EconomyxAI · Sector Watch April 2012Released April 11, 2012 |
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Conditions index +0.48 avg of 11 sectors, −2 to +2 |
| Outlook index +0.26 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released April 11, 2012, with information collected on or before April 2, 2012. | | ■ | Activity continued to expand at a modest to moderate pace; New York picked up, Minneapolis grew solidly and Kansas City expanded faster. | | ■ | Manufacturing expanded in most districts with auto and high-tech gains; retail spending improved almost everywhere, helped by warm weather; new-vehicle sales were strong. | | ■ | Residential real estate improved with multifamily construction, loan demand improved modestly, oil extraction rose, and rising fuel prices lifted transportation costs. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Discretionary
XLY
▲ Turning up | +0.56 |
| Information Technology
XLK
▶ Steady | +0.55 |
| Real Estate
XLRE
▶ Steady | +0.46 |
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| Weakest prospects Health Care
XLV
▶ Steady | −0.06 |
| Communication Services
XLC
▶ Steady | −0.03 |
| Consumer Staples
XLP
▶ 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 | | +0.56 | Favorable | +1.29 | +0.35 | ▲ +0.60 | | 2 | Information Technology
XLK | | +0.55 | Favorable | +0.75 | +0.73 | ▶ +0.10 | | 3 | Real Estate
XLRE | | +0.46 | Leaning Favorable | +0.64 | +0.36 | ▶ +0.47 | | 4 | Financials
XLF | | +0.45 | Leaning Favorable | +0.78 | +0.48 | ▲ +0.53 | | 5 | Industrials
XLI | | +0.32 | Leaning Favorable | +0.76 | +0.41 | ▶ −0.01 | | 6 | Energy
XLE | | +0.28 | Leaning Favorable | +0.63 | +0.48 | ▼ −0.51 | | 7 | Materials
XLB | | +0.18 | Leaning Favorable | +0.59 | +0.00 | ▶ +0.07 | | 8 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Consumer Staples
XLP | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Communication Services
XLC | | −0.03 | Neutral | −0.02 | +0.00 | ▶ −0.24 | | 11 | Health Care
XLV | | −0.06 | Neutral | −0.10 | +0.00 | ▶ −0.19 |
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 to moderate growth; New York picked up, Minneapolis solid, Kansas City faster. | Hiring steady or modestly higher in nine districts; skilled worker shortages. | | Inflation Pressure (higher = headwind) | | −0.50 |
Overall inflation modest but rising fuel costs raised transportation prices; input costs up. | Banking stable; loan demand improved in eight districts; credit quality up. | Manufacturers optimistic; concern about gas prices limiting discretionary spending. |
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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 | +1 | | Health CareXLV | · | · | +1 | · | · | · | +1 | −1 | · | · | · | −1 | | FinancialsXLF | · | +1 | +1 | +1 | +1 | · | +1 | · | · | +1 | +1 | +1 | | Consumer DiscretionaryXLY | +2 | +2 | +1 | +1 | +2 | +1 | +2 | +1 | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | −1 | · | · | · | | IndustrialsXLI | · | +1 | +1 | +1 | +1 | +1 | · | · | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | +1 | · | · | · | +1 | −1 | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | · | | MaterialsXLB | · | · | · | +1 | · | +1 | · | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Consumer Discretionary +2 Boston, New York, Richmond, Chicago Retail spending strong or significantly strengthening. Why it matters: High-weight districts drive Discretionary sharply higher. | Consumer Discretionary +1 broad−based Broad-based New-vehicle sales strong or strengthening across much of the US. Why it matters: Breadth supports Discretionary. | Financials +1 New York, Dallas, San Francisco Loan demand improved; middle-market lending strong. Why it matters: New York carries 28% of Financials weight. | Industrials +1 broad−based Broad-based Manufacturing continued to expand in most districts. Why it matters: Industrials positive. | Real Estate +1 broad−based Broad-based Residential real estate improved; multifamily construction expanded. Why it matters: Real Estate turns positive. | Information Technology +1 San Francisco, Kansas City, Dallas Semiconductor orders firming; high-tech sales increased. Why it matters: SF carries 47% of IT weight. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Continues to expand at a moderate pace. |
| New York Growing +1.0 Outlook ▲ Growth picked up somewhat. |
| Philadelphia Growing +0.5 Outlook ▲ Slow, steady improvement. |
| Cleveland Growing +0.5 Outlook ▶ Grew at a modest pace. |
| Richmond Growing +1.0 Outlook ▲ Business conditions have improved. |
| Atlanta Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Chicago Growing +1.0 Outlook ▲ Continued to expand at a moderate pace. |
| St. Louis Growing +0.5 Outlook ▶ Continued to grow at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew at a solid pace. |
| Kansas City Growing +1.0 Outlook ▲ Expanded at a faster pace. |
| Dallas Growing +1.0 Outlook ▶ Grew at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Continued to expand at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Strong reads from New York and Chicago lift the weighted score above the unweighted average.
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| | Health Care — San Francisco (-1) drags the weighted score below zero despite Philadelphia and Chicago gains.
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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 |