EconomyxAI · Sector Watch August 2014Released September 3, 2014 |
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Conditions index +0.49 avg of 11 sectors, −2 to +2 |
| Outlook index +0.33 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 September 3, 2014, with information collected on or before August 22, 2014. | | ■ | Activity expanded in all districts with no distinct shift in pace; six districts moderate, four modest, Boston improving and Richmond strengthening further. | | ■ | Consumer spending grew slightly to moderately with record auto sales in parts of Philadelphia and Dallas; tourism increased everywhere; manufacturing reports mixed. | | ■ | Loan demand rose in eight districts; real estate grew in about half; oil and gas edged higher; employment, wage and price trends little changed. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▶ Steady | +0.54 |
| Real Estate
XLRE
▶ Steady | +0.53 |
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| Weakest prospects Utilities
XLU
▶ Steady | +0.00 |
| Communication Services
XLC
▶ Steady | +0.03 |
| Consumer Staples
XLP
▲ Turning up | +0.05 |
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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 | Information Technology
XLK | | +0.54 | Favorable | +0.71 | +0.77 | ▶ +0.07 | | 2 | Real Estate
XLRE | | +0.53 | Favorable | +0.86 | +0.60 | ▶ +0.11 | | 3 | Energy
XLE | | +0.40 | Leaning Favorable | +0.67 | +0.55 | ▶ −0.10 | | 4 | Consumer Discretionary
XLY | | +0.36 | Leaning Favorable | +0.88 | +0.47 | ▶ −0.07 | | 5 | Materials
XLB | | +0.28 | Leaning Favorable | +0.63 | +0.00 | ▶ +0.23 | | 6 | Industrials
XLI | | +0.26 | Leaning Favorable | +0.55 | +0.68 | ▼ −0.85 | | 7 | Financials
XLF | | +0.25 | Leaning Favorable | +0.76 | +0.50 | ▼ −0.47 | | 8 | Health Care
XLV | | +0.10 | Neutral | +0.19 | +0.00 | ▶ +0.17 | | 9 | Consumer Staples
XLP | | +0.05 | Neutral | +0.07 | +0.00 | ▲ +0.15 | | 10 | Communication Services
XLC | | +0.03 | Neutral | +0.02 | +0.00 | ▶ +0.00 | | 11 | Utilities
XLU | | +0.00 | Neutral | +0.03 | +0.00 | ▶ −0.07 |
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 |
All districts expanded; no distinct shift in pace. | Hiring trends unchanged at modest rates; skilled shortages widespread. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price pressures largely unchanged. | Loan demand rose in eight districts; credit quality improved. | Contacts generally optimistic about future growth. |
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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 | +2 | · | · | · | · | · | · | · | · | · | +1 | +1 | | Health CareXLV | −1 | · | · | +1 | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | +1 | +1 | +1 | +1 | +1 | +1 | · | · | · | · | +1 | | Consumer DiscretionaryXLY | +1 | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | +1 | · | · | · | · | | IndustrialsXLI | +1 | · | +1 | +1 | +1 | · | +1 | +1 | · | · | +1 | · | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | · | · | · | | EnergyXLE | · | · | +1 | · | −1 | +1 | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | +1 | · | · | · | | Real EstateXLRE | · | +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 Information Technology +2 Boston Strong demand for software and IT; semiconductor orders unfilled. Why it matters: Strong IT read. | Information Technology +1 San Francisco Semiconductor demand strengthened on foreign orders. Why it matters: SF carries 47% of IT weight. | Consumer Discretionary +1 broad−based Broad-based Consumer spending grew; tourism increased everywhere; record auto sales. Why it matters: Discretionary positive in 11 districts. | Financials +1 broad−based Broad-based Loan volumes increased in nearly all reporting districts. Why it matters: Financials positive. | Industrials +1 Cleveland, Richmond, Dallas, Philadelphia, Chicago Manufacturing expanded. Why it matters: Industrials partially positive. | Industrials 0 New York, Atlanta, Minneapolis, Kansas City, San Francisco Manufacturing growth moderated or mixed. Why it matters: Holds Industrials down. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Appears to be improving. |
| New York Growing +1.0 Outlook ▲ Expand at a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Grow at a modest pace. |
| Cleveland Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Richmond Growing +1.0 Outlook ▲ Strengthened further. |
| Atlanta Growing +0.5 Outlook ▲ Increased modestly. |
| Chicago Growing +1.0 Outlook ▲ Growth remained moderate. |
| St. Louis Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▲ Grew modestly. |
| Dallas Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Improve moderately. |
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Where the signal is thin or split Divergences to watch | Information Technology — Boston (+2) and San Francisco (+1) drive the weighted IT score far above the unweighted average.
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| | Industrials — San Francisco and New York at 0 keep the weighted score below 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 |