EconomyxAI · Sector Watch April 2016Released April 13, 2016 |
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Conditions index +0.28 avg of 11 sectors, −2 to +2 |
| Outlook index +0.28 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 8/11 sectors improving |
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This release in brief The read | ■ | Released April 13, 2016, with information collected on or before April 7, 2016. | | ■ | National activity continued to expand at a modest to moderate pace; Chicago picked up to moderate, Atlanta unchanged, Dallas flat to up slightly. | | ■ | Manufacturing increased in most districts with declines only in Cleveland and Kansas City; autos, aerospace and electronics strongest, oil and gas suppliers weak. | | ■ | Construction and real estate expanded, credit conditions improved, energy and mining output weighed down by low prices, input costs eased. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.65 |
| Industrials
XLI
▲ Improving | +0.54 |
| Information Technology
XLK
▲ Turning up | +0.48 |
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| Weakest prospects Energy
XLE
▲ Turning up | −0.42 |
| Communication Services
XLC
▶ Steady | −0.02 |
| Materials
XLB
▶ Steady | −0.01 |
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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 | Real Estate
XLRE | | +0.65 | Favorable | +1.25 | +0.55 | ▶ +0.28 | | 2 | Industrials
XLI | | +0.54 | Favorable | +0.60 | +0.49 | ▲ +0.70 | | 3 | Information Technology
XLK | | +0.48 | Leaning Favorable | +0.66 | +0.73 | ▲ −0.05 | | 4 | Health Care
XLV | | +0.45 | Leaning Favorable | +0.53 | +0.60 | ▲ +0.26 | | 5 | Consumer Discretionary
XLY | | +0.43 | Leaning Favorable | +0.63 | +0.50 | ▶ +0.19 | | 6 | Financials
XLF | | +0.40 | Leaning Favorable | +0.70 | +0.47 | ▲ +0.41 | | 7 | Consumer Staples
XLP | | +0.07 | Neutral | +0.15 | +0.00 | ▶ +0.15 | | 8 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Materials
XLB | | −0.01 | Neutral | −0.23 | +0.00 | ▶ +0.33 | | 10 | Communication Services
XLC | | −0.02 | Neutral | +0.00 | +0.00 | ▶ −0.20 | | 11 | Energy
XLE | | −0.42 | Leaning Unfavorable | −1.19 | −0.28 | ▲ +0.25 |
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 |
Most districts in modest to moderate range; expectations similar. | Labor conditions strengthened; job gains in most districts; wage pickup. | | Inflation Pressure (higher = headwind) | | +0.25 |
Retail prices up modestly; input costs eased on energy. | Credit conditions improved on net; competitive lending environment. | Contacts expected growth to remain modest to moderate; Chicago renewed optimism. |
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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 | · | · | · | · | +1 | · | · | +1 | · | · | · | +2 | | FinancialsXLF | · | +1 | +1 | · | +1 | +1 | +1 | +2 | · | · | −1 | +1 | | Consumer DiscretionaryXLY | +1 | · | +1 | +1 | +2 | +1 | +1 | · | +1 | · | −1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | −1 | +1 | +1 | +1 | +1 | +1 | −1 | · | +1 | | Consumer StaplesXLP | · | · | · | · | · | +1 | · | · | +1 | · | · | · | | EnergyXLE | · | · | · | −1 | −1 | −1 | · | −1 | −1 | −1 | −2 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +2 | · | +1 | +2 | +1 | +1 | +1 | +2 | +1 | +1 | +1 | +2 | | MaterialsXLB | · | · | +1 | · | · | · | · | −1 | · | −1 | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate +2 San Francisco, Boston, Cleveland, St. Louis Residential real estate robust; strong closed sales. Why it matters: Strongest RE reads. | Industrials +1 broad−based Broad-based Manufacturing activity increased in most Districts. Why it matters: Industrials rebound. | Health Care +2 San Francisco Robust demand for health care services. Why it matters: Large HC weight. | Energy −2 Dallas Demand for oilfield services remained depressed. Why it matters: Dallas carries the largest Energy weight. | Financials +2 St. Louis Loans outstanding up 20 percent. Why it matters: Financials lift. | Consumer Discretionary +2 Richmond Retail sales increased briskly. Why it matters: Discretionary lift. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Rising sales and revenues. |
| New York Growing +0.5 Outlook ▲ Grown at a modest pace. |
| Philadelphia Growing +0.5 Outlook ▲ Resumed a modest pace. |
| Cleveland Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Richmond Growing +1.0 Outlook ▲ Strengthened. |
| Atlanta Flat Outlook ▲ Unchanged from previous report. |
| Chicago Growing +1.0 Outlook ▲ Picked up to a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Improved at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▲ Increased slightly. |
| Dallas Flat Outlook ▲ Flat to up slightly. |
| San Francisco Growing +1.0 Outlook ▲ Grew at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Real Estate — Four +2 reads including San Francisco and Boston drive RE strongly positive.
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| | Industrials — Ten positive or neutral districts move Industrials back into positive territory.
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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 |