EconomyxAI · Sector Watch October 2021Released October 20, 2021 |
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Conditions index +0.48 avg of 11 sectors, −2 to +2 |
| Outlook index +0.20 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 20, 2021, with information collected on or before October 8, 2021. | | ■ | Economic activity grew at a modest to moderate rate; several districts said growth slowed on supply disruptions, labor shortages and Delta. | | ■ | Consumer spending grew in most districts but auto sales declined on low inventories; manufacturing grew moderately to robustly. | | ■ | Loan demand flat to modest; residential real estate unchanged or slower but healthy; prices significantly elevated. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▲ Turning up | +0.66 |
| Real Estate
XLRE
▲ Turning up | +0.53 |
| Industrials
XLI
▶ Steady | +0.49 |
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| Weakest prospects Consumer Discretionary
XLY
▶ Steady | −0.10 |
| Communication Services
XLC
▶ Steady | −0.01 |
| Utilities
XLU
▶ Steady | +0.05 |
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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 | Energy
XLE | | +0.66 | Favorable | +0.94 | +0.72 | ▲ +0.27 | | 2 | Real Estate
XLRE | | +0.53 | Favorable | +0.96 | +0.50 | ▲ +0.27 | | 3 | Industrials
XLI | | +0.49 | Leaning Favorable | +1.36 | +0.50 | ▶ +0.07 | | 4 | Materials
XLB | | +0.31 | Leaning Favorable | +0.41 | +0.00 | ▶ +0.35 | | 5 | Information Technology
XLK | | +0.24 | Leaning Favorable | +0.19 | +0.50 | ▶ −0.11 | | 6 | Consumer Staples
XLP | | +0.14 | Neutral | +0.33 | +0.00 | ▶ +0.28 | | 7 | Financials
XLF | | +0.09 | Neutral | +0.41 | +0.00 | ▶ −0.21 | | 8 | Health Care
XLV | | +0.09 | Neutral | +0.25 | +0.00 | ▶ +0.08 | | 9 | Utilities
XLU | | +0.05 | Neutral | +0.13 | +0.00 | ▶ +0.07 | | 10 | Communication Services
XLC | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.09 | | 11 | Consumer Discretionary
XLY | | −0.10 | Neutral | +0.28 | +0.00 | ▶ −0.39 |
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 modest to moderate in most districts; several said growth slowed. | Employment rose modestly to moderately; robust wage growth amid low labor supply. | | Inflation Pressure (higher = headwind) | | +1.75 |
Most districts reported significantly elevated prices. | Loan demand generally flat to modest. | Outlooks positive but more cautious, with increased uncertainty. |
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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 | · | · | · | · | · | · | +1 | · | | Health CareXLV | · | · | · | · | · | · | · | +1 | · | · | · | +1 | | FinancialsXLF | · | · | · | +1 | +1 | +1 | · | −1 | · | +1 | +1 | +1 | | Consumer DiscretionaryXLY | · | −1 | −1 | +1 | +1 | · | · | · | · | +1 | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +2 | +1 | +2 | +1 | +1 | +1 | +2 | +2 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | +1 | · | · | · | · | +1 | | EnergyXLE | · | · | · | · | · | −1 | · | · | · | +1 | +2 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | +1 | +1 | +1 | · | +1 | −1 | +1 | · | +2 | | MaterialsXLB | · | · | · | +1 | · | +1 | +1 | · | · | −1 | · | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy +2 Dallas Elevated growth continued in the oil and gas sector. Why it matters: Dallas carries the largest Energy weight. | Industrials +2 Cleveland, Chicago, Kansas City, Dallas Manufacturing demand grew strongly with growing backlogs. Why it matters: Strongest Industrials reads. | Real Estate +2 San Francisco Residential real estate expanded at a brisk pace. Why it matters: SF carries large Real Estate weight. | Industrials +1 broad−based Broad-based Manufacturing grew moderately to robustly. Why it matters: Broad Industrials support. | Consumer Discretionary −1 New York, Philadelphia Retail steady to lower; tourism declined. Why it matters: Large Discretionary weights. | Information Technology +1 Boston, Cleveland, Dallas Software revenue gains; robust tech demand. Why it matters: Supports IT. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Expanded at a modest to moderate pace. |
| New York Growing +0.5 Outlook ▲ Growth slowed to a modest pace. |
| Philadelphia Growing +0.5 Outlook ▲ Grew modestly, slower than before. |
| Cleveland Growing +1.5 Outlook ▲ Economic activity remained strong. |
| Richmond Growing +0.5 Outlook ▲ Increased at a modest rate. |
| Atlanta Growing +1.0 Outlook ▲ Expanded moderately. |
| Chicago Growing +0.5 Outlook ▲ Increased modestly. |
| St. Louis Growing +1.0 Outlook ▲ Improved at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| Dallas Growing +1.5 Outlook ▲ Expanded at a solid rate. |
| San Francisco Growing +1.0 Outlook ▲ Strengthened moderately. |
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Where the signal is thin or split Divergences to watch | Energy — Dallas +2 with the largest Energy weight lifts the weighted score well above the unweighted average.
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| | Real Estate — San Francisco +2 keeps the weighted score above the unweighted average despite Minneapolis softening.
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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 |