EconomyxAI · Sector Watch July 2015Released July 15, 2015 |
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Conditions index +0.36 avg of 11 sectors, −2 to +2 |
| Outlook index +0.30 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 9/11 sectors improving |
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This release in brief The read | ■ | Released July 15, 2015, with information collected on or before July 3, 2015. | | ■ | All twelve districts expanded; modest in New York, Philadelphia and Kansas City, moderate in seven others, steady in Cleveland. | | ■ | Consumer spending rose everywhere with strong auto sales; manufacturing uneven with declines in Cleveland, Kansas City and Dallas on the strong dollar and oil weakness. | | ■ | Residential and commercial real estate positive, lending increased, drilling kept declining, prices steady. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▲ Improving | +0.66 |
| Information Technology
XLK
▶ Steady | +0.60 |
| Consumer Discretionary
XLY
▶ Steady | +0.54 |
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| Weakest prospects Energy
XLE
▲ Turning up | −0.12 |
| Materials
XLB
▶ Steady | −0.07 |
| Utilities
XLU
▶ 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 | Real Estate
XLRE | | +0.66 | Favorable | +1.14 | +0.58 | ▲ +0.38 | | 2 | Information Technology
XLK | | +0.60 | Favorable | +0.93 | +0.73 | ▶ +0.09 | | 3 | Consumer Discretionary
XLY | | +0.54 | Favorable | +0.95 | +0.49 | ▶ +0.29 | | 4 | Health Care
XLV | | +0.32 | Leaning Favorable | +0.32 | +0.50 | ▶ +0.14 | | 5 | Financials
XLF | | +0.31 | Leaning Favorable | +0.73 | +0.50 | ▶ −0.18 | | 6 | Industrials
XLI | | +0.26 | Leaning Favorable | +0.20 | +0.41 | ▶ +0.00 | | 7 | Communication Services
XLC | | +0.18 | Leaning Favorable | +0.40 | +0.00 | ▶ +0.17 | | 8 | Consumer Staples
XLP | | +0.16 | Leaning Favorable | +0.29 | +0.00 | ▲ +0.34 | | 9 | Utilities
XLU | | +0.03 | Neutral | +0.03 | +0.00 | ▶ +0.05 | | 10 | Materials
XLB | | −0.07 | Neutral | −0.31 | +0.00 | ▶ +0.14 | | 11 | Energy
XLE | | −0.12 | Neutral | −0.72 | +0.05 | ▲ +0.60 |
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; seven at a moderate pace. | Employment increased or steady; tightness in several districts. | | Inflation Pressure (higher = headwind) | | +0.00 |
Input and finished goods prices steady. | Lending activity increased; delinquencies low. | Contacts in five districts optimistic about future growth. |
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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 | +2 | | Health CareXLV | +1 | · | · | · | +1 | · | · | −1 | · | · | · | +1 | | FinancialsXLF | +1 | · | +1 | +1 | +1 | +1 | · | +1 | · | · | +1 | +2 | | Consumer DiscretionaryXLY | +1 | · | +1 | · | +1 | +1 | +1 | · | +1 | +1 | · | +2 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | +1 | · | +1 | −1 | +1 | +1 | +1 | +1 | · | −1 | −1 | · | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | · | · | · | · | +1 | | EnergyXLE | · | · | · | −1 | · | −1 | · | −1 | −1 | −1 | −1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | +1 | · | · | · | | Real EstateXLRE | +1 | +1 | · | +1 | +1 | +1 | +1 | +1 | +2 | +1 | · | +2 | | MaterialsXLB | · | · | · | −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 Technology services sector continued to expand at a solid clip. Why it matters: SF carries 47% of IT weight. | Real Estate +2 San Francisco, Minneapolis Real estate expanded at a solid pace; bidding wars. Why it matters: Large RE weight in SF. | Financials +2 San Francisco Lending growth broad based; asset quality improved. Why it matters: Large FN weight. | Consumer Discretionary +2 San Francisco Automobile sales remained robust across the District. Why it matters: Large CD weight. | Consumer Discretionary +1 broad−based Broad-based Consumer spending increased across all Districts. Why it matters: Discretionary positive nationally. | Industrials −1 Cleveland, Kansas City, Dallas Manufacturing activity declined. Why it matters: Offsets broader Industrials gains. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Stable or improving. |
| New York Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Philadelphia Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Cleveland Growing +0.5 Outlook ▲ Steady level of activity. |
| Richmond Growing +1.0 Outlook ▲ Strengthened moderately. |
| Atlanta Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Chicago Growing +1.0 Outlook ▲ Moderate growth. |
| St. Louis Growing +1.0 Outlook ▲ Increased at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▲ Increased modestly. |
| Dallas Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Grew at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco +2 dominates the weighted IT score.
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| | Consumer Discretionary — San Francisco +2 robust auto sales lifts the weighted score above the unweighted average.
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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 |