EconomyxAI · Sector Watch October 2019Released October 16, 2019 |
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Conditions index +0.09 avg of 11 sectors, −2 to +2 |
| Outlook index +0.01 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 16, 2019, with information collected on or before October 7, 2019. | | ■ | The economy expanded at a slight to modest pace; southern and western districts were more upbeat than the Midwest and Great Plains. | | ■ | Household spending solid with robust light vehicle sales; manufacturing continued to edge lower on trade tensions and slower global growth; freight stabilized. | | ■ | Housing changed little; loan volumes rose moderately; agriculture deteriorated further; many contacts lowered outlooks for the next 6 to 12 months. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.36 |
| Information Technology
XLK
▶ Steady | +0.20 |
| Consumer Discretionary
XLY
▶ Steady | +0.15 |
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| Weakest prospects | Industrials
XLI
▶ Steady | −0.23 |
| Materials
XLB
▼ Turning down | −0.09 |
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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 | Real Estate
XLRE | | +0.36 | Leaning Favorable | +0.55 | +0.48 | ▶ +0.04 | | 2 | Information Technology
XLK | | +0.20 | Leaning Favorable | +0.06 | +0.50 | ▶ −0.09 | | 3 | Consumer Discretionary
XLY | | +0.15 | Neutral | +0.53 | +0.00 | ▶ +0.01 | | 4 | Health Care
XLV | | +0.12 | Neutral | +0.25 | +0.00 | ▶ +0.21 | | 5 | Financials
XLF | | +0.12 | Neutral | +0.43 | +0.00 | ▶ +0.21 | | 6 | Utilities
XLU | | +0.05 | Neutral | +0.13 | +0.00 | ▶ +0.02 | | 7 | Communication Services
XLC | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Materials
XLB | | −0.09 | Neutral | −0.24 | +0.00 | ▼ −0.17 | | 10 | Industrials
XLI | | −0.23 | Leaning Unfavorable | −0.22 | −0.33 | ▶ −0.07 | | 11 | Energy
XLE | | −0.37 | Leaning Unfavorable | −0.49 | −0.50 | ▶ −0.14 |
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 |
Slight to modest expansion with regional divergence. | Employment rose slightly; manufacturers cut headcount on soft orders. | | Inflation Pressure (higher = headwind) | | +0.25 |
Modest price increases; tariff costs passed through by retailers more than manufacturers. | Moderately rising loan volumes in many districts. | Expansion expected to continue but many lowered outlooks. |
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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 | · | · | · | · | · | · | · | · | +1 | · | · | +1 | | FinancialsXLF | +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 | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | −1 | −1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | +1 | −1 | · | · | +1 | +1 | +1 | · | · | · | +1 | +1 | | MaterialsXLB | · | · | · | · | · | · | −1 | · | · | · | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +2 Boston Software and IT revenues up, some strongly. Why it matters: Strongest IT read. | Energy −1 Dallas Drilling continued to erode; oilfield services weak. Why it matters: Dallas carries the largest Energy weight. | Industrials −1 Boston, Cleveland, Chicago, St. Louis, Minneapolis, Kansas City Manufacturing declined on soft orders and GM strike. Why it matters: Broad Industrials drag. | Real Estate −1 New York Housing markets softer; price declines across spectrum. Why it matters: NY carries large RE weight. | Real Estate +1 San Francisco, Dallas Residential real estate strong; home sales increased. Why it matters: Large RE weights offset NY. | Financials +1 San Francisco, Dallas, Chicago Loan demand accelerated; lending grew further. Why it matters: Financials support. |
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Twelve Fed districts District roundup Boston Contracting −0.5 Outlook ▼ Signs of slowing more widespread. |
| New York Flat Outlook ▼ Growth subdued. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Cleveland Flat Outlook ▶ Stable on balance. |
| Richmond Growing +0.5 Outlook ▲ Grew modestly. |
| Atlanta Growing +0.5 Outlook ▲ Expanded modestly. |
| Chicago Growing +0.5 Outlook ▲ Increased slightly. |
| St. Louis Growing +0.5 Outlook ▶ Improved slightly. |
| Minneapolis Growing +0.5 Outlook ▶ Grew at a slight pace. |
| Kansas City Growing +0.5 Outlook ▶ Rose slightly. |
| Dallas Growing +1.0 Outlook ▲ Moderate expansion continued. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a modest pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — Boston +2 lifts IT, but San Francisco 0 at 47% weight keeps the weighted score modest.
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| | Energy — Dallas -1 with the largest Energy weight pulls weighted Energy below the unweighted average.
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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 |