EconomyxAI · Beige Book Sector Monitor June 2007Released June 13, 2007 |
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Conditions index +0.29 avg of 11 sectors, −2 to +2 |
| Outlook index +0.18 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released June 13, 2007, with information collected before late May 2007 (date not printed in the PDF). | | ■ | Activity continued to expand from mid-April through May; seven districts described growth as modest or moderate, Dallas moderately strong, Philadelphia and Richmond picking up, and Minneapolis edging up. | | ■ | Consumer spending was generally up with luxury goods outselling lower-end items, auto sales were little changed, and tourism stayed healthy despite higher gas prices. | | ■ | Manufacturing rose in most districts with strength in machinery and equipment, trucking declined widely, and residential real estate stayed weak while commercial real estate strengthened. | | ■ | Hiring picked up, especially for specialized skills, without a rise in overall wage pressure; energy and selected raw materials prices rose significantly. |
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Sector prospects Where the 3–12 month view points Strongest prospects Financials
XLF
▲ Improving | +0.53 |
| | Information Technology
XLK
▲ Turning up | +0.43 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.09 |
| Consumer Staples
XLP
▶ Steady | −0.05 |
| 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 | Financials
XLF | | +0.53 | Favorable | +0.61 | +0.50 | ▲ +0.61 | | 2 | Energy
XLE | | +0.45 | Leaning Favorable | +0.67 | +0.50 | ▶ −0.01 | | 3 | Information Technology
XLK | | +0.43 | Leaning Favorable | +0.54 | +0.50 | ▲ +0.26 | | 4 | Industrials
XLI | | +0.34 | Leaning Favorable | +0.50 | +0.50 | ▶ +0.28 | | 5 | Health Care
XLV | | +0.30 | Leaning Favorable | +0.39 | +0.50 | ▶ −0.04 | | 6 | Consumer Discretionary
XLY | | +0.15 | Neutral | +0.38 | +0.00 | ▼ −0.23 | | 7 | Materials
XLB | | +0.08 | Neutral | +0.00 | +0.00 | ▶ +0.04 | | 8 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Consumer Staples
XLP | | −0.05 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Real Estate
XLRE | | −0.09 | Neutral | +0.12 | −0.50 | ▶ +0.18 |
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 |
Expansion continued; seven districts modest or moderate, Dallas moderately strong, Philadelphia and Richmond picked up. | Hiring picked up, especially for specialized skills; homebuilding-related layoffs continued; wage pressures not increasing. | | Inflation Pressure (higher = headwind) | | −0.50 |
Significant increases for energy and selected raw materials; overall price pressures not increasing. | Half the districts saw little or no change in loan demand; commercial strength offset mortgage and consumer weakness; delinquencies up in three districts. | Manufacturers in New York and Philadelphia optimistic; realtors expect housing weakness for several more months; gas prices a summer concern. |
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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 | | Health CareXLV | +1 | · | · | +1 | · | · | · | +1 | · | · | · | +1 | | FinancialsXLF | · | +1 | +1 | · | +1 | · | · | · | · | · | +1 | +1 | | Consumer DiscretionaryXLY | · | +1 | · | −1 | · | · | · | +1 | +1 | · | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | · | −1 | · | · | · | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | · | · | · | · | −1 | · | · | · | · | · | | MaterialsXLB | · | · | · | · | · | · | · | · | · | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Financials +1 New York Strong hiring at Wall Street firms; mortgage demand up. Why it matters: Largest Financials weight. | Industrials +1 broad−based Broad-based Manufacturing shipments and orders rose. Why it matters: Industrials support. | Industrials −1 Richmond Manufacturing continued to pull back. Why it matters: Industrials drag. | Information Technology +1 San Francisco, Boston IT services robust; software revenue up double digits. Why it matters: IT positive. | Consumer Discretionary −1 Cleveland Retail sales disappointing on weather and gas prices. Why it matters: Discretionary drag. | Consumer Discretionary +1 New York, San Francisco Sales close to plan; luxury items strong. Why it matters: Discretionary support. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Generally positive, except retail and tourism. |
| New York Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| Philadelphia Growing +1.0 Outlook ▲ Improved; growth somewhat faster. |
| Cleveland Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Richmond Growing +0.5 Outlook ▲ Growth picked up a bit. |
| Atlanta Growing +0.5 Outlook ▲ Expanded modestly. |
| Chicago Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| St. Louis Growing +0.5 Outlook ▲ Expanded modestly. |
| Minneapolis Growing +0.5 Outlook ▲ Edged up. |
| Kansas City Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderately strong pace. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Financials — New York's swing from -1 to +1 lifts weighted Financials sharply.
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| | Industrials — A broad +1 returns after two reports of mixed readings.
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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 |