.20 | | 4 | Consumer Staples
XLP | | +0.02 | Neutral | +0.07 | +0.00 | ▶ +0.01 | | 5 | Information Technology
XLK | | +0.02 | Neutral | −0.07 | +0.00 | ▲ +0.30 | | 6 | Health Care
XLV | | −0.02 | Neutral | +0.00 | +0.00 | ▶ −0.06 | | 7 | Materials
XLB | | −0.23 | Leaning Unfavorable | −0.13 | −0.50 | ▶ +0.10 | | 8 | Industrials
XLI | | −0.31 | Leaning Unfavorable | −0.38 | −0.50 | ▶ +0.12 | | 9 | Consumer Discretionary
XLY | | −0.61 | Unfavorable | −0.33 | −1.00 | ▶ −0.44 | | 10 | Financials
XLF | | −0.63 | Unfavorable | −0.79 | −1.00 | ▶ −0.03 | | 11 | Real Estate
XLRE | | −0.88 | Unfavorable | −0.99 | −1.00 | ▼ −0.76 |
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 |
Activity slowed; four districts modest growth, two flat to down, six slight declines. | Labor demand continued to ease; flat to modest employment gains. | | Inflation Pressure (higher = headwind) | | +0.50 |
Price increases largely moderated though prices remained elevated. | Business loan demand decreased slightly, particularly real estate loans. | Outlook for the next six to twelve months diminished. |
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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 | · | · | · | · | · | · | · | · | · | · | · | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | −1 | −1 | +1 | −1 | −1 | · | −1 | −1 | −1 | · | −1 | −1 | | Consumer DiscretionaryXLY | · | · | −1 | −1 | +1 | · | −1 | −1 | · | −1 | −1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | −1 | +1 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | · | +1 | · | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | +1 | · | · | | Real EstateXLRE | −1 | −1 | · | −1 | −1 | −1 | −1 | −2 | −1 | −1 | −1 | −1 | | MaterialsXLB | −1 | · | · | · | · | −1 | · | · | · | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate −2 St. Louis Commercial construction slowed sharply. Why it matters: Strongest Real Estate negative. | Real Estate −1 broad−based Broad-based CRE slowed; office weak; multifamily softened. Why it matters: Real Estate negative. | Industrials −1 broad−based Boston, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis Manufacturing down; transportation sluggish. Why it matters: Industrials negative. | Industrials +1 New York, Dallas Manufacturing output rose. Why it matters: Partial offset. | Consumer Discretionary −1 Philadelphia, Cleveland, Chicago, St. Louis, Kansas City, Dallas Discretionary sales declined. Why it matters: Drags Discretionary. | Consumer Discretionary +1 Richmond Spending on nondurables and travel strong. Why it matters: Partial offset. |
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Twelve Fed districts District roundup Boston Contracting −0.5 Outlook ▶ Flat or down slightly. |
| New York Contracting −1.0 Outlook ▼ Continued to weaken. |
| Philadelphia Contracting −0.5 Outlook ▼ Continued to decline slightly. |
| Cleveland Contracting −0.5 Outlook ▶ Down slightly. |
| Richmond Growing +0.5 Outlook ▶ Grew slightly. |
| Atlanta Growing +0.5 Outlook ▶ Grew at a tepid pace. |
| Chicago Growing +0.5 Outlook ▼ Up slightly. |
| St. Louis Contracting −0.5 Outlook ▼ Slowed slightly. |
| Minneapolis Contracting −0.5 Outlook ▼ Flat to down slightly. |
| Kansas City Contracting −0.5 Outlook ▼ Declined slightly. |
| Dallas Growing +0.5 Outlook ▼ Expanded at a slower pace. |
| San Francisco Contracting −0.5 Outlook ▼ Softened slightly. |
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Where the signal is thin or split Divergences to watch | Real Estate — broad -1 with St. Louis -2 make Real Estate the weakest sector again.
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| | Consumer Discretionary — six -1 reads drag Discretionary negative as price sensitivity rises.
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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 |