EconomyxAI · Sector Watch November 2013Released December 4, 2013 |
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Conditions index +0.42 avg of 11 sectors, −2 to +2 |
| Outlook index +0.27 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 8/11 sectors improving |
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This release in brief The read | ■ | Released December 4, 2013, with information collected on or before November 22, 2013. | | ■ | Activity expanded at a modest to moderate pace; seven districts moderate, Philadelphia, Chicago, Kansas City and San Francisco modest. | | ■ | Manufacturing expanded with gains in motor vehicles and high tech; retail spending positive and auto sales moderate to strong; freight strengthened. | | ■ | Residential real estate improved with strong multifamily construction; banking stable with some easing of standards; prices and wages contained. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▶ Steady | +0.52 |
| Industrials
XLI
▲ Turning up | +0.51 |
| Real Estate
XLRE
▼ Weakening | +0.39 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | −0.04 |
| Communication Services
XLC
▼ Turning down | +0.00 |
| Health Care
XLV
▶ Steady | +0.04 |
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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 | Information Technology
XLK | | +0.52 | Favorable | +0.66 | +0.77 | ▶ +0.06 | | 2 | Industrials
XLI | | +0.51 | Favorable | +1.00 | +0.47 | ▲ +0.31 | | 3 | Real Estate
XLRE | | +0.39 | Leaning Favorable | +0.80 | +0.56 | ▼ −0.37 | | 4 | Energy
XLE | | +0.38 | Leaning Favorable | +0.72 | +0.52 | ▶ +0.03 | | 5 | Consumer Discretionary
XLY | | +0.36 | Leaning Favorable | +0.84 | +0.44 | ▶ +0.06 | | 6 | Financials
XLF | | +0.19 | Leaning Favorable | +0.22 | +0.27 | ▶ +0.31 | | 7 | Utilities
XLU | | +0.11 | Neutral | +0.21 | +0.00 | ▶ +0.21 | | 8 | Materials
XLB | | +0.09 | Neutral | +0.18 | +0.00 | ▶ +0.11 | | 9 | Health Care
XLV | | +0.04 | Neutral | −0.04 | +0.00 | ▶ +0.20 | | 10 | Communication Services
XLC | | +0.00 | Neutral | +0.07 | +0.00 | ▼ −0.17 | | 11 | Consumer Staples
XLP | | −0.04 | Neutral | −0.05 | +0.00 | ▶ −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 |
Modest to moderate expansion; seven districts moderate. | Hiring modestly increased or unchanged; shortages of skilled workers. | | Inflation Pressure (higher = headwind) | | +0.00 |
Price inflation contained; residential construction materials rising. | Banking stable; loan demand improved somewhat; some easing of standards; credit quality improved. | Manufacturers optimistic about near-term growth; retailers hopeful but 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 | · | · | +1 | +1 | · | · | +1 | +1 | · | · | +1 | | Health CareXLV | · | · | · | · | · | · | · | −1 | · | · | · | · | | FinancialsXLF | +1 | · | +1 | · | −1 | +1 | · | −1 | · | · | −1 | +1 | | Consumer DiscretionaryXLY | +1 | +2 | +1 | +1 | +1 | · | · | +1 | +1 | · | +1 | +1 | | Communication ServicesXLC | · | · | · | · | +1 | · | · | +1 | · | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | −1 | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | +1 | · | +1 | · | +1 | +1 | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | +1 | | Real EstateXLRE | +1 | · | +1 | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | | MaterialsXLB | −1 | · | −1 | −1 | · | · | −1 | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Consumer Discretionary +2 New York New auto sales up 20 percent or more; retail ahead of plan. Why it matters: Large NY weight lifts Discretionary. | Industrials +1 broad−based Broad-based Manufacturing expanded in most districts; autos and aerospace strong. Why it matters: Industrials positive in all 12 districts. | Information Technology +1 San Francisco, Boston Semiconductor demand up; software and IT services strong. Why it matters: SF carries 47% of IT weight. | Real Estate +1 broad−based Broad-based Residential activity improved; multifamily construction strong. Why it matters: Broad positive RE. | Consumer Discretionary +1 broad−based Broad-based Consumer spending increased in almost all districts. Why it matters: Discretionary positive. | Energy +1 Dallas, Minneapolis, Cleveland, Kansas City Energy activity strong; wet-gas production rose sharply. Why it matters: Energy positive with Dallas weight. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Continues to expand. |
| New York Growing +1.0 Outlook ▲ Continued at a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Rise at a modest pace. |
| Cleveland Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Richmond Growing +1.0 Outlook ▲ Expanded moderately. |
| Atlanta Growing +1.0 Outlook ▲ Moderately increasing. |
| Chicago Growing +0.5 Outlook ▲ Modest but slowed a bit. |
| St. Louis Growing +1.0 Outlook ▲ Expanded at a moderate pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| Kansas City Growing +0.5 Outlook ▲ Grow modestly. |
| Dallas Growing +1.0 Outlook ▲ Expanded at a moderate 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) drives the weighted score above the unweighted average.
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| | Consumer Discretionary — New York (+2) lifts the weighted score; Atlanta, Chicago and Kansas City flat.
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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 |