EconomyxAI · Beige Book Sector Monitor October 2006Released October 12, 2006 |
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Conditions index +0.29 avg of 11 sectors, −2 to +2 |
| Outlook index +0.09 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released October 12, 2006, with information collected before early October 2006 (date not printed in the PDF). | | ■ | Activity continued to expand; four districts said growth firmed, a couple said it cooled, and the rest described growth as moderate or mixed. | | ■ | Consumer spending picked up in a number of districts on solid back-to-school and apparel sales, but auto and home-related sales stayed sluggish; tourism was strong. | | ■ | Manufacturing held up well with output up in eight districts, commercial construction gained strength, and residential real estate cooled widely with lower asking prices and rising inventories. | | ■ | Labor markets remained taut with skilled-worker shortages; energy prices moderated and most districts saw few signs of increased price pressure. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Discretionary
XLY
▲ Improving | +0.52 |
| Industrials
XLI
▶ Steady | +0.46 |
| Energy
XLE
▼ Turning down | +0.38 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.45 |
| Consumer Staples
XLP
▶ Steady | +0.00 |
| Utilities
XLU
▶ Steady | +0.00 |
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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 | Consumer Discretionary
XLY | | +0.52 | Favorable | +0.49 | +0.50 | ▲ +0.65 | | 2 | Industrials
XLI | | +0.46 | Leaning Favorable | +0.79 | +0.50 | ▶ +0.01 | | 3 | Energy
XLE | | +0.38 | Leaning Favorable | +0.87 | +0.50 | ▼ −0.39 | | 4 | Information Technology
XLK | | +0.37 | Leaning Favorable | +0.57 | +0.50 | ▶ −0.02 | | 5 | Health Care
XLV | | +0.08 | Neutral | +0.29 | +0.00 | ▶ −0.04 | | 6 | Financials
XLF | | +0.08 | Neutral | +0.33 | +0.00 | ▲ +0.10 | | 7 | Materials
XLB | | +0.05 | Neutral | +0.06 | +0.00 | ▶ −0.18 | | 8 | Communication Services
XLC | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Consumer Staples
XLP | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Real Estate
XLRE | | −0.45 | Leaning Unfavorable | −0.26 | −1.00 | ▶ −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 | | +0.75 |
Expansion continued; four districts firmed, two cooled, the rest moderate or mixed. | Labor markets taut; tight in five districts and steady to stronger job growth elsewhere; shortages of technical workers. | | Inflation Pressure (higher = headwind) | | −0.25 |
Price pressures contained in most districts; energy prices moderated; raw material increases in three districts; scattered pass-through. | Commercial lending picked up in seven districts, offset by weaker mortgage lending; tighter commercial standards in New York and Chicago. | Consumer spending firmer; Chicago and Minneapolis contacts worry commercial construction may slow. |
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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 | | Health CareXLV | +1 | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | · | +1 | +1 | · | · | · | · | · | · | +1 | +1 | | Consumer DiscretionaryXLY | · | +1 | +1 | · | +1 | +1 | · | · | · | +1 | +1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | 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 | · | +1 | · | | MaterialsXLB | · | · | · | · | · | +1 | +1 | · | · | · | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate −1 Boston, Cleveland, Richmond, Atlanta, Chicago, Minneapolis Home sales and prices falling. Why it matters: Broad Real Estate drag. | Consumer Discretionary +1 New York, Philadelphia, Richmond, Atlanta, Kansas City, Dallas Retail sales picked up as gasoline prices fell. Why it matters: Discretionary support. | Energy +1 Dallas Rig count flat as natural gas glut builds. Why it matters: Largest Energy weight. | Industrials +1 broad−based Broad-based Manufacturing expanded in nine districts. Why it matters: Industrials support. | Industrials −1 Philadelphia Manufacturing activity edged down. Why it matters: Industrials drag. | Financials +1 Dallas, San Francisco Commercial loan demand remained strong. Why it matters: Financials support. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Somewhat mixed. |
| New York Growing +1.0 Outlook ▲ Signs of strengthening. |
| Philadelphia Flat Outlook ▶ Increased; growth slowed. |
| Cleveland Flat Outlook ▶ Modest, mixed growth. |
| Richmond Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| Atlanta Flat Outlook ▶ Mixed. |
| Chicago Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Expanded modestly. |
| Minneapolis Growing +0.5 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▲ Expanded moderately, firming. |
| Dallas Growing +0.5 Outlook ▲ Continued to cool from high levels. |
| San Francisco Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
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Where the signal is thin or split Divergences to watch | Real Estate — Seven -1s produce the weakest weighted Real Estate score of the year.
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| | Energy — Dallas's drop from +2 to +1 lowers the weighted Energy score noticeably.
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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 |