EconomyxAI · Sector Watch April 2022Released April 20, 2022 |
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Conditions index +0.48 avg of 11 sectors, −2 to +2 |
| Outlook index +0.23 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 8/11 sectors improving |
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This release in brief The read | ■ | Released April 20, 2022, with information collected on or before April 11, 2022. | | ■ | Economic activity expanded at a moderate pace; Kansas City accelerated to a robust pace and Dallas grew at a faster clip. | | ■ | Consumer spending accelerated as COVID cases tapered; manufacturing solid; commercial real estate picked up modestly. | | ■ | The Russian invasion of Ukraine spiked energy, metals and agricultural prices; outlooks clouded by geopolitics and rising prices. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Industrials
XLI
▶ Steady | +0.61 |
| Information Technology
XLK
▲ Turning up | +0.56 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | −0.04 |
| Utilities
XLU
▶ Steady | −0.02 |
| Communication Services
XLC
▶ Steady | +0.04 |
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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 | Energy
XLE | | +0.65 | Favorable | +0.61 | +1.00 | ▶ −0.05 | | 2 | Industrials
XLI | | +0.61 | Favorable | +1.19 | +0.50 | ▶ +0.28 | | 3 | Information Technology
XLK | | +0.56 | Favorable | +0.70 | +0.50 | ▲ +0.70 | | 4 | Materials
XLB | | +0.46 | Leaning Favorable | +0.33 | +0.50 | ▶ +0.25 | | 5 | Consumer Discretionary
XLY | | +0.42 | Leaning Favorable | +1.10 | +0.00 | ▲ +0.94 | | 6 | Real Estate
XLRE | | +0.25 | Leaning Favorable | +1.05 | +0.00 | ▶ +0.12 | | 7 | Financials
XLF | | +0.13 | Neutral | +0.21 | +0.00 | ▲ +0.18 | | 8 | Health Care
XLV | | +0.06 | Neutral | +0.07 | +0.00 | ▲ +0.20 | | 9 | Communication Services
XLC | | +0.04 | Neutral | +0.00 | +0.00 | ▶ +0.15 | | 10 | Utilities
XLU | | −0.02 | Neutral | +0.00 | +0.00 | ▶ −0.07 | | 11 | Consumer Staples
XLP | | −0.04 | Neutral | +0.00 | +0.00 | ▶ −0.11 |
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 | | +1.00 |
Activity expanded moderately; Kansas City and Dallas accelerated. | Employment increased moderately; early signs wage growth slowing. | | Inflation Pressure (higher = headwind) | | +2.00 |
Inflationary pressures remained strong; Ukraine spiked commodity prices. | Loan demand mixed; rising rates weighed on mortgages. | Outlooks clouded by geopolitical uncertainty and rising prices. |
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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 | · | · | · | · | · | · | · | | FinancialsXLF | · | · | +1 | +1 | · | +1 | · | +1 | · | · | · | · | | Consumer DiscretionaryXLY | +1 | +1 | +1 | +1 | +1 | +1 | +1 | · | · | +2 | +2 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +2 | +1 | +1 | +1 | +2 | +1 | +2 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | +1 | +1 | +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 Consumer Discretionary +2 Kansas City, Dallas Leisure and hospitality much better than expected. Why it matters: Strong Discretionary reads. | Industrials +2 Cleveland, St. Louis, Kansas City Manufacturing demand increased strongly. Why it matters: Strongest Industrials reads. | Industrials +1 broad−based Broad-based Manufacturing solid across most districts. Why it matters: Broad Industrials support. | Real Estate +2 San Francisco Housing prices soaring on low inventory. Why it matters: SF carries large Real Estate weight. | Energy +1 Dallas, Kansas City Oil production expanding; energy jobs at multi-year high. Why it matters: Largest Energy weights. | Consumer Discretionary +1 broad−based Broad-based Consumer spending accelerated as COVID cases tapered. Why it matters: Broad Discretionary support. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| New York Growing +1.0 Outlook ▶ Growth picked up to a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Continued to grow modestly. |
| Cleveland Growing +1.0 Outlook ▲ Increased at a modest pace. |
| Richmond Growing +1.0 Outlook ▶ Grew moderately. |
| Atlanta Growing +1.0 Outlook ▲ Expanded moderately. |
| Chicago Growing +1.0 Outlook ▲ Increased moderately. |
| St. Louis Growing +1.0 Outlook ▶ Improved at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Increased moderately. |
| Kansas City Growing +2.0 Outlook ▲ Accelerated to a robust pace. |
| Dallas Growing +1.5 Outlook ▶ Expanded at a faster clip. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Kansas City and Dallas +2 alongside broad +1 reads lift the weighted score.
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| | Real Estate — San Francisco +2 keeps the weighted score above the unweighted average.
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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 |