EconomyxAI · Sector Watch April 2010Released April 14, 2010 |
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Conditions index +0.24 avg of 11 sectors, −2 to +2 |
| Outlook index +0.39 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released April 14, 2010, with information collected before April 5, 2010. | | ■ | Overall economic activity increased somewhat in every district except St. Louis, which reported softer conditions. | | ■ | Retail and vehicle sales generally rose, consumers seemed more confident, and tourism improved with hotel occupancy rising in New York, Chicago, Kansas City and San Francisco. | | ■ | Manufacturing increased in every district but St. Louis, led by metals, autos and high-tech goods; housing activity rose from low levels while commercial real estate stayed very weak, with Manhattan Class A rents down 20 to 25 percent. | | ■ | Banking was mixed with lower loan volumes, though Dallas said credit quality 'appeared to have turned a corner'; temporary hiring picked up, and input prices rose while retail prices held level. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▲ Improving | +0.60 |
| Materials
XLB
▶ Steady | +0.49 |
| Energy
XLE
▲ Turning up | +0.47 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.37 |
| Financials
XLF
▶ Steady | −0.15 |
| Health Care
XLV
▼ Turning down | +0.12 |
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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 | Industrials
XLI | | +0.60 | Favorable | +1.18 | +0.50 | ▲ +0.74 | | 2 | Materials
XLB | | +0.49 | Leaning Favorable | +0.62 | +0.50 | ▶ +0.19 | | 3 | Energy
XLE | | +0.47 | Leaning Favorable | +0.89 | +0.50 | ▲ +0.26 | | 4 | Consumer Discretionary
XLY | | +0.46 | Leaning Favorable | +0.70 | +0.67 | ▶ +0.15 | | 5 | Information Technology
XLK | | +0.42 | Leaning Favorable | +0.70 | +0.50 | ▶ +0.05 | | 6 | Communication Services
XLC | | +0.21 | Leaning Favorable | +0.00 | +0.50 | ▶ +0.00 | | 7 | Utilities
XLU | | +0.19 | Leaning Favorable | +0.00 | +0.50 | ▶ +0.00 | | 8 | Consumer Staples
XLP | | +0.13 | Neutral | +0.05 | +0.50 | ▶ −0.02 | | 9 | Health Care
XLV | | +0.12 | Neutral | +0.00 | +0.50 | ▼ −0.33 | | 10 | Financials
XLF | | −0.15 | Neutral | −0.74 | +0.04 | ▶ +0.06 | | 11 | Real Estate
XLRE | | −0.37 | Leaning Unfavorable | −0.73 | −0.45 | ▶ −0.01 |
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 increased in all districts except St. Louis. | Labor markets weak but temporary hiring rising; Boston firms restoring wage cuts. | | Inflation Pressure (higher = headwind) | | +0.00 |
Retail prices level; input prices for metals, fuels and chemicals rising. | Lending mixed; standards unchanged; credit quality stabilizing in Dallas and improving in Chicago. | Retailers expect sales improvement; Kansas City expects further improvement; Dallas more optimistic. |
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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 | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | −1 | −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 | +2 | +2 | +1 | +2 | −1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | +1 | · | · | · | · | | EnergyXLE | · | · | +1 | · | · | +1 | · | · | +1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | −2 | · | −1 | · | · | −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 +2 Cleveland, Chicago, Richmond Manufacturing continued to lead the way. Why it matters: Industrials lead. | Industrials +1 Most districts Increased orders, shipments or production. Why it matters: Broad Industrials strength. | Consumer Discretionary +1 Most districts Retail and auto sales increased. Why it matters: Discretionary positive. | Real Estate −2 New York Manhattan Class A rents down 20-25 percent. Why it matters: Large Real Estate weight. | Information Technology +1 San Francisco High-tech production increased. Why it matters: Largest IT weight. | Real Estate −1 Most districts Commercial real estate slow. Why it matters: Real Estate lags. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Continue to improve. |
| New York Growing +1.0 Outlook ▲ Strengthened noticeably. |
| Philadelphia Growing +0.5 Outlook ▲ Moved up somewhat. |
| Cleveland Growing +1.0 Outlook ▲ Further signs of strengthening. |
| Richmond Growing +0.5 Outlook ▲ Improved. |
| Atlanta Growing +0.5 Outlook ▲ Improving. |
| Chicago Growing +1.0 Outlook ▲ Improved; manufacturing leading. |
| St. Louis Contracting −0.5 Outlook ▲ Softened in most sectors. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +1.0 Outlook ▲ Expanded moderately. |
| Dallas Growing +1.0 Outlook ▲ Firmed up further. |
| San Francisco Growing +0.5 Outlook ▲ Continued to improve modestly. |
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Where the signal is thin or split Divergences to watch | Industrials — first +2 manufacturing readings since 2006.
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| | Real Estate — commercial real estate remains the main drag.
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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 |