| Sector prospects from the Fed’s regional reports | |
EconomyxAI · Beige Book Sector Monitor November 2016Released November 30, 2016 | | | Conditions index +0.29 avg of 11 sectors, −2 to +2 |
| Outlook index +0.37 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 8/11 sectors improving |
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| This release in brief The read | ■ | Released November 30, 2016, with information collected on or before November 18, 2016. | | ■ | Economy continued to expand across most regions; Boston, Minneapolis and San Francisco moderate, four modest, three slight, Richmond mixed, New York flat. | | ■ | Manufacturing mixed with the strong dollar a headwind; business services rose, especially high-tech and IT; retail sales higher but new vehicle sales declined. | | ■ | Residential real estate improved, nonresidential expanded, banking stable with better loan demand, and oil and gas drilling increased slightly. |
| Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.52 |
| Information Technology
XLK
▶ Steady | +0.46 |
| Industrials
XLI
▶ Steady | +0.38 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | +0.01 |
| Utilities
XLU
▶ Steady | +0.07 |
| Materials
XLB
▶ Steady | +0.09 |
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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 | | +0.52 | Favorable | +1.06 | +0.48 | ▶ +0.02 | | 2 | Information Technology
XLK | | +0.46 | Leaning Favorable | +0.67 | +0.50 | ▶ +0.25 | | 3 | Industrials
XLI | | +0.38 | Leaning Favorable | +0.36 | +0.65 | ▶ +0.15 | | 4 | Financials
XLF | | +0.31 | Leaning Favorable | +0.57 | +0.50 | ▶ −0.04 | | 5 | Energy
XLE | | +0.26 | Leaning Favorable | +0.17 | +0.50 | ▶ +0.35 | | 6 | Consumer Discretionary
XLY | | +0.23 | Leaning Favorable | +0.14 | +0.44 | ▶ +0.17 | | 7 | Communication Services
XLC | | +0.22 | Leaning Favorable | +0.40 | +0.00 | ▲ +0.40 | | 8 | Health Care
XLV | | +0.19 | Leaning Favorable | +0.08 | +0.50 | ▶ −0.14 | | 9 | Materials
XLB | | +0.09 | Neutral | −0.40 | +0.50 | ▶ −0.09 | | 10 | Utilities
XLU | | +0.07 | Neutral | +0.16 | +0.00 | ▶ +0.09 | | 11 | Consumer Staples
XLP | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.07 |
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 |
Expansion across most regions; three moderate, four modest, three slight. | Labor markets tightening in seven districts; modest employment growth. | | Inflation Pressure (higher = headwind) | | +0.25 |
Slight upward pressure on overall prices; building materials up. | Banking stable with some improvement in loan demand. | Outlooks mainly positive; six districts expect moderate growth. |
| 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 | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | +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 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | +1 | · | · | · | −1 | +1 | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | +1 | · | · | · | | Real EstateXLRE | +1 | · | · | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | +2 | | MaterialsXLB | · | · | · | −1 | · | · | · | −1 | −1 | · | · | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
| Top highlights What moved the scores Real Estate +2 San Francisco Real estate conditions particularly strong. Why it matters: Large RE weight. | Information Technology +1 Richmond, St. Louis, Kansas City, Dallas, San Francisco High-tech and IT services expanded. Why it matters: IT broad-based. | Industrials +1 Boston, New York, Atlanta, Chicago, St. Louis Modest or moderate manufacturing growth. Why it matters: Industrials positive. | Consumer Discretionary +1 Boston, Minneapolis, San Francisco Retail sales expanded at a moderate pace. Why it matters: CD positive in large districts. | Consumer Discretionary −1 Cleveland, Richmond, Kansas City, Dallas Weakening sales; auto sales fell markedly. Why it matters: CD offsets. | Materials −1 Cleveland, St. Louis, Minneapolis, San Francisco Strong dollar pressures steel; coal and iron ore down. Why it matters: Materials negative. |
| Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Ongoing moderate growth. |
| New York Flat Outlook ▲ Remained flat. |
| Philadelphia Growing +0.2 Outlook ▲ Grow slightly. |
| Cleveland Growing +0.2 Outlook ▶ Grew slightly. |
| Richmond Flat Outlook ▲ Mixed signals. |
| Atlanta Growing +0.5 Outlook ▲ Modestly improving. |
| Chicago Growing +0.5 Outlook ▲ Slowed to a modest pace. |
| St. Louis Growing +0.5 Outlook ▲ Modestly improved. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.2 Outlook ▲ Increased slightly. |
| Dallas Growing +0.5 Outlook ▲ Expanded modestly. |
| San Francisco Growing +1.0 Outlook ▲ Moderate pace. |
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| Where the signal is thin or split Divergences to watch | Real Estate — San Francisco +2 drives RE above other sectors.
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| | Information Technology — Broad +1 reads with SF positive lift IT.
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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 |
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