EconomyxAI · Sector Watch September 2001Released September 19, 2001 |
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Conditions index −0.17 avg of 11 sectors, −2 to +2 |
| Outlook index −0.15 sectors with an outlook |
| Districts growing 1/12 per National Summary |
| Positive momentum 9/11 sectors improving |
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This release in brief The read | ■ | Released September 19, 2001, cover dated September 2001, based on information collected before September 10, so it predates the attacks. | | ■ | Activity remained sluggish in August and early September, with several districts reporting further slowing; consumer spending flat to down despite back-to-school sales. | | ■ | Manufacturing stayed weak nearly everywhere, but Boston, New York, Chicago and Kansas City saw declines stabilizing and Richmond expanded for the first time in a year. | | ■ | Residential real estate was brisk on low mortgage rates while commercial space softened further. | | ■ | Household lending held up while business lending stayed soft and a third of districts tightened standards; Boston contacts called the outlook 'bleak'. |
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Sector prospects Where the 3–12 month view points Strongest prospects Health Care
XLV
▶ Steady | +0.18 |
| Utilities
XLU
▶ Steady | +0.16 |
| Consumer Staples
XLP
▶ Steady | +0.04 |
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| Weakest prospects Consumer Discretionary
XLY
▶ Steady | −0.34 |
| Financials
XLF
▶ Steady | −0.34 |
| Industrials
XLI
▲ Turning up | −0.22 |
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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 | Health Care
XLV | | +0.18 | Leaning Favorable | +0.29 | n/a | ▶ +0.15 | | 2 | Utilities
XLU | | +0.16 | Leaning Favorable | +0.13 | n/a | ▶ +0.13 | | 3 | Consumer Staples
XLP | | +0.04 | Neutral | +0.07 | n/a | ▶ +0.01 | | 4 | Information Technology
XLK | | −0.01 | Neutral | −0.21 | +0.00 | ▲ +0.82 | | 5 | Communication Services
XLC | | −0.07 | Neutral | −0.07 | n/a | ▶ +0.17 | | 6 | Real Estate
XLRE | | −0.20 | Leaning Unfavorable | −0.11 | −0.44 | ▲ +0.23 | | 7 | Materials
XLB | | −0.21 | Leaning Unfavorable | −0.47 | −0.50 | ▲ +0.29 | | 8 | Energy
XLE | | −0.21 | Leaning Unfavorable | +0.10 | +0.50 | ▲ −0.47 | | 9 | Industrials
XLI | | −0.22 | Leaning Unfavorable | −0.58 | −0.25 | ▲ +0.40 | | 10 | Financials
XLF | | −0.34 | Leaning Unfavorable | −0.54 | +0.03 | ▶ −0.34 | | 11 | Consumer Discretionary
XLY | | −0.34 | Leaning Unfavorable | −0.46 | −0.36 | ▶ +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 | | −0.25 |
Activity remained sluggish with several districts reporting further slowing; manufacturing weak nearly everywhere though showing signs of stabilizing in four districts. | Labor markets eased in most of the country; employers curtailing college recruiting, though reports of layoffs became less frequent in Chicago. | | Inflation Pressure (higher = headwind) | | −0.50 |
Upward price pressures restrained in nearly all districts; input costs easing; Chicago and Dallas saw more price decreases than increases. | Household lending robust on low mortgage rates, but business demand soft, business loan quality deteriorating in a third of districts and standards tightened. | Boston contacts' consensus is 'bleak' with no improvement until next year; merchants in over half the districts expect flat or moderate sales; Philadelphia manufacturers still expect gains. |
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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 | −1 | −1 | · | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | −1 | +1 | · | −1 | · | · | −1 | · | · | −1 | −1 | | Consumer DiscretionaryXLY | −1 | · | · | · | −1 | · | −1 | −1 | +1 | · | · | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | −1 | · | | IndustrialsXLI | −1 | · | −1 | −1 | +1 | −1 | · | −1 | −1 | · | −1 | −1 | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | · | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | −1 | · | · | · | · | · | · | +1 | +1 | · | −1 | · | | MaterialsXLB | · | · | −1 | −1 | · | −1 | +1 | · | · | · | −1 | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +1 Richmond Manufacturing showed nascent signs of expansion after almost a year of general decline. Why it matters: The first positive Industrials read of 2001. | Information Technology 0 San Francisco Sales of high-tech equipment were slow but may have bottomed out. Why it matters: San Francisco's 47% weight lifts weighted IT from deeply negative to near flat. | Industrials −1 broad−based Eight districts Virtually all regions reported that new orders and production were weak. Why it matters: Keeps Industrials negative despite stabilization. | Materials +1 Chicago Steel improving; wallboard producer pushed through significant price increases. Why it matters: First positive Materials read in months. | Consumer Discretionary −1 Boston, Richmond, Chicago, St. Louis, San Francisco Consumer spending generally flat to down; retail outlook 'grim'. Why it matters: San Francisco's weight keeps Discretionary negative. | Financials −1 New York 21 percent of banks report rising home mortgage delinquencies, the highest since 1997. Why it matters: New York is 28% of Financials. |
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Twelve Fed districts District roundup Boston Contracting −1.0 Outlook ▼ Continues to be slow; 'bleak' outlook. |
| New York Contracting −1.0 Outlook ▼ Further signs of weakening. |
| Philadelphia Flat Outlook ▶ Remained subdued in August. |
| Cleveland Flat Outlook ▶ Manufacturing weak; spending up slightly. |
| Richmond Growing +1.0 Outlook ▶ Advanced at a modest pace. |
| Atlanta Flat Outlook ▼ Sluggish growth in late summer. |
| Chicago Flat Remained sluggish. |
| St. Louis Flat Outlook ▶ Continued to slow. |
| Minneapolis Flat Outlook ▲ About even with last report. |
| Kansas City Flat Outlook ▶ Fewer signs of slowing. |
| Dallas Contracting −1.0 Outlook ▼ Continued to weaken. |
| San Francisco Flat Outlook ▼ Additional slowing in growth. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco moves to 0, so weighted IT improves sharply even with five negative districts elsewhere.
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| | Industrials — first release in 2001 with a positive district (Richmond) and three at 0.
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| | Energy — Dallas at 0 and only Kansas City positive; Energy has lost its lead.
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| | This release reflects conditions before September 11, 2001.
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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 |