EconomyxAI · Sector Watch November 2006Released November 29, 2006 |
| |
Conditions index +0.28 avg of 11 sectors, −2 to +2 |
| Outlook index +0.18 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 4/11 sectors improving |
|
|
This release in brief The read | ■ | Released November 29, 2006, with information collected before mid-November 2006 (date not printed in the PDF). | | ■ | Most districts reported continued moderate growth; New York and Richmond said growth accelerated, Dallas kept decelerating from high levels and Atlanta was mixed. | | ■ | Consumer spending rose in October and early November despite soft autos and home-related goods, and the holiday outlook was cautiously optimistic; tourism was strong. | | ■ | Manufacturing was positive overall with high-tech production up, but orders for homebuilding materials trailed off substantially; housing kept slowing while nonresidential markets improved. | | ■ | Labor markets stayed tight for high-skilled occupations with moderate wage growth; prices for construction materials and energy moderated in most districts. |
|
Sector prospects Where the 3–12 month view points Strongest prospects Financials
XLF
▶ Steady | +0.46 |
| Information Technology
XLK
▶ Steady | +0.41 |
| |
|
| Weakest prospects Real Estate
XLRE
▶ Steady | −0.46 |
| Materials
XLB
▶ Steady | −0.08 |
| Utilities
XLU
▶ Steady | −0.00 |
|
|
|
|
All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
|---|
| 1 | Financials
XLF | | +0.46 | Leaning Favorable | +0.54 | +0.50 | ▶ +0.43 | | 2 | Information Technology
XLK | | +0.41 | Leaning Favorable | +0.64 | +0.50 | ▶ +0.09 | | 3 | Energy
XLE | | +0.39 | Leaning Favorable | +0.81 | +0.50 | ▶ −0.26 | | 4 | Consumer Discretionary
XLY | | +0.38 | Leaning Favorable | +0.46 | +0.50 | ▶ +0.28 | | 5 | Health Care
XLV | | +0.31 | Leaning Favorable | +0.36 | +0.50 | ▶ +0.04 | | 6 | Industrials
XLI | | +0.23 | Leaning Favorable | +0.52 | +0.50 | ▼ −0.24 | | 7 | Consumer Staples
XLP | | +0.05 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 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 | Materials
XLB | | −0.08 | Neutral | −0.04 | +0.00 | ▶ −0.20 | | 11 | Real Estate
XLRE | | −0.46 | Leaning Unfavorable | −0.24 | −1.00 | ▶ −0.05 |
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 most districts; New York and Richmond accelerated; Dallas decelerated from high levels. | Labor markets tight for high-skilled occupations; retailers struggling to fill holiday positions; Chicago little changed. | | Inflation Pressure (higher = headwind) | | +0.00 |
Prices for construction materials and energy moderated; fuel surcharges declining; some input and finished goods increases in Richmond and Chicago. | Mortgage originations fewer; C&I stable or slightly higher; small delinquency increases; tighter standards in St. Louis and Richmond. | Holiday retail outlook cautiously optimistic; weak housing conditions expected to persist. |
|
Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
|---|
| Information TechnologyXLK | +1 | · | · | · | · | · | · | · | · | · | +1 | +1 | | Health CareXLV | +1 | · | · | · | +1 | · | · | · | · | · | · | +1 | | FinancialsXLF | · | +1 | · | · | · | · | · | · | · | +1 | +1 | +1 | | Consumer DiscretionaryXLY | · | +1 | +1 | · | +1 | · | · | +1 | +1 | +1 | −1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | · | · | +1 | · | · | +1 | +1 | +1 | · | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +1 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | · | · | −1 | · | −1 | −1 | · | · | · | · | · | | MaterialsXLB | · | · | · | · | · | · | −1 | · | +1 | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
|
Top highlights What moved the scores Real Estate −1 Cleveland, Atlanta, Chicago Housing weak; construction declining. Why it matters: Real Estate drag. | Real Estate 0 New York, Boston, San Francisco Commercial strength offset weak housing. Why it matters: Removes October's broad drag. | Financials +1 New York Finance strong; bonuses up over 15%. Why it matters: Largest Financials weight. | Information Technology +1 San Francisco, Boston Semiconductors solid; software up double digits. Why it matters: IT positive. | Industrials +1 Boston, Richmond, San Francisco Manufacturing solid; aircraft at full capacity. Why it matters: Industrials support. | Consumer Discretionary +1 New York, Richmond, Boston Retail brisk; tourism strong. Why it matters: Discretionary support. |
|
Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Upbeat; retail softening. |
| New York Growing +1.0 Outlook ▲ Growth accelerated. |
| Philadelphia Growing +0.5 Outlook ▲ Improved slightly. |
| Cleveland Growing +0.5 Outlook ▲ Moderate growth. |
| Richmond Growing +1.0 Outlook ▲ Economy strengthened. |
| Atlanta Flat Outlook ▶ Mixed. |
| Chicago Growing +0.5 Outlook ▲ Modest growth. |
| St. Louis Growing +0.5 Outlook ▲ Moderate growth. |
| Minneapolis Growing +0.5 Outlook ▲ Economy grew. |
| Kansas City Growing +0.5 Outlook ▲ Moderate expansion. |
| Dallas Flat Outlook ▶ Growth decelerated. |
| San Francisco Growing +0.5 Outlook ▲ Moderate expansion. |
|
|
Where the signal is thin or split Divergences to watch | Real Estate — Commercial strength lifts Real Estate from seven -1s in October to three -1s.
|
| | Consumer Discretionary — Dallas's -1 trims a broad +1 reading.
|
|
|
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 |