EconomyxAI · Sector Watch July 2013Released July 17, 2013 |
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Conditions index +0.52 avg of 11 sectors, −2 to +2 |
| Outlook index +0.31 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 8/11 sectors improving |
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This release in brief The read | ■ | Released July 17, 2013, with information collected on or before July 8, 2013. | | ■ | Activity continued to increase at a modest to moderate pace; Dallas expanded slightly faster. | | ■ | Manufacturing expanded in most districts except Kansas City; consumer spending and auto sales increased; tourism strong in places despite weather. | | ■ | Residential real estate rose at a moderate to strong pace everywhere, commercial real estate improved, banking conditions improved, and price pressures stayed stable. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▲ Turning up | +0.86 |
| Real Estate
XLRE
▲ Turning up | +0.72 |
| Industrials
XLI
▶ Steady | +0.53 |
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| Weakest prospects Health Care
XLV
▶ Steady | −0.00 |
| Utilities
XLU
▶ Steady | +0.00 |
| Communication Services
XLC
▶ 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 | Information Technology
XLK | | +0.86 | Favorable | +1.19 | +0.73 | ▲ +0.96 | | 2 | Real Estate
XLRE | | +0.72 | Favorable | +1.58 | +0.48 | ▲ +0.27 | | 3 | Industrials
XLI | | +0.53 | Favorable | +0.86 | +0.49 | ▶ +0.34 | | 4 | Energy
XLE | | +0.42 | Leaning Favorable | +0.50 | +0.78 | ▶ +0.06 | | 5 | Consumer Discretionary
XLY | | +0.37 | Leaning Favorable | +0.70 | +0.45 | ▶ +0.01 | | 6 | Financials
XLF | | +0.28 | Leaning Favorable | +0.52 | +0.50 | ▶ −0.04 | | 7 | Materials
XLB | | +0.11 | Neutral | +0.35 | +0.00 | ▲ +0.24 | | 8 | Consumer Staples
XLP | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.11 | | 9 | Communication Services
XLC | | +0.01 | Neutral | +0.07 | +0.00 | ▶ −0.12 | | 10 | Utilities
XLU | | +0.00 | Neutral | +0.03 | +0.00 | ▶ −0.07 | | 11 | Health Care
XLV | | −0.00 | Neutral | −0.04 | +0.00 | ▶ +0.01 |
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 increase across districts. | Hiring steady or increased at a measured pace; reluctance on permanent hires. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price pressures stable or modest; construction materials up. | Banking conditions improved; loan demand up modestly; rising rates shifting to purchase mortgages. | Manufacturers broadly optimistic for second half in several districts. |
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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 | · | +2 | | Health CareXLV | · | · | · | · | · | · | · | −1 | · | · | · | · | | FinancialsXLF | · | · | +1 | +1 | +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 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | · | +1 | −1 | −1 | +1 | · | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | +1 | · | · | · | | Real EstateXLRE | +1 | +2 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +2 | +2 | +2 | | MaterialsXLB | · | · | · | −1 | · | · | · | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +2 San Francisco Substantial increases in new orders for semiconductors. Why it matters: SF carries 47% of IT weight. | Real Estate +2 New York, San Francisco, Dallas, Minneapolis, Kansas City Strong residential markets; low inventories; rising prices. Why it matters: Five strong reads drive Real Estate. | Industrials +1 broad−based Broad-based Manufacturing increased in most districts. Why it matters: Industrials positive across 11 districts. | Financials +1 broad−based Broad-based Overall loan demand increased modestly; credit quality improved. Why it matters: Financials positive. | Consumer Discretionary +1 Philadelphia, Richmond, Atlanta, Chicago, San Francisco Strong auto sales. Why it matters: Discretionary positive. | Consumer Discretionary −1 New York Retail sales softened in May and June. Why it matters: NY weight trims Discretionary. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Expand at a moderate pace. |
| New York Growing +1.0 Outlook ▲ Continued to expand moderately. |
| Philadelphia Growing +1.0 Outlook ▲ Maintained a moderate pace. |
| Cleveland Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Richmond Growing +1.0 Outlook ▲ Strengthened moderately. |
| Atlanta Growing +0.5 Outlook ▶ Expanded at a modest pace. |
| Chicago Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| St. Louis Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Moderate growth. |
| Kansas City Growing +0.5 Outlook ▲ Grew modestly. |
| Dallas Growing +1.0 Outlook ▶ Slightly stronger 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 | Information Technology — San Francisco (+2, 47% weight) pushes the weighted IT score far above the unweighted average.
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| | Real Estate — Five +2 reads including New York and San Francisco lift the weighted score strongly.
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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 |