EconomyxAI · Sector Watch October 2000Released November 1, 2000 · Data through October 23 |
| |
Conditions index +0.23 avg of 11 sectors, −2 to +2 |
| Outlook index −0.48 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 4/11 sectors improving |
|
|
This release in brief The read | ■ | Regional economies grew at a moderate pace with additional signs of slowing; Philadelphia, Atlanta, Cleveland, Richmond and Dallas eased. | | ■ | Retail spending softened slightly and the retail outlook grew more conservative, with Dallas retailers lowering their six-month outlook and Chicago worried about winter heating bills. | | ■ | Manufacturing was generally steady, with high-tech expanding in Atlanta, Dallas, Boston and San Francisco, while heavy trucks, steel, paper and lumber weakened. | | ■ | Housing sales and construction kept slowing in most of the country; commercial real estate stayed healthy but construction began to wane. | | ■ | The energy sector strengthened considerably, with the domestic rig count at its highest since early 1991, while loan growth softened and lenders tightened standards. |
|
Sector prospects Where the 3–12 month view points Strongest prospects | Information Technology
XLK
▶ Steady | +0.33 |
| Health Care
XLV
▶ Steady | +0.27 |
|
|
| Weakest prospects Materials
XLB
▶ Steady | −0.55 |
| Industrials
XLI
▶ Steady | −0.15 |
| Consumer Discretionary
XLY
▶ Steady | −0.10 |
|
|
|
|
All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
|---|
| 1 | Energy
XLE | | +0.77 | Favorable | +1.26 | n/a | ▶ +0.10 | | 2 | Information Technology
XLK | | +0.33 | Leaning Favorable | +0.80 | n/a | ▶ −0.03 | | 3 | Health Care
XLV | | +0.27 | Leaning Favorable | +0.29 | n/a | ▶ +0.00 | | 4 | Real Estate
XLRE | | +0.13 | Neutral | +0.39 | −0.27 | ▼ +0.03 | | 5 | Financials
XLF | | +0.05 | Neutral | +0.02 | −0.31 | ▶ +0.02 | | 6 | Utilities
XLU | | +0.05 | Neutral | +0.00 | n/a | ▶ −0.10 | | 7 | Communication Services
XLC | | −0.06 | Neutral | +0.07 | n/a | ▼ −0.33 | | 8 | Consumer Staples
XLP | | −0.08 | Neutral | +0.00 | n/a | ▶ −0.24 | | 9 | Consumer Discretionary
XLY | | −0.10 | Neutral | +0.11 | −0.28 | ▶ −0.09 | | 10 | Industrials
XLI | | −0.15 | Neutral | +0.21 | −0.53 | ▶ +0.04 | | 11 | Materials
XLB | | −0.55 | Unfavorable | −0.64 | −1.00 | ▶ −0.35 |
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 |
Growth moderate with additional signs of slowing; activity eased in Philadelphia, Atlanta, Cleveland, Richmond and Dallas, while New York and San Francisco reported solid expansion. | Labor markets stayed stretched with notable upward wage pressure in Philadelphia, San Francisco and St. Louis, though Internet shake-ups freed some high-tech workers in Dallas. | | Inflation Pressure (higher = headwind) | | +0.25 |
Petroleum-based input costs rose and Boston manufacturers passed on more, but competition limited pass-through, New York price pressures diminished and building materials fell. | Loan growth strong in most districts but softening; lending slackened in Richmond, Kansas City and Philadelphia, Dallas was slower than a year ago, and New York, Chicago and Dallas tightened standards. | The retail outlook became increasingly conservative and Dallas contacts were gloomier than in a while, though Philadelphia firms and Boston retailers stayed positive. |
|
Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
|---|
| Information TechnologyXLK | +2 | · | · | · | · | +1 | · | +1 | +1 | · | +1 | +1 | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | · | −1 | · | · | +1 | +1 | · | · | −1 | −1 | · | | Consumer DiscretionaryXLY | · | +1 | · | +1 | +1 | · | · | · | −1 | +1 | −1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | +1 | · | | IndustrialsXLI | +1 | +1 | −1 | −1 | · | · | · | +1 | +1 | +1 | −1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | +2 | · | · | · | −1 | +1 | −1 | −1 | · | · | +1 | | MaterialsXLB | · | · | −1 | −1 | · | −1 | −1 | −1 | · | · | −2 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
|
Top highlights What moved the scores Energy +2 Dallas All areas of drilling and oil service improving; rig count highest since early 1991. Why it matters: Dallas carries the largest Energy weight; a fourth straight +2. | Materials −2 Dallas Demand fell for cement, glass, paper, petrochemicals, metals and lumber. Why it matters: Dallas is a heavy Materials district; the -2 drives the sector to last. | Real Estate +2 New York Office rents 'continued to soar'; house prices 'still going through the roof'. Why it matters: New York carries large Real Estate weight, offsetting four -1s. | Information Technology +2 Boston Very strong double-digit growth in semiconductor and computer markets. Why it matters: Boston is a top IT district; the +2 adds to San Francisco's +1. | Information Technology +1 broad−based San Francisco, Dallas, Atlanta, St. Louis, Minneapolis Strong semiconductor sales; Motorola campus; high-tech belts in Louisville and St. Louis. Why it matters: Breadth makes IT the second-strongest sector. | Industrials −1 Dallas Manufacturers 'gloomier about the outlook than they have been for quite a while'. Why it matters: Dallas weakness, plus Philadelphia and Cleveland, offsets five +1s. |
|
Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Expanding moderately; signs of slowing. |
| New York Growing +1.0 Few, if any, signs of slowing. |
| Philadelphia Flat Outlook ▲ Eased in some sectors. |
| Cleveland Flat Growth has slowed recently. |
| Richmond Growing +1.0 Solid pace, less rapid. |
| Atlanta Growing +1.0 Outlook ▼ Growth continues to moderate. |
| Chicago Growing +1.0 Continued to expand moderately. |
| St. Louis Growing +1.0 Expanding moderately overall. |
| Minneapolis Growing +1.0 Grows at a moderate pace. |
| Kansas City Growing +1.0 Expanded modestly. |
| Dallas Growing +1.0 Outlook ▼ High level, slower growth. |
| San Francisco Growing +1.0 Continued solid expansion. |
|
|
Where the signal is thin or split Divergences to watch | Energy — Dallas +2 for a fourth straight release; Energy remains the clear leader.
|
| | Information Technology — six positive districts led by Boston's +2; the broadest IT reading of the year.
|
| | Materials — Dallas's -2 plus five -1s make Materials the weakest sector by far.
|
| | Real Estate — New York's heavy-weight +2 keeps weighted Real Estate above its unweighted average despite four -1s.
|
| | UTILITIES and CONSUMER STAPLES: no directional coverage this release.
|
|
|
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 |