EconomyxAI · Sector Watch December 2011Released January 11, 2012 |
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Conditions index +0.35 avg of 11 sectors, −2 to +2 |
| Outlook index +0.16 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 8/11 sectors improving |
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This release in brief The read | ■ | Released January 11, 2012, with information collected on or before December 30, 2011. | | ■ | Activity expanded at a modest to moderate pace, with most districts reporting more favorable conditions than in the spring through early fall. | | ■ | Holiday retail sales rose noticeably from last year, autos picked up and tourism expanded; manufacturing generally continued to grow. | | ■ | Energy and agriculture were robust, residential real estate stayed sluggish, business loan demand edged up and price pressures were very limited. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Consumer Discretionary
XLY
▲ Turning up | +0.47 |
| Industrials
XLI
▲ Turning up | +0.45 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.03 |
| Utilities
XLU
▶ Steady | +0.01 |
| Communication Services
XLC
▶ Steady | +0.02 |
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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 | | +0.53 | Favorable | +1.03 | +0.78 | ▶ −0.09 | | 2 | Consumer Discretionary
XLY | | +0.47 | Leaning Favorable | +0.87 | +0.49 | ▲ +0.26 | | 3 | Industrials
XLI | | +0.45 | Leaning Favorable | +0.60 | +0.44 | ▲ +0.35 | | 4 | Information Technology
XLK | | +0.29 | Leaning Favorable | +0.61 | +0.05 | ▶ +0.33 | | 5 | Materials
XLB | | +0.21 | Leaning Favorable | +0.41 | +0.00 | ▲ +0.19 | | 6 | Financials
XLF | | +0.12 | Neutral | +0.17 | +0.00 | ▲ +0.51 | | 7 | Consumer Staples
XLP | | +0.10 | Neutral | +0.22 | +0.00 | ▶ +0.19 | | 8 | Health Care
XLV | | +0.04 | Neutral | +0.07 | +0.00 | ▶ +0.05 | | 9 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.02 | | 10 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Real Estate
XLRE | | −0.03 | Neutral | −0.08 | −0.01 | ▶ −0.14 |
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 growth; New York and Chicago noted a pickup; conditions more favorable than spring through early fall. | Limited permanent hiring; modest wage pressures except specialized skills. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price pressures very limited as input cost increases eased. | Slight uptick in business loan demand; credit quality improved. | Contacts expect modest growth to continue despite Europe and fiscal uncertainty. |
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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 | +1 | · | · | · | −1 | | FinancialsXLF | · | · | +1 | +1 | −1 | −1 | · | −1 | · | · | +1 | +1 | | Consumer DiscretionaryXLY | +1 | +2 | +1 | +1 | · | +1 | +1 | · | · | −1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | · | · | +1 | +1 | +1 | +1 | −1 | · | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | +1 | | EnergyXLE | · | · | · | · | · | +1 | · | · | +2 | +2 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | −1 | +1 | −1 | · | +1 | −1 | · | −1 | +1 | −1 | | MaterialsXLB | · | · | · | +1 | +1 | · | · | · | +1 | · | · | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy +2 Minneapolis, Kansas City Energy and mining activity continued to increase. Why it matters: Two strong reads lift Energy. | Consumer Discretionary +2 New York Brisk holiday spending and robust auto sales. Why it matters: New York carries substantial Discretionary weight. | Consumer Discretionary +1 broad−based Broad-based Holiday retail sales up noticeably over last year. Why it matters: Breadth lifts Discretionary. | Industrials +1 broad−based Broad-based Manufacturing expanded in most districts. Why it matters: Industrials positive on breadth. | Information Technology +1 San Francisco, Dallas Computer and electronic components demand rose further. Why it matters: High-weight districts lift IT. | Financials +1 Philadelphia, Cleveland, Dallas, San Francisco Business loan demand edged up; credit quality improved. Why it matters: Financials turn positive. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Modest revenue growth; cautious mood. |
| New York Growing +1.0 Outlook ▲ Grew at a faster pace led by brisk holiday spending. |
| Philadelphia Growing +0.5 Outlook ▲ Continued to grow modestly. |
| Cleveland Growing +0.5 Outlook ▼ Grew at a slow pace. |
| Richmond Flat Outlook ▲ Flattened or improved slightly. |
| Atlanta Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Chicago Growing +1.0 Outlook ▶ Growth picked up. |
| St. Louis Growing +0.5 Outlook ▶ Grew at a modest pace. |
| Minneapolis Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Kansas City Growing +0.5 Outlook ▲ Expanded modestly; spending softened. |
| Dallas Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▶ Continued to grow at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — New York (+2) lifts the weighted score above the unweighted average.
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| | Health Care — San Francisco's decline (-1) offsets several smaller positive districts.
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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 |