EconomyxAI · Beige Book Sector Monitor July 2012Released July 18, 2012 |
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Conditions index +0.39 avg of 11 sectors, −2 to +2 |
| Outlook index +0.05 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 4/11 sectors improving |
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This release in brief The read | ■ | Released July 18, 2012, with information collected before July 9, 2012. | | ■ | Activity continued to expand at a modest to moderate pace; New York, Philadelphia and Cleveland slowed and Richmond was mixed. | | ■ | Retail sales rose slightly in most districts with strong autos and tourism; housing reports were largely positive with rising rents. | | ■ | Manufacturing expanded slowly with decelerating orders, loan demand grew modestly, drought hurt crops, and price pressures eased as energy costs declined. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.46 |
| Energy
XLE
▲ Improving | +0.38 |
| Consumer Discretionary
XLY
▶ Steady | +0.12 |
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| Weakest prospects Materials
XLB
▼ Weakening | −0.13 |
| Financials
XLF
▼ Turning down | −0.08 |
| Utilities
XLU
▶ Steady | +0.00 |
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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 | Real Estate
XLRE | | +0.46 | Leaning Favorable | +0.89 | +0.50 | ▶ +0.05 | | 2 | Energy
XLE | | +0.38 | Leaning Favorable | +1.08 | +0.17 | ▲ +0.42 | | 3 | Consumer Discretionary
XLY | | +0.12 | Neutral | +0.71 | +0.04 | ▶ −0.34 | | 4 | Industrials
XLI | | +0.12 | Neutral | +0.53 | −0.04 | ▶ −0.24 | | 5 | Health Care
XLV | | +0.08 | Neutral | +0.21 | +0.00 | ▶ +0.12 | | 6 | Information Technology
XLK | | +0.05 | Neutral | +0.45 | −0.05 | ▼ −0.28 | | 7 | Consumer Staples
XLP | | +0.02 | Neutral | +0.07 | +0.00 | ▶ +0.04 | | 8 | Communication Services
XLC | | +0.01 | Neutral | +0.02 | +0.00 | ▶ −0.01 | | 9 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Financials
XLF | | −0.08 | Neutral | +0.35 | −0.08 | ▼ −0.47 | | 11 | Materials
XLB | | −0.13 | Neutral | +0.01 | +0.00 | ▼ −0.49 |
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 | | +0.25 |
Modest to moderate growth; three districts slowed; Richmond mixed. | Employment grew at a tepid pace; firms cautious amid fiscal uncertainty. | | Inflation Pressure (higher = headwind) | | +0.50 |
Input prices stabilized; price pressures easing as energy costs declined. | Loan demand grew modestly; Cleveland and Richmond weak; standards unchanged. | Contacts cautiously optimistic; expectations moderated amid Europe and fiscal uncertainty. |
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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 | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | · | +1 | −1 | · | · | +1 | · | · | +1 | +1 | +1 | | Consumer DiscretionaryXLY | · | −1 | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | +1 | · | · | · | · | · | −1 | · | · | · | | IndustrialsXLI | +1 | −1 | −1 | +1 | −1 | +1 | +1 | · | · | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | · | · | · | | EnergyXLE | · | · | +1 | · | · | +1 | · | · | · | +1 | +2 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | +1 | +1 | +1 | · | +1 | +1 | +2 | +1 | +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 Minneapolis Home sales up 27 percent; median price up 11 percent. Why it matters: Strongest Real Estate read. | Real Estate +1 broad−based Broad-based Housing reports largely positive; rents rising. Why it matters: Breadth lifts Real Estate. | Energy +2 Dallas Oil-directed drilling remains strong with growing backlogs. Why it matters: Dallas carries 45% of Energy weight. | Industrials −1 New York, Philadelphia, Richmond Pullback in new and unfilled orders; shipments declined. Why it matters: Three negatives restrain Industrials. | Consumer Discretionary +1 broad−based Broad-based Vehicle sales robust; tourism strong. Why it matters: Discretionary positive. | Consumer Discretionary −1 New York Retail sales somewhat softer. Why it matters: New York weight trims Discretionary. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▼ Expanding at a moderate pace amid uncertainty. |
| New York Growing +0.5 Outlook ▶ Growth has slowed. |
| Philadelphia Growing +0.5 Outlook ▲ Continued to improve; mixed. |
| Cleveland Growing +0.5 Outlook ▶ Expanded at a slower pace. |
| Richmond Flat Outlook ▶ Mixed reports. |
| Atlanta Growing +0.5 Outlook ▶ Expanded at a modest pace. |
| Chicago Growing +1.0 Outlook ▶ Moderate pace but slowing. |
| St. Louis Growing +0.5 Outlook ▶ Continued to expand at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +1.0 Outlook ▲ Expanded moderately. |
| Dallas Growing +1.0 Outlook ▶ Grew at a moderate pace. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a modest pace. |
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Where the signal is thin or split Divergences to watch | Industrials — New York and Philadelphia weakness pulls the weighted score below the unweighted average.
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| | Information Technology — San Francisco (+1) offsets Dallas weakness given SF's 47% weight.
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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 |