EconomyxAI · Sector Watch November 2014Released December 3, 2014 |
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Conditions index +0.40 avg of 11 sectors, −2 to +2 |
| Outlook index +0.21 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released December 3, 2014, with information collected on or before November 24, 2014. | | ■ | National activity continued to expand in October and November, with contacts optimistic about the outlook; Dallas solid, St. Louis slowed slightly, Kansas City grew slightly. | | ■ | Consumer spending advanced helped by lower gasoline prices; employment gains were widespread; manufacturing strengthened in most districts with autos and aerospace strong. | | ■ | Construction and real estate expanded unevenly; lending held steady or increased; lower oil prices became a concern in Atlanta and Dallas; inflation subdued. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▲ Improving | +0.73 |
| Industrials
XLI
▶ Steady | +0.56 |
| Consumer Discretionary
XLY
▶ Steady | +0.40 |
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| Weakest prospects Energy
XLE
▼ Weakening | −0.34 |
| Materials
XLB
▼ Weakening | −0.14 |
| Consumer Staples
XLP
▶ Steady | −0.05 |
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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 | | +0.73 | Favorable | +1.12 | +0.77 | ▲ +0.40 | | 2 | Industrials
XLI | | +0.56 | Favorable | +0.93 | +0.55 | ▶ +0.24 | | 3 | Consumer Discretionary
XLY | | +0.40 | Leaning Favorable | +0.76 | +0.45 | ▶ +0.05 | | 4 | Financials
XLF | | +0.32 | Leaning Favorable | +0.69 | +0.53 | ▶ −0.10 | | 5 | Real Estate
XLRE | | +0.30 | Leaning Favorable | +0.57 | +0.45 | ▼ −0.30 | | 6 | Health Care
XLV | | +0.10 | Neutral | +0.28 | +0.00 | ▶ +0.04 | | 7 | Communication Services
XLC | | +0.04 | Neutral | +0.05 | +0.00 | ▶ +0.01 | | 8 | Utilities
XLU | | +0.03 | Neutral | +0.09 | +0.00 | ▶ −0.03 | | 9 | Consumer Staples
XLP | | −0.05 | Neutral | −0.10 | +0.00 | ▶ −0.09 | | 10 | Materials
XLB | | −0.14 | Neutral | −0.05 | +0.00 | ▼ −0.53 | | 11 | Energy
XLE | | −0.34 | Leaning Unfavorable | +0.07 | −0.42 | ▼ −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 | | +0.50 |
Economy continued to expand; contacts optimistic. | Employment gains widespread across districts. | | Inflation Pressure (higher = headwind) | | −0.25 |
Price and wage inflation subdued; oil prices declined. | Lending improved on net; business and consumer lending increased. | Contacts optimistic; retailers optimistic for holiday season. |
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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 | +2 | · | · | · | · | · | · | +1 | +1 | · | · | +2 | | Health CareXLV | · | · | +1 | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | +1 | +1 | +1 | +1 | · | · | +1 | · | · | +1 | +1 | | Consumer DiscretionaryXLY | +1 | · | +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 | · | · | · | · | · | · | · | · | −1 | −1 | · | · | | EnergyXLE | · | · | · | +1 | +1 | −1 | · | +1 | +1 | · | · | · | | UtilitiesXLU | · | · | · | · | · | · | +1 | · | · | · | · | · | | Real EstateXLRE | · | · | · | +1 | +1 | · | +1 | · | +1 | · | +1 | +1 | | MaterialsXLB | · | · | · | +1 | · | · | −1 | · | +1 | · | +1 | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +2 San Francisco Semiconductor revenue up 8 percent; cloud demand strong. Why it matters: SF carries 47% of IT weight. | Information Technology +2 Boston Software and IT revenue up 7 to 20 percent. Why it matters: Strong IT read. | Industrials +1 broad−based Broad-based Manufacturing advanced; autos and aerospace strong. Why it matters: Industrials positive in 11 districts. | Consumer Discretionary +1 broad−based Broad-based Consumer spending advanced with lower gasoline prices. Why it matters: Discretionary positive. | Financials +1 broad−based Broad-based Lending improved on net. Why it matters: Financials positive. | Energy −1 Atlanta Oil price drop led firms to reevaluate operations. Why it matters: Energy offset. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Activity is generally increasing. |
| New York Growing +1.0 Outlook ▲ Picked up to a moderate pace. |
| Philadelphia Growing +0.5 Outlook ▲ Grow at a modest pace. |
| Cleveland Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Richmond Growing +1.0 Outlook ▲ Strengthened moderately. |
| Atlanta Growing +1.0 Outlook ▲ Improving at a steady pace. |
| Chicago Growing +1.0 Outlook ▲ Growth remained moderate. |
| St. Louis Growing +0.5 Outlook ▲ Slowed slightly. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.2 Outlook ▲ Grew slightly. |
| Dallas Growing +1.5 Outlook ▲ Expanded at a solid pace. |
| San Francisco Growing +1.0 Outlook ▲ Improve moderately. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco (+2, 47% weight) and Boston (+2) push the weighted score far above the unweighted average.
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| | Energy — Dallas at 0 and Atlanta at -1 leave weighted Energy near zero despite Midwest strength.
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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 |