EconomyxAI · Sector Watch November 2015Released December 2, 2015 |
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Conditions index +0.26 avg of 11 sectors, −2 to +2 |
| Outlook index +0.19 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released December 2, 2015, with information collected on or before November 20, 2015. | | ■ | Activity increased at a modest pace in most districts; Minneapolis moderate, Kansas City steady, New York leveled off, Boston somewhat slower. | | ■ | Consumer spending rose in nearly all districts with robust light vehicle sales; manufacturing mixed with declines in New York, Philadelphia and Minneapolis. | | ■ | Housing improved moderately, commercial construction and leasing grew, loan demand rose, and energy activity declined mildly. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▲ Turning up | +0.65 |
| Consumer Discretionary
XLY
▲ Improving | +0.47 |
| Real Estate
XLRE
▼ Turning down | +0.35 |
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| Weakest prospects Energy
XLE
▲ Turning up | −0.49 |
| Materials
XLB
▶ Steady | −0.45 |
| Consumer Staples
XLP
▶ Steady | −0.06 |
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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 | | +0.65 | Favorable | +0.99 | +0.73 | ▲ +0.29 | | 2 | Consumer Discretionary
XLY | | +0.47 | Leaning Favorable | +0.88 | +0.43 | ▲ +0.35 | | 3 | Real Estate
XLRE | | +0.35 | Leaning Favorable | +0.75 | +0.50 | ▼ −0.36 | | 4 | Financials
XLF | | +0.34 | Leaning Favorable | +0.73 | +0.50 | ▶ +0.06 | | 5 | Health Care
XLV | | +0.27 | Leaning Favorable | +0.29 | +0.50 | ▶ −0.06 | | 6 | Communication Services
XLC | | +0.25 | Leaning Favorable | +0.45 | +0.00 | ▲ +0.48 | | 7 | Industrials
XLI | | +0.21 | Leaning Favorable | +0.23 | +0.38 | ▶ +0.00 | | 8 | Utilities
XLU | | +0.10 | Neutral | +0.21 | +0.00 | ▶ +0.14 | | 9 | Consumer Staples
XLP | | −0.06 | Neutral | −0.11 | +0.00 | ▶ −0.14 | | 10 | Materials
XLB | | −0.45 | Leaning Unfavorable | −0.61 | −0.50 | ▶ −0.17 | | 11 | Energy
XLE | | −0.49 | Leaning Unfavorable | −0.92 | −0.50 | ▲ +0.06 |
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 |
Modest growth in most districts; New York leveled off, Kansas City steady. | Labor markets tightened modestly; shortages spreading to entry-level jobs. | | Inflation Pressure (higher = headwind) | | +0.00 |
Prices generally steady; commodity and energy declines. | Loan demand increased in a majority of districts; credit quality stable. | Manufacturers look for slightly improved conditions; Boston downgrading forecasts. |
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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 | +2 | | Health CareXLV | · | · | · | · | · | · | · | +1 | +1 | · | · | +1 | | FinancialsXLF | · | +1 | +1 | +1 | +1 | +1 | · | +2 | · | · | · | +1 | | Consumer DiscretionaryXLY | · | −1 | +1 | +1 | +1 | +1 | +1 | · | +1 | −1 | +1 | +2 | | Communication ServicesXLC | · | · | · | · | +1 | · | · | · | · | · | · | +1 | | IndustrialsXLI | +1 | −1 | −1 | · | +1 | +1 | · | +1 | −1 | · | +1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | −1 | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | · | −1 | · | −1 | −1 | −1 | −1 | −1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | +1 | | Real EstateXLRE | +1 | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | · | +1 | | MaterialsXLB | −1 | · | · | −2 | · | · | −1 | · | −2 | −1 | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Information Technology +2 San Francisco Cloud computing and big-data analytics drove sales higher. Why it matters: SF carries 47% of IT weight. | Materials −2 Cleveland Steel prices continued to fall; fear of severe depression in steel. Why it matters: Large Materials negative. | Materials −2 Minneapolis Major iron ore facility idles indefinitely. Why it matters: Mining collapse. | Consumer Discretionary +2 San Francisco Automobile sales were very strong. Why it matters: Large CD weight. | Energy −1 Dallas, Kansas City, St. Louis, San Francisco Energy activity declined. Why it matters: Energy negative broadly. | Financials +2 St. Louis Strongest loan demand growth. Why it matters: Financials positive. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Somewhat slower pace. |
| New York Flat Outlook ▲ Leveled off. |
| Philadelphia Growing +0.5 Outlook ▲ Grew at a modest pace. |
| Cleveland Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Richmond Growing +0.5 Outlook ▲ Strengthened modestly. |
| Atlanta Growing +0.5 Outlook ▲ Modestly improving. |
| Chicago Growing +0.5 Outlook ▲ Continued at a modest pace. |
| St. Louis Growing +0.5 Outlook ▲ Increased at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Flat Outlook ▲ Held steady on balance. |
| Dallas Growing +0.5 Outlook ▲ Grew at a modest pace. |
| San Francisco Growing +1.0 Outlook ▲ Grew at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Materials — Cleveland and Minneapolis -2 on steel and iron ore drive Materials sharply negative.
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| | Information Technology — San Francisco +2 dominates despite Boston softness.
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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 |