EconomyxAI · Sector Watch August 2015Released September 2, 2015 |
| |
Conditions index +0.28 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 |
|
|
This release in brief The read | ■ | Released September 2, 2015, with information collected on or before August 24, 2015. | | ■ | Activity expanded across most regions; moderate in six districts, modest in New York, Philadelphia, Atlanta, Kansas City and Dallas, slight in Cleveland. | | ■ | Manufacturing mostly positive with declines only in New York and Kansas City; the strong dollar, cheap steel imports and the China slowdown weighed on some industries. | | ■ | Real estate improved in every district, lending rose with better credit quality, and the energy sector was flat or down everywhere as oil hit six-year lows. |
|
Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▶ Steady | +0.58 |
| Real Estate
XLRE
▶ Steady | +0.55 |
| Industrials
XLI
▶ Steady | +0.40 |
|
|
| Weakest prospects | Materials
XLB
▶ Steady | −0.20 |
| Communication Services
XLC
▼ Turning down | −0.07 |
|
|
|
|
All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
|---|
| 1 | Information Technology
XLK | | +0.58 | Favorable | +0.93 | +0.73 | ▶ +0.04 | | 2 | Real Estate
XLRE | | +0.55 | Favorable | +1.02 | +0.59 | ▶ +0.01 | | 3 | Industrials
XLI | | +0.40 | Leaning Favorable | +0.44 | +0.57 | ▶ +0.30 | | 4 | Financials
XLF | | +0.37 | Leaning Favorable | +0.85 | +0.50 | ▶ −0.00 | | 5 | Health Care
XLV | | +0.32 | Leaning Favorable | +0.36 | +0.50 | ▶ +0.10 | | 6 | Consumer Discretionary
XLY | | +0.26 | Leaning Favorable | +0.52 | +0.44 | ▼ −0.43 | | 7 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ −0.01 | | 8 | Consumer Staples
XLP | | +0.00 | Neutral | +0.07 | +0.00 | ▶ −0.07 | | 9 | Communication Services
XLC | | −0.07 | Neutral | +0.00 | +0.00 | ▼ −0.40 | | 10 | Materials
XLB | | −0.20 | Leaning Unfavorable | −0.44 | +0.00 | ▶ −0.07 | | 11 | Energy
XLE | | −0.35 | Leaning Unfavorable | −0.68 | −0.47 | ▶ +0.36 |
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 |
Six districts moderate, five modest, Cleveland slight. | Modest to moderate labor demand growth; tightening pushing wages up selectively. | | Inflation Pressure (higher = headwind) | | +0.00 |
Input and selling prices stable or up slightly. | Business and consumer loan volumes up; credit quality improving. | Most respondents expected growth to continue at its recent pace. |
|
Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
|---|
| Information TechnologyXLK | +1 | · | · | · | · | · | · | · | · | +1 | −1 | +2 | | Health CareXLV | · | · | · | · | +1 | · | · | +1 | +1 | · | · | +1 | | FinancialsXLF | +1 | +1 | +1 | +1 | +1 | +1 | · | +1 | · | · | +1 | +1 | | Consumer DiscretionaryXLY | +1 | · | +1 | · | +2 | · | +1 | +1 | · | +1 | −1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | −1 | +1 | · | +1 | +1 | +1 | · | · | −1 | · | +1 | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | −1 | −1 | · | −1 | · | −1 | −1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | +1 | +1 | | MaterialsXLB | · | · | · | −1 | · | · | −1 | −1 | · | −1 | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
|
Top highlights What moved the scores Information Technology +2 San Francisco Hiring picked up in the IT sector. Why it matters: SF carries 47% of IT weight. | Real Estate +1 broad−based Broad-based Home sales and home prices increasing in every District. Why it matters: All 12 districts positive. | Energy −1 Dallas, Cleveland, Atlanta, Kansas City Oil prices fell to lowest since 2009; drilling down. Why it matters: Energy negative with Dallas weight. | Financials +1 broad−based Broad-based Loan volumes increased; credit quality improving. Why it matters: Financials positive. | Materials −1 Cleveland, Chicago, St. Louis Cheap steel imports depressing demand. Why it matters: Materials negative. | Consumer Discretionary +2 Richmond Retail sales rose sharply. Why it matters: Discretionary lift. |
|
Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Moderate growth. |
| New York Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Philadelphia Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Cleveland Growing +0.5 Outlook ▶ Expanded at a slight pace. |
| Richmond Growing +1.0 Outlook ▲ Grew moderately. |
| Atlanta Growing +0.5 Outlook ▲ Modestly improved. |
| Chicago Growing +1.0 Outlook ▲ Growth remained moderate. |
| St. Louis Growing +1.0 Outlook ▲ Increase at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Posted moderate growth. |
| Kansas City Growing +0.5 Outlook ▶ Rose modestly. |
| Dallas Growing +0.5 Outlook ▶ Grew at a modest pace. |
| San Francisco Growing +1.0 Outlook ▲ Grew at a moderate pace. |
|
|
Where the signal is thin or split Divergences to watch | Information Technology — San Francisco +2 dominates; Dallas -1 has small offset.
|
| | Materials — steel-heavy Cleveland, Chicago, St. Louis negatives pull weighted Materials below zero.
|
|
|
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 |