EconomyxAI · Sector Watch May 2013Released June 5, 2013 |
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Conditions index +0.36 avg of 11 sectors, −2 to +2 |
| Outlook index +0.23 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 June 5, 2013, with information collected on or before May 24, 2013. | | ■ | Activity increased at a modest to moderate pace in all districts except Dallas, which reported strong growth. | | ■ | Manufacturing expanded in most districts, consumer spending rose slightly to moderately with moderate vehicle sales gains, and business services expanded. | | ■ | Residential real estate and construction rose at a moderate to strong pace in all districts, bank lending increased, energy was flat and mining down. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.65 |
| Industrials
XLI
▲ Turning up | +0.45 |
| Consumer Discretionary
XLY
▲ Improving | +0.42 |
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| Weakest prospects Information Technology
XLK
▼ Turning down | −0.11 |
| Communication Services
XLC
▼ Turning down | −0.07 |
| Materials
XLB
▶ Steady | +0.02 |
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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 | | +0.65 | Favorable | +1.31 | +0.56 | ▶ +0.13 | | 2 | Industrials
XLI | | +0.45 | Leaning Favorable | +0.69 | +0.43 | ▲ +0.19 | | 3 | Consumer Discretionary
XLY | | +0.42 | Leaning Favorable | +0.84 | +0.43 | ▲ +0.33 | | 4 | Financials
XLF | | +0.25 | Leaning Favorable | +0.49 | +0.50 | ▶ −0.14 | | 5 | Energy
XLE | | +0.21 | Leaning Favorable | +0.26 | +0.78 | ▼ −0.46 | | 6 | Utilities
XLU | | +0.11 | Neutral | +0.21 | +0.00 | ▶ +0.21 | | 7 | Health Care
XLV | | +0.05 | Neutral | +0.04 | +0.00 | ▶ +0.14 | | 8 | Consumer Staples
XLP | | +0.04 | Neutral | +0.00 | +0.00 | ▶ +0.18 | | 9 | Materials
XLB | | +0.02 | Neutral | +0.06 | +0.00 | ▶ −0.12 | | 10 | Communication Services
XLC | | −0.07 | Neutral | −0.02 | +0.00 | ▼ −0.42 | | 11 | Information Technology
XLK | | −0.11 | Neutral | +0.03 | −0.20 | ▼ −0.34 |
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 |
Modest to moderate in all districts except Dallas, which reported strong growth. | Hiring increased at a measured pace; labor markets tightened in places. | | Inflation Pressure (higher = headwind) | | +0.00 |
Level prices to mild increases. | Bank lending increased; credit quality and deposits rose. | Outlooks generally positive; New York near-term outlook waned. |
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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 | · | · | +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 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | +1 | −1 | −1 | · | · | −1 | +1 | · | +1 | −1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | +1 | | Real EstateXLRE | +1 | +2 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +2 | +2 | +1 | | MaterialsXLB | · | · | · | · | · | · | −1 | · | −1 | · | · | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate +2 New York, Minneapolis, Kansas City, Dallas Residential sales and construction strong; permits doubled. Why it matters: Strongest Real Estate reads. | Real Estate +1 broad−based All districts Residential real estate increased at a moderate to strong pace in all districts. Why it matters: Breadth lifts Real Estate. | Industrials +1 broad−based Broad-based Manufacturing expanded in most districts. Why it matters: Industrials positive. | Financials +1 New York Increased loan demand; narrowing spreads; declining delinquencies. Why it matters: New York holds 28% of Financials weight. | Consumer Discretionary +1 broad−based Broad-based Consumer spending increased; vehicle sales moderate gains. Why it matters: Discretionary positive. | Energy +1 Dallas Texas rig count increased; strong global demand. Why it matters: Dallas carries 45% of Energy weight. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Increases; software slowing. |
| New York Growing +1.0 Outlook ▶ Continued to expand at a moderate pace. |
| Philadelphia Growing +1.0 Outlook ▲ Accelerated to moderate growth. |
| Cleveland Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| Richmond Growing +0.5 Outlook ▲ Strengthened modestly. |
| Atlanta Growing +0.5 Outlook ▲ Improved modestly. |
| Chicago Growing +0.5 Outlook ▶ Expanded at a modest pace. |
| St. Louis Growing +1.0 Outlook ▶ Expanded at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Moderate growth. |
| Kansas City Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Dallas Growing +1.5 Outlook ▲ Expanded at a stronger pace. |
| San Francisco Growing +0.5 Outlook ▶ Expanded at a modest pace. |
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Where the signal is thin or split Divergences to watch | Real Estate — Four +2 reads including New York lift the weighted score well above neutral.
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| | Information Technology — San Francisco at 0 leaves IT near neutral despite small positive districts.
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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 |