EconomyxAI · Sector Watch May 2015Released June 3, 2015 |
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Conditions index +0.23 avg of 11 sectors, −2 to +2 |
| Outlook index +0.17 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released June 3, 2015, with information collected on or before May 22, 2015. | | ■ | Activity expanded across most districts; moderate in Richmond, Chicago, Minneapolis and San Francisco, modest in New York, Philadelphia and St. Louis. | | ■ | Manufacturing flat to up overall with Kansas City declining markedly; the strong dollar and energy weakness weighed on metals and exports. | | ■ | Consumer spending, autos, tourism and real estate improved; loan demand rose; oil and gas drilling kept declining. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Discretionary
XLY
▲ Turning up | +0.57 |
| Information Technology
XLK
▶ Steady | +0.55 |
| Real Estate
XLRE
▶ Steady | +0.51 |
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| Weakest prospects | Materials
XLB
▶ Steady | −0.13 |
| Industrials
XLI
▶ 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 | Consumer Discretionary
XLY | | +0.57 | Favorable | +0.96 | +0.50 | ▲ +0.34 | | 2 | Information Technology
XLK | | +0.55 | Favorable | +0.84 | +0.69 | ▶ +0.13 | | 3 | Real Estate
XLRE | | +0.51 | Favorable | +0.87 | +0.50 | ▶ +0.21 | | 4 | Financials
XLF | | +0.45 | Leaning Favorable | +0.98 | +0.50 | ▶ +0.01 | | 5 | Communication Services
XLC | | +0.23 | Leaning Favorable | +0.40 | +0.00 | ▲ +0.45 | | 6 | Health Care
XLV | | +0.06 | Neutral | +0.21 | +0.00 | ▶ −0.03 | | 7 | Utilities
XLU | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.09 | | 8 | Consumer Staples
XLP | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.06 | | 9 | Industrials
XLI | | −0.02 | Neutral | +0.08 | +0.17 | ▶ −0.35 | | 10 | Materials
XLB | | −0.13 | Neutral | −0.43 | +0.00 | ▶ +0.02 | | 11 | Energy
XLE | | −0.62 | Unfavorable | −1.36 | −0.48 | ▶ −0.10 |
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 |
Most districts expanded at a modest to moderate pace; Kansas City and Cleveland slight, Dallas slowed. | Employment up slightly overall; wages rose slightly. | | Inflation Pressure (higher = headwind) | | +0.00 |
Prices stable to up slightly. | Loan demand increased, strongly in New York; credit quality stable or improved. | Contacts generally optimistic, though energy and export-related firms cautious. |
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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 | +2 | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | +1 | +1 | +2 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | · | +1 | | Consumer DiscretionaryXLY | +1 | −1 | +1 | · | +1 | +1 | +1 | +1 | +1 | · | +1 | +2 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | +1 | | IndustrialsXLI | +1 | · | · | · | · | +1 | +1 | +1 | · | −2 | −1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | −1 | −1 | · | −1 | −1 | −1 | −2 | −1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | · | +1 | +1 | +1 | +1 | +1 | +2 | +1 | · | +1 | | MaterialsXLB | · | · | −1 | · | −1 | · | · | −1 | −1 | −1 | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy −2 Dallas Oil and gas drilling continued to decline. Why it matters: Dallas carries the largest Energy weight. | Information Technology +2 San Francisco Semiconductor demand picked up; record biotech M&A. Why it matters: SF carries 47% of IT weight. | Industrials −2 Kansas City Manufacturing activity fell markedly. Why it matters: Largest Industrials negative. | Energy −1 Atlanta, Minneapolis, Kansas City, San Francisco Drilling declines persisted. Why it matters: Broad Energy weakness. | Financials +2 New York Loan demand increased strongly. Why it matters: NY carries large Financials weight. | Consumer Discretionary +2 San Francisco Strong auto sales, entertainment and gaming. Why it matters: Large CD weight. |
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Twelve Fed districts District roundup Boston Flat Outlook ▲ Mixed conditions. |
| New York Growing +0.5 Outlook ▲ Expanded modestly. |
| Philadelphia Growing +0.5 Outlook ▲ Continued to grow modestly. |
| Cleveland Growing +0.5 Outlook ▲ Expanded slightly. |
| Richmond Growing +1.0 Outlook ▲ Grew moderately. |
| Atlanta Growing +0.5 Outlook ▲ Remained steady. |
| Chicago Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▶ Expanded slightly. |
| Dallas Growing +0.5 Outlook ▶ Growth slowed slightly. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco +2 (47% weight) dominates despite Dallas softening.
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| | Energy — Dallas -2 with its large energy weight drives the weighted score well below 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 |