EconomyxAI · Sector Watch July 2014Released July 16, 2014 |
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Conditions index +0.58 avg of 11 sectors, −2 to +2 |
| Outlook index +0.32 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released July 16, 2014, with information collected before July 7, 2014. | | ■ | All twelve districts expanded; moderate in New York, Chicago, Minneapolis, Dallas and San Francisco, modest elsewhere; Boston and Richmond slowed slightly. | | ■ | Consumer spending rose in every district with strong auto sales and tourism; manufacturing expanded in all twelve, robustly in New York, Atlanta, Chicago, Minneapolis and San Francisco. | | ■ | Loan volumes rose nationwide; real estate mixed with low inventories; oil production drove energy; employment grew in all districts and price pressures stayed contained. |
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Sector prospects Where the 3–12 month view points Strongest prospects Industrials
XLI
▶ Steady | +0.78 |
| Real Estate
XLRE
▶ Steady | +0.47 |
| Information Technology
XLK
▶ Steady | +0.46 |
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| Weakest prospects Consumer Staples
XLP
▼ Turning down | −0.10 |
| Utilities
XLU
▶ Steady | −0.03 |
| Communication Services
XLC
▶ 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 | Industrials
XLI | | +0.78 | Favorable | +1.52 | +0.70 | ▶ +0.45 | | 2 | Real Estate
XLRE | | +0.47 | Leaning Favorable | +0.87 | +0.46 | ▶ +0.07 | | 3 | Information Technology
XLK | | +0.46 | Leaning Favorable | +0.59 | +0.73 | ▶ −0.11 | | 4 | Financials
XLF | | +0.46 | Leaning Favorable | +1.14 | +0.50 | ▶ +0.06 | | 5 | Consumer Discretionary
XLY | | +0.44 | Leaning Favorable | +0.98 | +0.53 | ▶ +0.06 | | 6 | Energy
XLE | | +0.38 | Leaning Favorable | +0.71 | +0.55 | ▶ −0.35 | | 7 | Materials
XLB | | +0.32 | Leaning Favorable | +0.59 | +0.00 | ▲ +0.44 | | 8 | Health Care
XLV | | +0.11 | Neutral | +0.18 | +0.00 | ▲ +0.21 | | 9 | Communication Services
XLC | | +0.03 | Neutral | +0.02 | +0.00 | ▶ −0.04 | | 10 | Utilities
XLU | | −0.03 | Neutral | +0.00 | +0.00 | ▶ −0.16 | | 11 | Consumer Staples
XLP | | −0.10 | Neutral | −0.22 | +0.00 | ▼ −0.14 |
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 | | +0.75 |
All twelve districts expanded; most optimistic. | All twelve districts reported slight to moderate employment growth. | | Inflation Pressure (higher = headwind) | | +0.25 |
Slight to modest price increases; meat, dairy, metals higher. | Loan volumes rose nationwide; credit quality stable to improving. | Most districts optimistic about growth outlook. |
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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 | | Health CareXLV | +1 | · | · | · | −1 | · | · | −1 | · | · | · | +1 | | FinancialsXLF | · | +2 | +1 | +1 | +1 | +1 | +1 | +1 | · | · | +1 | +1 | | Consumer DiscretionaryXLY | +1 | +1 | +2 | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | +1 | · | · | · | · | | IndustrialsXLI | +1 | +2 | +1 | +1 | +1 | +2 | +2 | +1 | +2 | +1 | +1 | +2 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | −1 | | EnergyXLE | · | · | +1 | · | +1 | +1 | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | +1 | +1 | +1 | +1 | +1 | −1 | · | +1 | +1 | +1 | | MaterialsXLB | · | · | · | +1 | · | · | +1 | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +2 New York, Atlanta, Chicago, Minneapolis, San Francisco Manufacturing grew at a robust pace. Why it matters: Five strong Industrials reads. | Financials +2 New York Continued increases in loan demand across all categories. Why it matters: NY carries largest Financials weight. | Consumer Discretionary +2 Philadelphia Auto sales continued at a very strong pace. Why it matters: Strong Discretionary read. | Consumer Discretionary +1 broad−based Broad-based Consumer spending increased in every district; tourism expanded. Why it matters: Discretionary positive. | Information Technology +1 San Francisco Technology services and low-end tech goods strong. Why it matters: SF carries 47% of IT weight. | Financials +1 broad−based Broad-based Loan volumes rose across the nation. Why it matters: Financials positive. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Slow economic growth overall. |
| New York Growing +1.0 Outlook ▲ Continued at a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Cleveland Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Richmond Growing +0.5 Outlook ▲ Grew modestly. |
| Atlanta Growing +0.5 Outlook ▲ Expanded modestly. |
| Chicago Growing +1.0 Outlook ▲ Growth remained moderate. |
| St. Louis Growing +0.5 Outlook ▲ Increased modestly. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▲ Expanded modestly. |
| Dallas Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Improve moderately. |
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Where the signal is thin or split Divergences to watch | Industrials — Five +2 reads including San Francisco and New York lift the weighted score above +1.
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| | Financials — New York (+2) dominates the weighted Financials score.
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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 |