EconomyxAI · Beige Book Sector Monitor October 2003Released October 15, 2003 |
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Conditions index +0.29 avg of 11 sectors, −2 to +2 |
| Outlook index +0.03 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 October 15, 2003, with information collected before October 7, 2003. | | ■ | The pace of expansion picked up; ten districts reported expanding activity and Boston and Cleveland reported mixed but steady conditions. | | ■ | Retail sales strengthened, helped in part by federal tax rebates, while auto sales pulled back in most districts; retailers were cautiously optimistic about the holidays. | | ■ | Most districts reported stronger manufacturing across many industries, and business services, tourism and commercial lending improved, though refinancing dropped off sharply. | | ■ | Labor markets stayed slack with signs of a pickup in five districts; finished goods prices were stable while lumber, plywood, steel, cattle and natural gas prices rose sharply. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▶ Steady | +0.37 |
| Materials
XLB
▲ Improving | +0.36 |
| Consumer Discretionary
XLY
▲ Improving | +0.32 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.01 |
| Consumer Staples
XLP
▶ Steady | −0.01 |
| Utilities
XLU
▶ Steady | +0.00 |
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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 | | +0.37 | Leaning Favorable | +0.54 | +0.19 | ▶ +0.47 | | 2 | Materials
XLB | | +0.36 | Leaning Favorable | +0.32 | +0.00 | ▲ +0.77 | | 3 | Consumer Discretionary
XLY | | +0.32 | Leaning Favorable | +0.47 | +0.20 | ▲ +0.55 | | 4 | Communication Services
XLC | | +0.31 | Leaning Favorable | +0.40 | +0.00 | ▲ +0.80 | | 5 | Information Technology
XLK | | +0.29 | Leaning Favorable | +0.57 | +0.10 | ▶ +0.30 | | 6 | Financials
XLF | | +0.25 | Leaning Favorable | +0.52 | +0.00 | ▶ −0.03 | | 7 | Health Care
XLV | | +0.04 | Neutral | +0.07 | +0.00 | ▶ −0.14 | | 8 | Energy
XLE | | +0.03 | Neutral | +0.10 | +0.00 | ▶ −0.34 | | 9 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Consumer Staples
XLP | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Real Estate
XLRE | | −0.01 | Neutral | +0.23 | −0.11 | ▶ +0.00 |
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 | | +0.75 |
Pace of expansion picked up; ten of twelve districts expanding and two mixed but steady. | Labor markets slack but modest signs of improvement in New York, Richmond, Chicago, Minneapolis, Dallas and Kansas City. | | Inflation Pressure (higher = headwind) | | +0.25 |
Finished goods prices stable; sharp increases in lumber, plywood, steel, cattle and natural gas; oil retreated. | Commercial loan demand strengthened in seven districts and credit quality good, offset by steep declines in refinancing. | Retailers in most districts cautiously optimistic about modest holiday gains; Boston insurers optimistic. |
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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 | | Health CareXLV | · | · | +1 | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | +1 | +1 | · | · | · | · | +1 | · | · | · | +1 | | Consumer DiscretionaryXLY | · | +1 | +1 | · | · | · | · | +1 | +1 | · | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | −1 | +1 | +1 | · | −1 | · | +1 | +1 | +1 | +2 | · | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | · | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +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 Kansas City Manufacturing activity increased considerably. Why it matters: Largest Industrials magnitude. | Industrials +1 broad−based Broad-based Manufacturing expanded in six more districts. Why it matters: Broad Industrials strength. | Information Technology +1 San Francisco Semiconductor demand picked up; fabs at high utilization. Why it matters: SF dominates IT. | Information Technology +1 Dallas High-tech production and orders grew at a good pace. Why it matters: Reinforces IT. | Financials +1 New York Securities industry brisk gains; employment up. Why it matters: Largest Financials weight. | Consumer Discretionary +1 New York, San Francisco Sales ahead of plan; tourism improved. Why it matters: Large Discretionary weights. |
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Twelve Fed districts District roundup Boston Contracting −0.5 Outlook ▶ Largely stagnant. |
| New York Growing +1.0 Outlook ▲ Further signs of strengthening. |
| Philadelphia Growing +0.5 Outlook ▲ Improved slightly. |
| Cleveland Flat Outlook ▲ Remained mixed. |
| Richmond Flat Outlook ▶ Advanced at a modest pace. |
| Atlanta Growing +0.5 Outlook ▲ Continued to expand. |
| Chicago Growing +0.5 Outlook ▲ Signs of modest improvement. |
| St. Louis Growing +0.5 Outlook ▲ Modest signs of improvement. |
| Minneapolis Growing +0.5 Outlook ▲ Increased. |
| Kansas City Growing +1.0 Outlook ▲ Continued to expand. |
| Dallas Growing +0.5 Outlook ▲ Slowly improving. |
| San Francisco Growing +0.5 Outlook ▲ Some further pickup. |
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Where the signal is thin or split Divergences to watch | Industrials — broad positives with a Kansas City +2 make Industrials the strongest sector; Boston and Richmond negatives carry modest weight.
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| | Communication Services — San Francisco media services pickup is the only read; thin coverage.
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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 |