EconomyxAI · Sector Watch September 2000Released September 20, 2000 · Data through September 11 |
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Conditions index +0.39 avg of 11 sectors, −2 to +2 |
| Outlook index −0.09 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Activity expanded at a moderate pace, with Richmond picking up and Atlanta, Chicago, St. Louis and Minneapolis softening. | | ■ | Consumer spending was flat to modestly higher in August, with weak apparel offset by strong back-to-school sales in New York, Richmond, Chicago and Kansas City; auto sales slowed in five districts. | | ■ | Manufacturing generally grew, with light vehicles, aircraft and industrial machinery strong while heavy trucks fell and tire recalls shut some assembly plants. | | ■ | Home sales and construction kept softening, but commercial real estate stayed robust and Manhattan office space stayed at historic lows. | | ■ | Overall loan demand stayed strong as business lending offset weak mortgages, and oil field and mining activity grew rapidly, with the U.S. rig count above 1,000. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Real Estate
XLRE
▲ Turning up | +0.59 |
| Information Technology
XLK
▲ Turning up | +0.54 |
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| Weakest prospects Materials
XLB
▼ Weakening | −0.34 |
| Industrials
XLI
▶ Steady | +0.00 |
| Consumer Staples
XLP
▶ Steady | +0.03 |
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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 | | +0.82 | Favorable | +1.26 | n/a | ▶ +0.17 | | 2 | Real Estate
XLRE | | +0.59 | Favorable | +0.65 | +0.06 | ▲ +0.39 | | 3 | Information Technology
XLK | | +0.54 | Favorable | +1.01 | −0.50 | ▲ +0.30 | | 4 | Health Care
XLV | | +0.31 | Leaning Favorable | +0.29 | n/a | ▶ +0.10 | | 5 | Consumer Discretionary
XLY | | +0.26 | Leaning Favorable | +0.34 | +0.48 | ▲ +0.15 | | 6 | Utilities
XLU | | +0.24 | Leaning Favorable | +0.21 | n/a | ▶ +0.21 | | 7 | Communication Services
XLC | | +0.23 | Leaning Favorable | +0.40 | n/a | ▶ +0.00 | | 8 | Financials
XLF | | +0.19 | Leaning Favorable | +0.20 | +0.00 | ▲ +0.40 | | 9 | Consumer Staples
XLP | | +0.03 | Neutral | +0.12 | n/a | ▶ −0.04 | | 10 | Industrials
XLI | | +0.00 | Neutral | +0.20 | −0.08 | ▶ −0.21 | | 11 | Materials
XLB | | −0.34 | Leaning Unfavorable | −0.43 | −0.50 | ▼ −0.54 |
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 |
Activity expanded moderately with most districts calling conditions strong; Richmond picked up while Atlanta, Chicago, St. Louis and Minneapolis softened. | Labor markets stayed tight in most districts with widespread wage increases, but Boston and Kansas City saw some easing as dot-com layoffs freed workers. | | Inflation Pressure (higher = headwind) | | +0.50 |
Few signs of pass-through, but input cost increases became more widespread for paper, transport and energy, and several districts said health and energy costs might eventually reach consumers; metals and lumber fell. | Overall lending strong as business demand offset weak mortgages; Richmond and Chicago saw refinancing pick up, but New York demand fell for all loan types and several districts tightened standards. | Retail expectations through year-end upbeat, Philadelphia expects business to keep moving up and Richmond services were more upbeat, while Cleveland truck makers expect 20% production cuts. |
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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 | · | · | · | · | · | · | · | · | · | · | +2 | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | −1 | · | · | +1 | +1 | +1 | · | · | +1 | +1 | +1 | | Consumer DiscretionaryXLY | · | · | · | · | +1 | · | · | · | −1 | +1 | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | · | +1 | +1 | −1 | +1 | · | · | −1 | −1 | · | · | +1 | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | +1 | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | +1 | | Real EstateXLRE | +1 | +1 | · | · | +1 | · | · | −1 | −1 | −1 | +2 | +1 | | MaterialsXLB | · | · | · | −1 | · | −1 | −1 | · | +1 | · | · | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +2 San Francisco Service providers 'noted an acceleration in growth above an already rapid trend'. Why it matters: San Francisco is about 47% of IT; a +2 here is the largest single swing this release. | Energy +2 Dallas Drilling 'continued to increase rapidly', the U.S. rig count surging over 1,000. Why it matters: Dallas carries the largest Energy weight; a third straight +2. | Financials −1 New York Demand for all types of loans fell; standards tightened on C&I loans. Why it matters: New York is about 28% of Financials, offsetting several +1s. | Energy +1 Kansas City, Minneapolis, San Francisco District rig count highest since 1993; petroleum at near capacity. Why it matters: Broadens the Energy strength. | Real Estate +2 Dallas Construction of all types 'up significantly'; fears of overbuilding have vanished. Why it matters: The only +2 in Real Estate, offsetting three Midwest -1s. | Real Estate +1 New York Office rents up at more than a 40% annualized rate; availability near historic lows. Why it matters: New York carries large Real Estate weight. |
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Twelve Fed districts District roundup Boston Growing +1.0 Remains strong despite scattered slowing. |
| New York Growing +1.0 Continued at a moderately brisk pace. |
| Philadelphia Growing +1.0 Outlook ▲ Moving up slowly. |
| Cleveland Growing +1.0 Little change; growth moderate. |
| Richmond Growing +2.0 Outlook ▲ Expanded at a quicker pace. |
| Atlanta Growing +1.0 Growth has continued to ease. |
| Chicago Growing +1.0 Expansion continued to slow. |
| St. Louis Growing +1.0 Outlook ▲ Some moderation in the pace. |
| Minneapolis Flat Shows signs of slowing. |
| Kansas City Growing +1.0 Remained solid overall. |
| Dallas Growing +1.0 Remained fairly strong. |
| San Francisco Growing +1.0 Overall solid performance. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco's +2 drives weighted IT far above its unweighted average, since only Boston also scores positive.
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| | Energy — Dallas +2 for a third straight release with three +1s; the strongest Energy reading in the series.
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| | Real Estate — Dallas +2 against three -1s; weighting by the larger New York and San Francisco +1s keeps the sector positive.
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| | Financials — six +1s, but New York's heavy-weight -1 pulls the weighted score below the unweighted average.
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| | Utilities — only San Francisco's demand read; COMMUNICATION SERVICES also only San Francisco.
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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 |