EconomyxAI · Beige Book Sector Monitor July 2010Released July 28, 2010 |
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Conditions index +0.08 avg of 11 sectors, −2 to +2 |
| Outlook index −0.04 sectors with an outlook |
| Districts growing 8/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released July 28, 2010, with information collected before July 19, 2010. | | ■ | Economic activity continued to increase on balance, but Cleveland and Kansas City said activity held steady, many gains were modest, and Atlanta and Chicago said the pace had slowed. | | ■ | Retail sales kept rising modestly with necessities selling best, but auto sales declined in most reporting districts and tourism increased despite Gulf Coast concerns. | | ■ | Manufacturing expanded in most districts but slowed or leveled off in six; housing turned sluggish after the April 30 tax-credit expiry, and commercial real estate struggled in all twelve districts. | | ■ | Banking was mixed with standards still restrictive but credit quality improving slightly in several districts; labor markets improved modestly, and Dallas energy firms laid off workers after the deepwater drilling moratorium. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Information Technology
XLK
▶ Steady | +0.12 |
| Health Care
XLV
▶ Steady | +0.06 |
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| Weakest prospects Real Estate
XLRE
▼ Turning down | −0.70 |
| Materials
XLB
▼ Weakening | −0.14 |
| Industrials
XLI
▼ Turning down | −0.07 |
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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 | | +0.30 | Leaning Favorable | +0.78 | +0.10 | ▶ +0.06 | | 2 | Information Technology
XLK | | +0.12 | Neutral | +0.65 | +0.00 | ▶ +0.01 | | 3 | Health Care
XLV | | +0.06 | Neutral | +0.14 | +0.00 | ▶ +0.10 | | 4 | Communication Services
XLC | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 5 | Utilities
XLU | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 6 | Consumer Staples
XLP | | −0.04 | Neutral | +0.00 | +0.00 | ▼ −0.18 | | 7 | Financials
XLF | | −0.05 | Neutral | −0.15 | +0.00 | ▼ −0.08 | | 8 | Consumer Discretionary
XLY | | −0.06 | Neutral | +0.23 | −0.03 | ▼ −0.53 | | 9 | Industrials
XLI | | −0.07 | Neutral | +0.48 | +0.06 | ▼ −0.81 | | 10 | Materials
XLB | | −0.14 | Neutral | −0.11 | +0.00 | ▼ −0.63 | | 11 | Real Estate
XLRE | | −0.70 | Unfavorable | −1.18 | −0.63 | ▼ −0.54 |
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 |
Activity increasing on balance; Cleveland and Kansas City steady; Atlanta and Chicago slowing. | Labor markets improved modestly; temporary hiring; energy layoffs from drilling moratorium. | | Inflation Pressure (higher = headwind) | | +0.25 |
Final and input prices largely steady; steel mixed. | Loan demand mixed; standards restrictive; credit quality improving slightly in several districts. | Outlooks more cautious; uncertainty about recovery and fiscal and financial reform restraining activity. |
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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 | · | +1 | | Health CareXLV | +1 | · | · | +1 | · | · | · | · | · | · | · | · | | FinancialsXLF | · | · | · | −1 | +1 | −1 | · | −1 | · | +1 | −1 | · | | Consumer DiscretionaryXLY | · | +1 | · | · | −1 | · | · | +1 | +1 | · | +1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | · | +1 | · | · | · | · | +1 | +1 | · | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | +1 | · | −1 | · | · | +1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | −1 | −2 | −1 | −1 | −2 | −1 | · | −1 | −2 | −1 | −1 | | MaterialsXLB | · | · | · | −1 | · | · | −1 | · | +1 | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate −2 Philadelphia, Atlanta, Kansas City Home sales fell sharply after tax credit expired. Why it matters: Real Estate falls. | Real Estate −1 All districts Commercial real estate struggled in all twelve districts. Why it matters: Broad Real Estate weakness. | Information Technology +1 San Francisco, Boston Strong semiconductor sales. Why it matters: IT positive. | Industrials +1 Dallas, San Francisco, St. Louis Aircraft sales picked up; manufacturing increased. Why it matters: Industrials positive. | Industrials 0 New York, Cleveland, Chicago, Atlanta, Richmond, Kansas City Manufacturing slowed or leveled off. Why it matters: Industrials momentum fading. | Energy +1 Dallas, Kansas City Rig counts up; production expanding. Why it matters: Energy positive. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Continues to expand with some choppiness. |
| New York Growing +1.0 Outlook ▶ Further signs of strengthening. |
| Philadelphia Growing +0.5 Outlook ▶ Moved up slightly. |
| Cleveland Flat Outlook ▶ Held steady. |
| Richmond Growing +0.5 Outlook ▶ Mixed or modestly improving. |
| Atlanta Flat Outlook ▼ Pace slowed somewhat. |
| Chicago Flat Outlook ▼ Improved but rate slowed further. |
| St. Louis Growing +1.0 Outlook ▶ Continued to improve. |
| Minneapolis Growing +0.5 Outlook ▶ Grew slightly. |
| Kansas City Flat Outlook ▲ Generally held steady. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| San Francisco Growing +0.5 Outlook ▶ Picked up slightly. |
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Where the signal is thin or split Divergences to watch | Soft Patch — recovery slowed in Atlanta, Chicago, Cleveland and Kansas City.
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| | Real Estate — post-tax-credit slump drove Real Estate back to the bottom.
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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 |