EconomyxAI · Beige Book Sector Monitor February 2007Released March 7, 2007 |
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Conditions index +0.19 avg of 11 sectors, −2 to +2 |
| Outlook index +0.09 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released March 7, 2007, with information collected before late February 2007 (date not printed in the PDF). | | ■ | Most districts reported modest expansion but several noted some slowing: New York saw signs of deceleration, St. Louis grew more slowly, Boston softened and Dallas kept decelerating, while Philadelphia improved slightly. | | ■ | Retail sales grew steadily in most districts but bad weather hurt Boston, Cleveland and Kansas City; vehicle sales stayed sluggish and tourism was generally positive. | | ■ | Manufacturing was steady or expanding despite weakness tied to construction and autos; housing stayed weak with signs of stabilization in several districts, and commercial real estate remained solid. | | ■ | Labor markets expanded with tight supply of skilled workers and slightly more wage pressure; price pressures were little changed as energy and construction materials fell but food inputs rose. |
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Sector prospects Where the 3–12 month view points Strongest prospects Health Care
XLV
▶ Steady | +0.38 |
| Information Technology
XLK
▶ Steady | +0.38 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.25 |
| Financials
XLF
▶ Steady | −0.10 |
| Consumer Staples
XLP
▶ Steady | −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 | Health Care
XLV | | +0.38 | Leaning Favorable | +0.50 | +0.50 | ▶ +0.14 | | 2 | Information Technology
XLK | | +0.38 | Leaning Favorable | +0.56 | +0.50 | ▶ +0.04 | | 3 | Energy
XLE | | +0.28 | Leaning Favorable | +0.69 | +0.50 | ▶ −0.17 | | 4 | Consumer Discretionary
XLY | | +0.12 | Neutral | +0.40 | +0.00 | ▶ −0.12 | | 5 | Industrials
XLI | | +0.04 | Neutral | +0.18 | +0.00 | ▶ −0.18 | | 6 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Materials
XLB | | −0.02 | Neutral | −0.14 | +0.00 | ▶ −0.03 | | 9 | Consumer Staples
XLP | | −0.05 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Financials
XLF | | −0.10 | Neutral | −0.04 | +0.00 | ▶ −0.32 | | 11 | Real Estate
XLRE | | −0.25 | Leaning Unfavorable | −0.02 | −0.50 | ▶ +0.04 |
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 expansion in most districts with several noting slowing; Philadelphia improved slightly. | Further expansion in labor markets; tight supply of skilled workers; wage pressures up slightly. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price pressures little changed; energy and construction materials fell; food input costs rose. | Lending mostly unchanged as C&I gains offset mortgage declines; subprime deterioration in Atlanta and Chicago; tighter standards in New York. | New York manufacturers widely optimistic; capital spending plans up in three districts; housing showing tentative stabilization. |
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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 | | Health CareXLV | +1 | · | · | +1 | +1 | · | +1 | · | · | · | · | +1 | | FinancialsXLF | · | −1 | +1 | · | · | · | · | · | · | +1 | · | +1 | | Consumer DiscretionaryXLY | −1 | +1 | · | −1 | −1 | · | · | +1 | +1 | · | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | +1 | · | · | −1 | · | · | −1 | +1 | +2 | −1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | −1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | · | · | · | · | · | −1 | · | · | · | · | · | | MaterialsXLB | · | · | · | · | · | · | · | · | · | · | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +2 Kansas City Sharp rise in production and new orders. Why it matters: Strongest Industrials reading. | Consumer Discretionary −1 Boston, Cleveland, Richmond Retail sales declining; autos awful. Why it matters: Discretionary drag. | Consumer Discretionary +1 New York, Dallas, San Francisco Sales on plan; retail strengthened. Why it matters: Discretionary support. | Financials −1 New York Loan demand down; standards tightened. Why it matters: Largest Financials weight. | Information Technology +1 San Francisco, Boston Semiconductors solid; software revenue up. Why it matters: IT positive. | Health Care +1 Boston, Richmond, Chicago, San Francisco Healthcare demand and hiring strong. Why it matters: Health Care support. |
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Twelve Fed districts District roundup Boston Contracting −0.5 Outlook ▼ Some softening since last report. |
| New York Growing +0.5 Outlook ▲ Expansion well maintained, some deceleration. |
| Philadelphia Growing +0.5 Outlook ▲ Improved slightly. |
| Cleveland Growing +0.5 Outlook ▲ Modest growth. |
| Richmond Growing +0.5 Outlook ▲ Expanded modestly. |
| Atlanta Growing +0.5 Outlook ▲ Expanded modestly. |
| Chicago Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| St. Louis Growing +0.5 Outlook ▲ Increased more slowly. |
| Minneapolis Growing +0.5 Outlook ▲ Increased slightly. |
| Kansas City Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Dallas Flat Outlook ▶ Continued to decelerate. |
| San Francisco Growing +1.0 Outlook ▲ Grew at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Three -1s against five +1s leave weighted Discretionary only slightly positive.
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| | Industrials — Kansas City's +2 is offset by -1s in Richmond, St. Louis and Dallas.
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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 |