EconomyxAI · Sector Watch January 2014Released January 15, 2014 |
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Conditions index +0.43 avg of 11 sectors, −2 to +2 |
| Outlook index +0.29 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released January 15, 2014, with information collected on or before January 6, 2014. | | ■ | Activity expanded across most regions; nine districts moderate, with Atlanta and Chicago improving; Boston and Philadelphia modest; Kansas City held steady. | | ■ | Retail activity increased in most districts and holiday sales met plans; all districts reported year-over-year manufacturing gains, led by aviation, autos and construction materials. | | ■ | Real estate continued to improve, energy activity rose, loan volumes were little changed, and wage and price pressures stayed contained. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▲ Turning up | +0.54 |
| Industrials
XLI
▶ Steady | +0.48 |
| Information Technology
XLK
▶ Steady | +0.46 |
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| Weakest prospects Communication Services
XLC
▶ Steady | −0.00 |
| Utilities
XLU
▶ Steady | −0.00 |
| Health Care
XLV
▶ Steady | +0.03 |
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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 | | +0.54 | Favorable | +1.03 | +0.50 | ▲ +0.21 | | 2 | Industrials
XLI | | +0.48 | Leaning Favorable | +0.86 | +0.66 | ▶ +0.04 | | 3 | Information Technology
XLK | | +0.46 | Leaning Favorable | +0.61 | +0.77 | ▶ −0.14 | | 4 | Real Estate
XLRE | | +0.45 | Leaning Favorable | +0.82 | +0.58 | ▶ −0.12 | | 5 | Consumer Discretionary
XLY | | +0.25 | Leaning Favorable | +0.57 | +0.47 | ▼ −0.21 | | 6 | Materials
XLB | | +0.20 | Leaning Favorable | +0.35 | +0.00 | ▶ +0.20 | | 7 | Financials
XLF | | +0.12 | Neutral | +0.17 | +0.25 | ▶ +0.06 | | 8 | Consumer Staples
XLP | | +0.10 | Neutral | +0.22 | +0.00 | ▲ +0.20 | | 9 | Health Care
XLV | | +0.03 | Neutral | +0.01 | +0.00 | ▶ +0.11 | | 10 | Utilities
XLU | | −0.00 | Neutral | +0.03 | +0.00 | ▶ −0.07 | | 11 | Communication Services
XLC | | −0.00 | Neutral | +0.07 | +0.00 | ▶ −0.20 |
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 |
Moderate expansion in nine districts; Atlanta and Chicago improved; Kansas City flat. | Two-thirds of districts noted increased hiring; Richmond cited strong labor demand. | | Inflation Pressure (higher = headwind) | | +0.00 |
Wage and price pressures contained; small increases in metals. | Loan volumes little changed; credit quality steady or improving; some relaxed standards. | Outlook positive in most districts, some expecting a pickup. |
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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 | · | · | +1 | | Health CareXLV | · | · | · | · | −1 | · | · | +1 | +1 | · | · | · | | FinancialsXLF | +1 | −1 | +1 | · | · | · | +1 | · | · | · | +1 | +1 | | Consumer DiscretionaryXLY | +1 | · | +1 | +1 | −1 | +1 | +1 | · | +1 | · | · | +1 | | Communication ServicesXLC | · | · | · | · | +1 | · | · | +1 | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | −1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | +1 | | EnergyXLE | · | · | · | +2 | +1 | +2 | · | +1 | +1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | +1 | · | · | · | | Real EstateXLRE | +1 | · | +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 Cleveland, Atlanta Robust growth in the energy sector. Why it matters: Two strong reads lift Energy. | Industrials +1 broad−based Broad-based All districts reported year-over-year increases in manufacturing. Why it matters: Industrials positive in 11 districts. | Information Technology +1 San Francisco Strong demand for cloud services; chip sales gradually increasing. Why it matters: SF carries 47% of IT weight. | Real Estate +1 broad−based Broad-based Real estate markets generally continued to improve. Why it matters: Broad positive RE. | Consumer Discretionary +1 broad−based Broad-based Retail spending up with holiday sales on plan. Why it matters: Discretionary positive. | Energy +1 Dallas, Kansas City, Richmond Oil drilling robust; gas production up slightly. Why it matters: Energy breadth. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Continues to expand modestly. |
| New York Growing +1.0 Outlook ▲ Continued at a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Rise at a modest pace. |
| Cleveland Growing +1.0 Outlook ▲ Expand at a moderate pace. |
| Richmond Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| Atlanta Growing +1.0 Outlook ▲ Improved moderately. |
| Chicago Growing +1.0 Outlook ▲ Growth rate increased. |
| St. Louis Growing +1.0 Outlook ▲ Grown at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Moderate growth. |
| Kansas City Flat Outlook ▲ Held steady. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco (+1, 47% weight) drives the weighted IT score.
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| | Energy — Two +2 reads plus Dallas (+1) push weighted Energy well above neutral.
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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 |