EconomyxAI · Beige Book Sector Monitor February 2017Released March 1, 2017 |
| |
Conditions index +0.40 avg of 11 sectors, −2 to +2 |
| Outlook index +0.40 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 7/11 sectors improving |
|
|
This release in brief The read | ■ | Released March 1, 2017, with information collected on or before February 17, 2017. | | ■ | The economy expanded at a modest to moderate pace in all twelve districts; Cleveland, Richmond, Chicago, Dallas and San Francisco moderate. | | ■ | Manufacturing accelerated somewhat with most districts reporting moderate growth; energy showed modest growth; retail sales subdued as shopping shifted online. | | ■ | Home construction and sales expanded modestly, commercial real estate grew, lending steady to higher, labor markets tight with widening shortages. |
|
Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▶ Steady | +0.67 |
| Materials
XLB
▲ Improving | +0.43 |
| |
|
| Weakest prospects Communication Services
XLC
▼ Turning down | −0.07 |
| Utilities
XLU
▶ Steady | +0.05 |
| Consumer Staples
XLP
▶ Steady | +0.08 |
|
|
|
|
All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
|---|
| 1 | Industrials
XLI | | +0.67 | Favorable | +0.90 | +0.97 | ▶ +0.23 | | 2 | Materials
XLB | | +0.43 | Leaning Favorable | +0.27 | +0.50 | ▲ +0.54 | | 3 | Energy
XLE | | +0.42 | Leaning Favorable | +0.57 | +0.50 | ▶ +0.23 | | 4 | Consumer Discretionary
XLY | | +0.41 | Leaning Favorable | +0.65 | +0.47 | ▶ +0.33 | | 5 | Real Estate
XLRE | | +0.38 | Leaning Favorable | +0.75 | +0.50 | ▶ −0.24 | | 6 | Health Care
XLV | | +0.30 | Leaning Favorable | +0.28 | +0.40 | ▲ +0.28 | | 7 | Information Technology
XLK | | +0.28 | Leaning Favorable | +0.49 | +0.50 | ▼ −0.35 | | 8 | Financials
XLF | | +0.18 | Leaning Favorable | +0.16 | +0.50 | ▶ −0.32 | | 9 | Consumer Staples
XLP | | +0.08 | Neutral | +0.22 | +0.00 | ▶ +0.11 | | 10 | Utilities
XLU | | +0.05 | Neutral | +0.13 | +0.00 | ▶ +0.05 | | 11 | Communication Services
XLC | | −0.07 | Neutral | +0.00 | +0.00 | ▼ −0.40 |
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 |
All twelve districts expanded at a modest to moderate pace. | Labor markets tight with widening shortages; moderate employment growth. | | Inflation Pressure (higher = headwind) | | +0.50 |
Selling prices up modestly or moderately; construction materials up. | Lending steady to somewhat higher; New York delinquencies rose. | Generally optimistic but somewhat less than prior report; policy uncertainty. |
|
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 | | Health CareXLV | · | · | · | · | +1 | · | · | · | · | · | · | +1 | | FinancialsXLF | · | −1 | · | +1 | +1 | +1 | · | +1 | · | · | +1 | +1 | | Consumer DiscretionaryXLY | · | −1 | · | +1 | +1 | +1 | +1 | · | · | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +2 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | +1 | | EnergyXLE | · | · | · | · | +1 | · | · | · | · | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | +1 | · | +1 | +1 | +1 | +1 | · | +1 | +1 | · | +1 | +1 | | MaterialsXLB | · | · | +1 | +1 | · | · | +1 | · | +1 | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
|
Top highlights What moved the scores Industrials +2 New York Business activity picked up sharply in early 2017. Why it matters: NY Industrials lift. | Industrials +1 broad−based Broad-based Manufacturing accelerated, mostly moderate. Why it matters: Industrials strongest sector. | Financials −1 New York Loan demand retreated; delinquency rates rose. Why it matters: Large FN weight. | Consumer Discretionary −1 New York Disappointing retail sales; tourism softening. Why it matters: NY trims CD. | Energy +1 Kansas City, Dallas, Richmond Energy activity increased moderately. Why it matters: Energy positive. | Materials +1 Philadelphia, Cleveland, Chicago, Minneapolis Metals activity increased; iron ore near capacity. Why it matters: Materials positive. |
|
Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Modest to moderate increases. |
| New York Growing +0.5 Outlook ▲ Accelerated to a modest pace. |
| Philadelphia Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Cleveland Growing +1.0 Outlook ▲ Grew moderately. |
| Richmond Growing +1.0 Outlook ▲ Grew moderately. |
| Atlanta Growing +0.5 Outlook ▲ Expanded modestly. |
| Chicago Growing +1.0 Outlook ▲ Picked up to a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Expand at a modest pace. |
| Minneapolis Growing +0.5 Outlook ▲ Grew modestly. |
| Kansas City Growing +0.5 Outlook ▲ Expand modestly. |
| Dallas Growing +1.0 Outlook ▲ Expanded moderately. |
| San Francisco Growing +1.0 Outlook ▲ Moderate pace. |
|
|
Where the signal is thin or split Divergences to watch | Industrials — Eleven positive district reads lift Industrials strongly.
|
| | Financials — New York -1 trims the weighted Financials score below the unweighted average.
|
|
|
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 |