EconomyxAI · Beige Book Sector Monitor June 2017Released July 12, 2017 |
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Conditions index +0.39 avg of 11 sectors, −2 to +2 |
| Outlook index +0.28 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released July 12, 2017, with information collected on or before June 30, 2017. | | ■ | All twelve districts expanded at a slight to moderate pace; Chicago picked up to moderate, Philadelphia slowed to slight. | | ■ | Consumer spending rose in most districts on nonauto retail and tourism, but auto sales declined in half the districts. | | ■ | Manufacturing and services grew modestly to moderately; loan demand steady to higher; energy improved; labor markets tightened further. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.56 |
| Industrials
XLI
▶ Steady | +0.44 |
| Information Technology
XLK
▶ Steady | +0.39 |
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| Weakest prospects Consumer Discretionary
XLY
▶ Steady | −0.11 |
| Communication Services
XLC
▶ Steady | +0.02 |
| Consumer Staples
XLP
▶ Steady | +0.07 |
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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 | | +0.56 | Favorable | +1.17 | +0.50 | ▶ +0.05 | | 2 | Industrials
XLI | | +0.44 | Leaning Favorable | +0.93 | +0.50 | ▶ −0.02 | | 3 | Information Technology
XLK | | +0.39 | Leaning Favorable | +0.58 | +0.50 | ▶ +0.01 | | 4 | Energy
XLE | | +0.37 | Leaning Favorable | +0.72 | +0.45 | ▶ −0.20 | | 5 | Materials
XLB | | +0.25 | Leaning Favorable | +0.29 | +0.50 | ▼ −0.25 | | 6 | Financials
XLF | | +0.24 | Leaning Favorable | +0.35 | +0.50 | ▶ −0.28 | | 7 | Health Care
XLV | | +0.14 | Neutral | +0.21 | +0.00 | ▶ +0.32 | | 8 | Utilities
XLU | | +0.11 | Neutral | +0.21 | +0.00 | ▶ +0.21 | | 9 | Consumer Staples
XLP | | +0.07 | Neutral | +0.05 | +0.00 | ▶ +0.05 | | 10 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ −0.03 | | 11 | Consumer Discretionary
XLY | | −0.11 | Neutral | −0.26 | +0.11 | ▶ −0.37 |
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 |
All twelve districts expanded, slight to moderate. | Labor markets tightened further for low- and high-skilled positions. | | Inflation Pressure (higher = headwind) | | +0.25 |
Prices rose modestly; a few districts saw pressures ease. | Loan demand steady to increasing in most districts. | Most districts expected modest to moderate gains ahead. |
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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 | +2 | · | · | +1 | · | | Consumer DiscretionaryXLY | · | · | −1 | −1 | +1 | −1 | +1 | +1 | −1 | +1 | · | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | +1 | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | +1 | +1 | +1 | · | · | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | +1 | | Real EstateXLRE | +1 | +1 | · | +1 | +1 | +1 | +1 | +1 | · | · | +1 | +2 | | MaterialsXLB | · | · | · | · | · | · | +1 | +1 | · | · | +1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate +2 San Francisco Residential housing market robust; extremely high presales. Why it matters: SF carries large Real Estate weight. | Industrials +1 broad−based Broad-based Manufacturing grew in eleven districts. Why it matters: Industrials positive nearly everywhere. | Financials +2 St. Louis Lending expanded at a robust pace, outpacing the nation. Why it matters: Strong Financials read. | Information Technology +1 San Francisco Consumer and business services grew at a strong pace. Why it matters: SF carries 47% of IT weight. | Consumer Discretionary −1 San Francisco Auto demand softened further; restaurant sales sluggish. Why it matters: SF weight trims Discretionary. | Energy +1 Dallas, Atlanta, Kansas City Oilfield services improved; refineries at record levels; rigs up. Why it matters: Energy positive with Dallas weight. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| New York Growing +0.5 Outlook ▲ Growth picked up to a modest pace. |
| Philadelphia Flat Outlook ▲ Slowed to a slight pace. |
| Cleveland Growing +0.5 Outlook ▲ Slowed to a modest pace. |
| Richmond Growing +0.5 Outlook ▲ Expanded modestly, somewhat faster. |
| Atlanta Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Chicago Growing +1.0 Outlook ▲ Picked up to a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Slightly improved. |
| Minneapolis Growing +0.5 Outlook ▲ Modest growth. |
| Kansas City Growing +1.0 Outlook ▲ Expanded moderately. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Continued at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — SF -1 with a large weight pulls the weighted score below the unweighted average.
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| | Information Technology — San Francisco +1 at 47% weight with Boston, Cleveland and Kansas City keeps IT positive.
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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 |