EconomyxAI · Beige Book Sector Monitor May 2012Released June 6, 2012 |
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Conditions index +0.52 avg of 11 sectors, −2 to +2 |
| Outlook index +0.27 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 6, 2012, with information collected on or before May 25, 2012. | | ■ | Activity expanded at a moderate pace; Philadelphia slowed slightly and outlooks became somewhat more guarded. | | ■ | Manufacturing continued to expand with autos and steel strongest; consumer spending was unchanged to up modestly while new vehicle sales stayed strong and tourism expanded. | | ■ | Residential and commercial real estate improved, loan demand and credit conditions improved, energy drilling expanded except coal, and cost pressures eased as energy prices fell. |
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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 | +0.51 |
| Financials
XLF
▶ Steady | +0.42 |
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| Weakest prospects Utilities
XLU
▶ Steady | +0.02 |
| Consumer Staples
XLP
▶ Steady | +0.03 |
| Communication Services
XLC
▶ Steady | +0.06 |
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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 | +1.04 | +0.56 | ▲ +0.51 | | 2 | Information Technology
XLK | | +0.51 | Favorable | +0.72 | +0.70 | ▶ −0.01 | | 3 | Financials
XLF | | +0.42 | Leaning Favorable | +0.85 | +0.47 | ▶ +0.29 | | 4 | Industrials
XLI | | +0.41 | Leaning Favorable | +0.78 | +0.41 | ▶ −0.07 | | 5 | Consumer Discretionary
XLY | | +0.38 | Leaning Favorable | +0.80 | +0.42 | ▼ −0.10 | | 6 | Energy
XLE | | +0.28 | Leaning Favorable | +0.69 | +0.40 | ▶ −0.24 | | 7 | Health Care
XLV | | +0.15 | Neutral | +0.28 | +0.00 | ▲ +0.28 | | 8 | Materials
XLB | | +0.15 | Neutral | +0.42 | +0.00 | ▶ −0.19 | | 9 | Communication Services
XLC | | +0.06 | Neutral | +0.07 | +0.00 | ▶ +0.06 | | 10 | Consumer Staples
XLP | | +0.03 | Neutral | +0.05 | +0.00 | ▶ +0.05 | | 11 | Utilities
XLU | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 |
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 |
Moderate growth in seven districts; modest in three; Philadelphia slowed slightly. | Hiring steady or slightly higher; labor market tightening for skilled workers. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price inflation modest; cost pressures eased as energy prices declined. | Loan demand and credit conditions improved in most districts; NY small banks most broad-based increase since mid-1990s. | Outlooks positive but slightly more guarded; Europe and fiscal uncertainty. |
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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 | +1 | | Health CareXLV | · | · | · | · | +1 | · | · | · | · | · | · | +1 | | FinancialsXLF | +1 | +1 | +1 | +1 | +1 | +1 | · | · | · | +1 | +1 | +1 | | Consumer DiscretionaryXLY | +1 | +1 | +1 | +1 | · | +1 | · | +1 | +1 | · | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | +1 | · | | IndustrialsXLI | · | +1 | · | +1 | · | +1 | +1 | · | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | −1 | · | +1 | · | | EnergyXLE | · | · | +1 | · | · | +1 | +1 | −1 | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +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 Real Estate +2 Kansas City Residential sales much improved; vacancy rates fell. Why it matters: Strongest Real Estate read. | Real Estate +1 broad−based Broad-based Activity in residential and commercial real estate improved. Why it matters: Breadth lifts Real Estate. | Financials +1 New York Most broad-based increase in loan demand since the mid-1990s. Why it matters: New York holds 28% of Financials weight. | Financials +1 broad−based Broad-based Lenders noted improvement in loan demand and credit conditions. Why it matters: Financials strengthen. | Information Technology +1 San Francisco, Dallas Semiconductor and high-tech orders continued to grow. Why it matters: SF carries 47% of IT weight. | Industrials +1 broad−based Broad-based Manufacturing continued to expand; autos and steel strongest. Why it matters: Industrials positive. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▶ Continues to expand with steady growth. |
| New York Growing +1.0 Outlook ▲ Continued to expand at a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Continues to improve but pace slowed. |
| Cleveland Growing +1.0 Outlook ▲ Grown at a moderate pace. |
| Richmond Growing +0.5 Outlook ▶ Improved modestly. |
| Atlanta Growing +1.0 Outlook ▲ Continued to expand at a moderate pace. |
| Chicago Growing +1.0 Outlook ▶ Moderate pace, touch slower. |
| St. Louis Growing +0.5 Outlook ▲ Continued to grow at a modest pace. |
| Minneapolis Growing +0.5 Outlook ▲ Modest to firm pace. |
| Kansas City Growing +1.0 Outlook ▲ Improved moderately. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Continued to grow at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Real Estate — Broad-based positive reads make weighted and unweighted scores similar.
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| | Financials — New York (+1, 28% weight) supports a strong 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 |