EconomyxAI · Beige Book Sector Monitor October 2017Released October 18, 2017 |
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Conditions index +0.36 avg of 11 sectors, −2 to +2 |
| Outlook index +0.29 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released October 18, 2017, with information collected on or before October 6, 2017. | | ■ | All twelve districts grew, split between modest and moderate; Richmond, Atlanta and Dallas saw major disruptions from Hurricanes Harvey and Irma. | | ■ | Manufacturing and services grew modestly to moderately; retail rose slowly while vehicle sales and tourism increased in most districts. | | ■ | Residential construction rose but low inventories constrained sales; loan demand stable to modestly higher; energy growth eased slightly; labor tight. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Discretionary
XLY
▲ Improving | +0.60 |
| Industrials
XLI
▶ Steady | +0.45 |
| Information Technology
XLK
▶ Steady | +0.44 |
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| Weakest prospects Utilities
XLU
▶ Steady | −0.02 |
| | Consumer Staples
XLP
▶ 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 | Consumer Discretionary
XLY | | +0.60 | Favorable | +0.73 | +0.56 | ▲ +0.71 | | 2 | Industrials
XLI | | +0.45 | Leaning Favorable | +1.05 | +0.56 | ▶ +0.09 | | 3 | Information Technology
XLK | | +0.44 | Leaning Favorable | +0.71 | +0.54 | ▶ +0.08 | | 4 | Financials
XLF | | +0.32 | Leaning Favorable | +0.43 | +0.50 | ▶ +0.07 | | 5 | Real Estate
XLRE | | +0.21 | Leaning Favorable | +0.51 | +0.45 | ▼ −0.56 | | 6 | Communication Services
XLC | | +0.21 | Leaning Favorable | +0.40 | +0.00 | ▲ +0.38 | | 7 | Materials
XLB | | +0.12 | Neutral | +0.09 | +0.50 | ▼ −0.27 | | 8 | Health Care
XLV | | +0.01 | Neutral | +0.00 | +0.00 | ▲ +0.04 | | 9 | Consumer Staples
XLP | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.04 | | 10 | Energy
XLE | | −0.02 | Neutral | +0.06 | +0.05 | ▶ −0.38 | | 11 | Utilities
XLU | | −0.02 | Neutral | +0.00 | +0.00 | ▶ −0.10 |
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 |
All 12 districts grew, split between modest and moderate; hurricane disruptions in the South. | Employment growth modest; labor markets widely tight. | | Inflation Pressure (higher = headwind) | | +0.50 |
Price pressures modest; transport, energy and construction materials rose faster. | Loan demand generally stable to modestly higher. | Outlooks positive; most contacts expect no lasting hurricane damage. |
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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 | +2 | · | · | · | · | · | · | · | · | · | +1 | +1 | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | · | +1 | +1 | +1 | · | +1 | +1 | · | · | · | +1 | | Consumer DiscretionaryXLY | +1 | · | +1 | · | +1 | · | +1 | · | · | · | +2 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | · | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | +1 | · | +1 | · | · | · | +1 | −1 | +1 | | MaterialsXLB | · | · | · | · | · | · | · | −1 | +1 | +1 | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +2 Dallas Robust manufacturing expansion continued despite Harvey. Why it matters: Strong Industrials read. | Consumer Discretionary +2 Dallas Auto sales surged on replacement demand after the storm. Why it matters: Strong Discretionary read. | Information Technology +2 Boston Software and IT services firms reported strong results. Why it matters: Adds to IT strength. | Information Technology +1 San Francisco Consumer and business services grew at a strong pace. Why it matters: SF carries 47% of IT weight. | Industrials +1 broad−based Broad-based Manufacturing grew modestly to moderately. Why it matters: Industrials positive in eleven districts. | Real Estate −1 Dallas Home sales weakened during the reporting period. Why it matters: Real Estate offset. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Modest to moderate expansion. |
| New York Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Cleveland Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Richmond Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| Atlanta Growing +0.5 Outlook ▲ Improving at a modest pace. |
| Chicago Growing +0.5 Outlook ▲ Continued at a modest rate. |
| St. Louis Growing +0.5 Outlook ▲ Improve at a modest pace. |
| Minneapolis Growing +0.5 Outlook ▲ Grew modestly. |
| Kansas City Growing +0.5 Outlook ▲ Increased at a modest pace. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Dallas +2 and broad +1 reads lift the weighted score above the unweighted average.
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| | Real Estate — Dallas -1 trims an otherwise mildly positive Real Estate reading.
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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 |