EconomyxAI · Sector Watch February 2012Released February 29, 2012 |
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Conditions index +0.45 avg of 11 sectors, −2 to +2 |
| Outlook index +0.23 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released February 29, 2012, with information collected on or before February 17, 2012. | | ■ | Activity continued to increase at a modest to moderate pace; Philadelphia and Atlanta sped up while New York slowed somewhat. | | ■ | Manufacturing expanded in all twelve districts with gains in orders and capital spending, especially auto-related; consumer spending was generally positive apart from seasonal items. | | ■ | Residential real estate improved somewhat in most districts, banking conditions improved, extraction activity increased, and prices were stable with some input cost pressure. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Industrials
XLI
▲ Improving | +0.55 |
| Information Technology
XLK
▶ Steady | +0.46 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | +0.00 |
| Communication Services
XLC
▼ Turning down | +0.00 |
| Utilities
XLU
▶ Steady | +0.01 |
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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 | | +0.65 | Favorable | +1.24 | +0.79 | ▶ +0.23 | | 2 | Industrials
XLI | | +0.55 | Favorable | +0.93 | +0.53 | ▲ +0.51 | | 3 | Information Technology
XLK | | +0.46 | Leaning Favorable | +0.70 | +0.55 | ▶ +0.12 | | 4 | Real Estate
XLRE | | +0.37 | Leaning Favorable | +0.42 | +0.33 | ▲ +0.41 | | 5 | Materials
XLB | | +0.31 | Leaning Favorable | +0.63 | +0.00 | ▶ +0.36 | | 6 | Consumer Discretionary
XLY | | +0.22 | Leaning Favorable | +0.51 | +0.42 | ▼ −0.22 | | 7 | Financials
XLF | | +0.10 | Neutral | +0.34 | −0.14 | ▶ +0.40 | | 8 | Health Care
XLV | | +0.06 | Neutral | +0.11 | +0.00 | ▶ +0.07 | | 9 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Communication Services
XLC | | +0.00 | Neutral | +0.04 | +0.00 | ▼ −0.15 | | 11 | Consumer Staples
XLP | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 |
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; Minneapolis firm; Philadelphia and Atlanta faster; New York slower. | Hiring increased slightly in several districts; skilled worker shortages. | | Inflation Pressure (higher = headwind) | | +0.00 |
Final goods prices stable; some rising input prices with expected pass-through. | Banking conditions generally improved; lending increased in six districts; quality improved. | Sales outlooks mostly optimistic; Dallas outlooks more positive; Philadelphia brighter. |
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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 | · | +2 | +1 | +1 | | Health CareXLV | · | · | · | · | +1 | · | · | +1 | · | · | · | · | | FinancialsXLF | · | · | +1 | +1 | · | −1 | +1 | · | · | · | +1 | +1 | | Consumer DiscretionaryXLY | +1 | · | +1 | · | +1 | +1 | · | +1 | · | −1 | · | +1 | | Communication ServicesXLC | · | · | +1 | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | +1 | · | +1 | +2 | +2 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | · | +1 | · | +1 | +1 | · | −1 | +1 | +1 | +1 | · | | MaterialsXLB | · | · | +1 | +1 | · | · | +1 | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +1 broad−based All districts Manufacturing continued to increase across all twelve districts. Why it matters: Broad-based Industrials strength. | Energy +2 Kansas City, Dallas Drilling rebounded; energy service demand very strong. Why it matters: Dallas carries 45% of Energy weight. | Information Technology +1 San Francisco Semiconductor manufacturers reported moderate sales gains. Why it matters: SF carries 47% of IT weight. | Information Technology +2 Kansas City High-tech industry reported a sharp increase in sales. Why it matters: Strong read adds to IT. | Financials +1 Chicago, Dallas, San Francisco Loan growth continued at a moderate pace. Why it matters: Financials positive. | Real Estate +1 Boston, Atlanta, Dallas, Kansas City Home sales grew; multifamily strong. Why it matters: Real Estate improves. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Continues to expand; contacts upbeat. |
| New York Flat Outlook ▶ Expanded at a somewhat slower pace. |
| Philadelphia Growing +1.0 Outlook ▲ Grew at a somewhat faster pace. |
| Cleveland Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| Richmond Growing +0.5 Outlook ▲ Improved in most sectors. |
| Atlanta Growing +1.0 Outlook ▲ Expanded at a somewhat stronger pace. |
| Chicago Growing +1.0 Outlook ▶ Continued to expand at a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Continued to expand at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew at a firm pace. |
| Kansas City Growing +1.0 Outlook ▲ Expanded moderately. |
| Dallas Growing +1.0 Outlook ▲ Continued to grow 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 | Industrials — Breadth across all districts makes weighted and unweighted scores similar.
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| | Information Technology — San Francisco (+1) combined with Kansas City (+2) lifts the weighted score.
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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 |