EconomyxAI · Sector Watch August 2013Released September 4, 2013 |
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Conditions index +0.29 avg of 11 sectors, −2 to +2 |
| Outlook index +0.21 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 2/11 sectors improving |
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This release in brief The read | ■ | Released September 4, 2013, with information collected on or before August 26, 2013. | | ■ | Activity expanded at a modest to moderate pace; eight districts moderate, Boston, Atlanta and San Francisco modest, Chicago improved. | | ■ | Consumer spending rose in most districts with strong autos and tourism; manufacturing expanded modestly; residential real estate rose moderately. | | ■ | Lending weakened somewhat while credit quality improved; price pressures subdued and wage growth modest. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▼ Turning down | +0.52 |
| Consumer Discretionary
XLY
▶ Steady | +0.41 |
| Industrials
XLI
▶ Steady | +0.33 |
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| Weakest prospects Health Care
XLV
▼ Weakening | −0.16 |
| Financials
XLF
▼ Turning down | −0.13 |
| Utilities
XLU
▶ Steady | −0.03 |
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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 | | +0.52 | Favorable | +1.25 | +0.50 | ▼ −0.20 | | 2 | Consumer Discretionary
XLY | | +0.41 | Leaning Favorable | +0.83 | +0.47 | ▶ +0.06 | | 3 | Industrials
XLI | | +0.33 | Leaning Favorable | +0.73 | +0.36 | ▶ −0.04 | | 4 | Energy
XLE | | +0.30 | Leaning Favorable | +0.46 | +0.44 | ▶ +0.08 | | 5 | Information Technology
XLK | | +0.16 | Leaning Favorable | +0.36 | +0.23 | ▼ −0.25 | | 6 | Communication Services
XLC | | +0.01 | Neutral | +0.00 | +0.00 | ▶ −0.03 | | 7 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Materials
XLB | | −0.02 | Neutral | +0.01 | +0.00 | ▼ −0.20 | | 9 | Utilities
XLU | | −0.03 | Neutral | +0.00 | +0.00 | ▶ −0.12 | | 10 | Financials
XLF | | −0.13 | Neutral | −0.18 | +0.25 | ▼ −0.69 | | 11 | Health Care
XLV | | −0.16 | Leaning Unfavorable | −0.32 | +0.00 | ▼ −0.32 |
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 expansion in all districts; Chicago improved. | Employment held steady or increased modestly; reluctance to hire full-time. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price pressures subdued; wage pressures modest. | Loan demand weakened slightly; credit quality improved. | Most districts optimistic about the outlook. |
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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 | · | · | · | −1 | | FinancialsXLF | · | · | +1 | · | · | −1 | −1 | −1 | · | −1 | · | · | | Consumer DiscretionaryXLY | +1 | +1 | +1 | · | −1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | +1 | +1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | +1 | · | · | · | −1 | · | · | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +2 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | | MaterialsXLB | · | · | · | −1 | −1 | · | · | · | · | · | +1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate +2 New York, Dallas Strong co-op sales; strong commercial real estate. Why it matters: Two strong reads lift Real Estate. | Real Estate +1 broad−based Broad-based Residential real estate rose at a moderate pace. Why it matters: Broad positive RE. | Consumer Discretionary +1 broad−based Broad-based Consumer spending up in most districts; autos strong. Why it matters: Discretionary positive. | Industrials +1 broad−based Broad-based Manufacturing expanded modestly. Why it matters: Industrials positive in 10 districts. | Information Technology +1 San Francisco Semiconductor demand increased. Why it matters: SF carries 47% of IT weight. | Information Technology −1 Boston, St. Louis, Kansas City Software weaker than expected; high-tech dipped. Why it matters: Offsets IT. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Continues to expand modestly. |
| New York Growing +1.0 Outlook ▲ Continued to grow moderately. |
| Philadelphia Growing +1.0 Outlook ▲ Grew at a modest pace. |
| Cleveland Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Richmond Growing +1.0 Outlook ▲ Moderate growth, retail weakened. |
| Atlanta Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Chicago Growing +1.0 Outlook ▲ Activity improved. |
| St. Louis Growing +1.0 Outlook ▲ Moderately improved. |
| Minneapolis Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Kansas City Growing +1.0 Outlook ▲ Grew moderately. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a modest pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco (+1, 47% weight) keeps weighted IT positive while the unweighted average is negative.
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| | Financials — Several large districts flat or negative leaves the weighted score near zero.
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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 |