EconomyxAI · Sector Watch November 2012Released November 28, 2012 |
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Conditions index +0.06 avg of 11 sectors, −2 to +2 |
| Outlook index +0.06 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 2/11 sectors improving |
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This release in brief The read | ■ | Released November 28, 2012, with information collected before November 14, 2012. | | ■ | Activity expanded at a measured pace; St. Louis and Minneapolis grew somewhat faster while Boston slowed and New York and Philadelphia weakened amid Hurricane Sandy. | | ■ | Consumer spending grew moderately in most districts but manufacturing weakened on balance, with seven districts reporting slowing or contraction. | | ■ | Housing continued to improve, loan demand was mixed to slightly stronger with better credit quality, and fiscal cliff uncertainty weighed on outlooks. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▼ Turning down | +0.31 |
| Consumer Discretionary
XLY
▶ Steady | +0.19 |
| Materials
XLB
▶ Steady | +0.06 |
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| Weakest prospects Information Technology
XLK
▼ Turning down | −0.29 |
| Industrials
XLI
▼ Turning down | −0.25 |
| Energy
XLE
▼ Turning down | −0.11 |
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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 | | +0.31 | Leaning Favorable | +0.75 | +0.41 | ▼ −0.33 | | 2 | Consumer Discretionary
XLY | | +0.19 | Leaning Favorable | +0.47 | +0.30 | ▶ +0.01 | | 3 | Materials
XLB | | +0.06 | Neutral | +0.15 | +0.00 | ▶ −0.14 | | 4 | Communication Services
XLC | | +0.01 | Neutral | +0.02 | +0.00 | ▶ −0.01 | | 5 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 6 | Consumer Staples
XLP | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.03 | | 7 | Health Care
XLV | | +0.00 | Neutral | +0.00 | +0.00 | ▶ −0.01 | | 8 | Financials
XLF | | −0.03 | Neutral | +0.02 | +0.22 | ▼ −0.35 | | 9 | Energy
XLE | | −0.11 | Neutral | +0.19 | +0.07 | ▼ −0.93 | | 10 | Industrials
XLI | | −0.25 | Leaning Unfavorable | −0.33 | −0.34 | ▼ −0.24 | | 11 | Information Technology
XLK | | −0.29 | Leaning Unfavorable | −0.62 | +0.01 | ▼ −0.58 |
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 | | +0.25 |
Measured growth; seven districts modest; St. Louis and Minneapolis stronger; Hurricane Sandy weakened New York and Philadelphia. | Modest hiring gains in most districts; wage pressures subdued. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price increases modest; construction input prices up. | Loan demand mixed to slightly stronger; credit quality improved on net. | Concern and uncertainty about the federal budget and fiscal cliff. |
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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 | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | −1 | +1 | +1 | · | +1 | +1 | · | · | +1 | · | · | | Consumer DiscretionaryXLY | · | −1 | −1 | +1 | +1 | +1 | +1 | · | +1 | · | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | +1 | · | · | · | · | | IndustrialsXLI | −1 | −1 | −1 | +1 | +1 | −1 | −1 | +1 | −1 | −1 | · | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | · | +1 | · | · | +1 | −1 | · | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | · | −1 | +1 | +1 | +1 | +1 | +1 | +2 | +1 | +1 | +1 | | MaterialsXLB | · | · | · | −1 | · | · | · | · | · | · | · | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials −1 Seven districts Manufacturing activity slowed or declined. Why it matters: Broad Industrials weakness. | Information Technology −1 San Francisco Slowdown continued for makers of IT equipment. Why it matters: SF carries 47% of IT weight. | Real Estate +2 Minneapolis Construction and real estate growing at a double-digit clip. Why it matters: Strongest Real Estate read. | Real Estate +1 broad−based Broad-based Single-family markets continued to improve in most districts. Why it matters: Breadth supports Real Estate. | Financials −1 New York Weakening loan demand and increased delinquencies. Why it matters: New York holds 28% of Financials weight. | Consumer Discretionary −1 New York, Philadelphia Hurricane Sandy disrupted retail and tourism. Why it matters: Two high-weight districts restrain Discretionary. |
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Twelve Fed districts District roundup Boston Flat Outlook ▼ Growth somewhat slower. |
| New York Contracting −1.0 Outlook ▶ Weakened largely due to Sandy. |
| Philadelphia Contracting −0.5 Outlook ▼ Weakness exacerbated by hurricane. |
| Cleveland Growing +0.5 Outlook ▼ Grew at a modest pace. |
| Richmond Growing +0.5 Outlook ▶ Strengthened at a tempered pace. |
| Atlanta Growing +0.5 Outlook ▶ Increasing marginally. |
| Chicago Growing +0.5 Outlook ▼ Continued to expand at a slow pace. |
| St. Louis Growing +1.0 Outlook ▲ Continued to expand at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Moderate growth. |
| Kansas City Growing +0.5 Outlook ▲ Expanded modestly. |
| Dallas Growing +0.5 Outlook ▶ Expanded at a modest 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 | Information Technology — San Francisco (-1, 47% weight) drags the weighted IT score below zero.
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| | Financials — New York (-1) offsets gains elsewhere given its 28% weight.
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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 |