EconomyxAI · Sector Watch April 2007Released April 25, 2007 |
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Conditions index +0.19 avg of 11 sectors, −2 to +2 |
| Outlook index +0.09 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 4/11 sectors improving |
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This release in brief The read | ■ | Released April 25, 2007, with information collected before mid-April 2007 (date not printed in the PDF). | | ■ | Most districts noted only modest or moderate expansion; New York reported steady growth, Minneapolis firm growth and Dallas moderately strong growth. | | ■ | Retail sales were generally positive with help from an early Easter, vehicle sales were mixed, and tourism and business services kept growing. | | ■ | Manufacturing was slow overall with weakening among residential-construction suppliers and autos, residential real estate kept weakening, and commercial real estate and construction stayed active. | | ■ | Labor markets stayed tight for skilled occupations with modest wage gains; consumer prices were stable but most districts reported rising input and energy prices. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Discretionary
XLY
▲ Turning up | +0.48 |
| | Health Care
XLV
▶ Steady | +0.28 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.26 |
| Information Technology
XLK
▼ Turning down | −0.08 |
| Utilities
XLU
▶ Steady | +0.00 |
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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 | Consumer Discretionary
XLY | | +0.48 | Leaning Favorable | +0.81 | +0.50 | ▲ +0.32 | | 2 | Energy
XLE | | +0.37 | Leaning Favorable | +0.67 | +0.50 | ▶ −0.12 | | 3 | Health Care
XLV | | +0.28 | Leaning Favorable | +0.35 | +0.50 | ▶ −0.07 | | 4 | Materials
XLB | | +0.18 | Leaning Favorable | +0.07 | +0.00 | ▶ +0.23 | | 5 | Industrials
XLI | | +0.15 | Leaning Favorable | +0.25 | +0.00 | ▶ +0.06 | | 6 | Financials
XLF | | +0.05 | Neutral | +0.04 | +0.00 | ▶ +0.06 | | 7 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Consumer Staples
XLP | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Information Technology
XLK | | −0.08 | Neutral | +0.00 | +0.00 | ▼ −0.48 | | 11 | Real Estate
XLRE | | −0.26 | Leaning Unfavorable | −0.10 | −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 | | +0.50 |
Modest or moderate expansion in most districts; New York steady, Minneapolis firm, Dallas moderately strong. | Tight labor markets especially for skilled occupations; hiring up in four districts; overall wage increases modest. | | Inflation Pressure (higher = headwind) | | −0.50 |
Consumer prices stable, but input prices rising for metals, raw materials and energy; some manufacturers raising output prices. | C&I demand rising offsets flat or slowing mortgage demand; scattered delinquency increases; slightly tighter mortgage standards. | Capital spending plans up in six districts; Cleveland and Kansas City retailers upbeat; Boston, Philadelphia and Dallas cautious. |
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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 | · | · | · | · | +1 | | FinancialsXLF | · | −1 | +1 | · | −1 | · | +1 | · | · | · | +1 | +1 | | Consumer DiscretionaryXLY | · | +1 | +1 | +1 | · | +1 | · | +1 | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | · | · | +1 | −1 | · | +1 | −1 | +1 | · | +1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | · | −1 | · | −1 | · | · | · | −1 | · | | MaterialsXLB | · | · | · | +1 | · | · | · | · | · | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Consumer Discretionary +1 New York, Kansas City, Dallas Sales ahead of plan; spending rebounded. Why it matters: Broad Discretionary support. | Financials −1 New York Weaker demand for all loan types. Why it matters: Largest Financials weight. | Real Estate +1 New York Manhattan vacancies lowest since 2001; rents up 20-30%. Why it matters: Real Estate support. | Real Estate −1 Richmond, Chicago, Dallas Home sales weaker; cancellations up sharply. Why it matters: Real Estate drag. | Industrials +1 Cleveland, Chicago, Dallas, Minneapolis Manufacturing firmed; aircraft and energy demand solid. Why it matters: Industrials support. | Industrials −1 Richmond, St. Louis Manufacturing continued to drift lower. Why it matters: Industrials drag. |
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Twelve Fed districts District roundup Boston Flat Outlook ▶ Varied reports; mixed results. |
| New York Growing +0.5 Outlook ▲ Grown steadily. |
| Philadelphia Growing +0.5 Outlook ▲ Improved marginally. |
| Cleveland Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Richmond Flat Outlook ▶ Expanded at a slower pace. |
| Atlanta Growing +0.5 Outlook ▲ Expanded modestly. |
| Chicago Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| St. Louis Growing +0.5 Outlook ▲ Expanded modestly. |
| Minneapolis Growing +1.0 Outlook ▲ Grew firmly. |
| Kansas City Growing +1.0 Outlook ▲ Expanded moderately. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderately strong pace. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Broad +1s give Discretionary its best weighted reading in months.
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| | Financials — New York's -1 carries a large weight and nearly cancels four +1s.
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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 |