EconomyxAI · Sector Watch October 2024Released October 23, 2024 |
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Conditions index −0.14 avg of 11 sectors, −2 to +2 |
| Outlook index +0.09 sectors with an outlook |
| Districts growing 3/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released October 23, 2024, with information collected on or before October 11, 2024. | | ■ | Economic activity little changed in nearly all districts; two reported modest growth. | | ■ | Most districts reported declining manufacturing; consumer spending mixed with shifts to cheaper alternatives; banking steady to up slightly. | | ■ | Housing generally held up as inventory expanded; CRE flat with data center strength; contacts more optimistic about the longer-term outlook. |
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Sector prospects Where the 3–12 month view points Strongest prospects Financials
XLF
▲ Turning up | +0.47 |
| Real Estate
XLRE
▲ Improving | +0.31 |
| Health Care
XLV
▶ Steady | +0.06 |
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| Weakest prospects Energy
XLE
▼ Turning down | −0.33 |
| Industrials
XLI
▼ Turning down | −0.27 |
| Consumer Discretionary
XLY
▲ Turning up | −0.10 |
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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 | Financials
XLF | | +0.47 | Leaning Favorable | +0.41 | +0.50 | ▲ +0.65 | | 2 | Real Estate
XLRE | | +0.31 | Leaning Favorable | −0.09 | +0.50 | ▲ +0.49 | | 3 | Health Care
XLV | | +0.06 | Neutral | +0.12 | +0.00 | ▶ +0.12 | | 4 | Communication Services
XLC | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 5 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 6 | Information Technology
XLK | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.09 | | 7 | Utilities
XLU | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.07 | | 8 | Materials
XLB | | −0.09 | Neutral | −0.41 | +0.00 | ▶ +0.01 | | 9 | Consumer Discretionary
XLY | | −0.10 | Neutral | −0.33 | +0.00 | ▲ +0.07 | | 10 | Industrials
XLI | | −0.27 | Leaning Unfavorable | −0.79 | +0.00 | ▼ −0.28 | | 11 | Energy
XLE | | −0.33 | Leaning Unfavorable | −0.49 | +0.00 | ▼ −0.95 |
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 | | +0.00 |
Activity little changed in nearly all districts; two reported modest growth. | Employment increased slightly; hiring mostly for replacement. | | Inflation Pressure (higher = headwind) | | +0.25 |
Inflation continued to moderate; selling prices up slightly or modestly. | Banking steady to up slightly; outlook improved on lower rates. | Contacts somewhat more optimistic about the longer-term outlook. |
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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 | · | · | · | · | · | · | · | · | · | · | · | · | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | −1 | +1 | | FinancialsXLF | · | +1 | −1 | · | +1 | +1 | +1 | +1 | · | · | −1 | · | | Consumer DiscretionaryXLY | · | +1 | −1 | −1 | +1 | −1 | +1 | −1 | · | +1 | −1 | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | −1 | · | −1 | −1 | +1 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | −1 | −1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | · | · | +1 | · | −1 | · | +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 −1 broad−based Broad-based Most districts reported declining manufacturing. Why it matters: Industrials negative. | Industrials +1 Richmond Manufacturing expanded; port activity rose. Why it matters: Partial offset. | Financials +1 New York, Richmond, Atlanta, Chicago, St. Louis Banking activity increased; loan demand edged up. Why it matters: Financials positive. | Financials −1 Dallas, Philadelphia Finance activity flat to down; C&I loans fell. Why it matters: Partial offset. | Consumer Discretionary +1 New York, Richmond, Chicago, Kansas City Consumer spending picked up. Why it matters: Supports Discretionary. | Consumer Discretionary −1 Philadelphia, Cleveland, Atlanta, St. Louis, Dallas, San Francisco Consumer spending fell; trading down. Why it matters: Drags Discretionary. |
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Twelve Fed districts District roundup Boston Flat Outlook ▲ Roughly flat. |
| New York Flat Outlook ▲ Little changed. |
| Philadelphia Contracting −0.5 Outlook ▲ Continued to decline slightly. |
| Cleveland Flat Outlook ▲ Stable. |
| Richmond Growing +0.5 Outlook ▶ Grew modestly. |
| Atlanta Contracting −0.5 Outlook ▶ Declined slightly. |
| Chicago Growing +0.5 Outlook ▶ Increased slightly. |
| St. Louis Flat Outlook ▶ Unchanged. |
| Minneapolis Contracting −0.5 Outlook ▲ Slightly down. |
| Kansas City Flat Outlook ▶ Held steady. |
| Dallas Growing +0.5 Outlook ▶ Expanded modestly. |
| San Francisco Flat Outlook ▲ Remained stable. |
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Where the signal is thin or split Divergences to watch | Financials — five +1 reads turn Financials positive for the first time since 2022 as rates fall.
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| | Industrials — near-universal -1 manufacturing reads keep Industrials the weakest sector.
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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 |