EconomyxAI · Sector Watch February 2010Released March 3, 2010 |
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Conditions index +0.14 avg of 11 sectors, −2 to +2 |
| Outlook index +0.41 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 4/11 sectors improving |
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This release in brief The read | ■ | Released March 3, 2010, with information collected before February 22, 2010. | | ■ | Economic conditions continued to expand, though severe early-February snowstorms held back activity; nine districts improved modestly, Atlanta and St. Louis were mixed, and Richmond slackened on record snow. | | ■ | Consumer spending improved slightly in many districts but auto sales were flat or down; tourism rose or was mixed, with Manhattan hotel occupancy up considerably. | | ■ | Manufacturing strengthened in most regions, especially high-tech equipment, autos and metals, with several districts planning higher capital spending; commercial real estate stayed weak with slight stabilization in places. | | ■ | Loan demand stayed weak and standards tight, but loan quality showed signs of stabilizing; layoffs slowed, and input costs rose while selling prices stayed flat on limited pricing power. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▲ Turning up | +0.52 |
| Materials
XLB
▶ Steady | +0.41 |
| Information Technology
XLK
▶ Steady | +0.38 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.38 |
| Financials
XLF
▶ Steady | −0.20 |
| Consumer Staples
XLP
▶ Steady | +0.15 |
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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 | Industrials
XLI | | +0.52 | Favorable | +0.60 | +0.97 | ▲ +0.30 | | 2 | Materials
XLB | | +0.41 | Leaning Favorable | +0.40 | +0.50 | ▶ +0.09 | | 3 | Information Technology
XLK | | +0.38 | Leaning Favorable | +0.64 | +0.50 | ▶ −0.03 | | 4 | Health Care
XLV | | +0.33 | Leaning Favorable | +0.37 | +0.50 | ▶ +0.15 | | 5 | Consumer Discretionary
XLY | | +0.25 | Leaning Favorable | +0.50 | +0.50 | ▶ −0.09 | | 6 | Energy
XLE | | +0.21 | Leaning Favorable | +0.44 | +0.50 | ▼ −0.42 | | 7 | Communication Services
XLC | | +0.20 | Leaning Favorable | +0.00 | +0.50 | ▶ +0.00 | | 8 | Utilities
XLU | | +0.18 | Leaning Favorable | +0.00 | +0.50 | ▶ +0.00 | | 9 | Consumer Staples
XLP | | +0.15 | Neutral | +0.00 | +0.50 | ▶ −0.10 | | 10 | Financials
XLF | | −0.20 | Leaning Unfavorable | −0.73 | +0.04 | ▶ +0.09 | | 11 | Real Estate
XLRE | | −0.38 | Leaning Unfavorable | −0.70 | −0.46 | ▶ −0.06 |
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 |
Nine districts improved modestly; Atlanta and St. Louis mixed; Richmond slackened on weather. | Layoffs slowing; temporary staffing accelerating; some recalls; hiring plans still soft. | | Inflation Pressure (higher = headwind) | | +0.00 |
Rising input costs for metals and lumber; selling prices stable on limited pricing power. | Loan demand weak; standards tight; loan quality stabilizing; more business loan inquiries. | Manufacturers optimistic with planned capital spending increases; Dallas outlooks more upbeat. |
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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 | | FinancialsXLF | −1 | −1 | · | −1 | · | · | · | −1 | −1 | −1 | −1 | −1 | | Consumer DiscretionaryXLY | · | +1 | · | · | −1 | · | +1 | −1 | +1 | · | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | · | +1 | · | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | +1 | · | · | · | · | +1 | +1 | +1 | −1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | −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 Industrials +1 Most districts Manufacturing strengthened in most regions. Why it matters: Industrials positive broadly. | Information Technology +1 San Francisco Strength in semiconductors. Why it matters: Largest IT weight. | Materials +1 Cleveland, Chicago, Dallas Strong metals production; steel prices up. Why it matters: Materials positive. | Real Estate −1 New York, San Francisco and most districts Commercial real estate weak or declining. Why it matters: Real Estate lags. | Financials −1 Most districts Loan demand weak; standards tight. Why it matters: Financials lags. | Consumer Discretionary +1 Chicago, Dallas, San Francisco, New York Retail sales improved. Why it matters: Discretionary positive. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Continues to show improvement. |
| New York Growing +0.5 Outlook ▲ Further signs of strengthening; hiring pickup. |
| Philadelphia Growing +0.5 Outlook ▲ Improved in some sectors. |
| Cleveland Growing +0.5 Outlook ▲ Some signs of improvement. |
| Richmond Contracting −0.5 Outlook ▲ Slackened, largely on severe winter storms. |
| Atlanta Flat Outlook ▲ Mixed picture. |
| Chicago Growing +1.0 Outlook ▲ Improved at a moderate pace. |
| St. Louis Flat Outlook ▲ Mixed with further signs of improvement. |
| Minneapolis Growing +0.5 Outlook ▲ Grew modestly. |
| Kansas City Growing +0.5 Outlook ▲ Further signs of modest growth. |
| Dallas Growing +1.0 Outlook ▲ Improved further; outlooks more upbeat. |
| San Francisco Growing +0.5 Outlook ▲ Increased modestly. |
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Where the signal is thin or split Divergences to watch | Weather — February snowstorms depressed East Coast retail, housing and services.
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| | Materials — rising metals prices and production put Materials among the leaders.
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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 |