EconomyxAI · Sector Watch October 2010Released October 20, 2010 |
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Conditions index +0.30 avg of 11 sectors, −2 to +2 |
| Outlook index +0.04 sectors with an outlook |
| Districts growing 8/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released October 20, 2010, with information collected before October 8, 2010. | | ■ | National economic activity continued to rise at a modest pace from September to early October. | | ■ | Consumer spending was steady to up slightly but price-sensitive, new vehicle sales held steady or rose with strong used-car demand, and travel and tourism picked up. | | ■ | Manufacturing kept expanding in most districts except Philadelphia and Richmond, helped by exports, semiconductors and strong auto output; housing stayed weak and commercial real estate subdued. | | ■ | Lending was stable with some pickup in Richmond and Dallas; energy kept expanding, input costs for agricultural commodities and metals rose, and final prices stayed mostly stable. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Materials
XLB
▲ Improving | +0.41 |
| Industrials
XLI
▲ Turning up | +0.37 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.44 |
| Health Care
XLV
▶ Steady | −0.01 |
| 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 | Energy
XLE | | +0.58 | Favorable | +1.45 | +0.26 | ▶ +0.34 | | 2 | Materials
XLB | | +0.41 | Leaning Favorable | +0.69 | +0.00 | ▲ +0.60 | | 3 | Industrials
XLI | | +0.37 | Leaning Favorable | +0.87 | +0.17 | ▲ +0.41 | | 4 | Consumer Discretionary
XLY | | +0.34 | Leaning Favorable | +0.46 | +0.50 | ▶ +0.17 | | 5 | Information Technology
XLK | | +0.19 | Leaning Favorable | +0.66 | +0.00 | ▶ −0.01 | | 6 | Financials
XLF | | +0.13 | Neutral | +0.10 | +0.00 | ▲ +0.47 | | 7 | Consumer Staples
XLP | | +0.08 | Neutral | +0.14 | +0.00 | ▶ +0.01 | | 8 | Communication Services
XLC | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Utilities
XLU | | −0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Health Care
XLV | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.07 | | 11 | Real Estate
XLRE | | −0.44 | Leaning Unfavorable | −1.04 | −0.50 | ▶ +0.15 |
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 |
Activity continued to rise at a modest pace. | Hiring limited; firms reluctant to add permanent payrolls; temporary help used. | | Inflation Pressure (higher = headwind) | | +0.00 |
Input costs for agricultural commodities and metals rose; final prices stable. | Lending stable at low levels; competition for quality loans picking up; credit quality little changed. | Outlooks positive but uncertainty about growth, regulation and policy adds caution. |
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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 | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | · | | FinancialsXLF | · | · | · | · | +1 | −1 | +1 | · | · | −1 | +1 | · | | Consumer DiscretionaryXLY | +1 | +1 | +1 | · | −1 | −1 | · | · | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | −1 | +2 | −1 | · | +2 | +1 | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | +1 | · | · | · | · | · | · | · | +1 | · | | EnergyXLE | · | · | · | +1 | · | +1 | · | · | +1 | +2 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | −1 | · | −1 | · | −2 | −1 | · | −1 | −2 | −1 | −1 | | MaterialsXLB | · | · | · | +1 | · | · | +2 | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy +2 Dallas Strong land-based drilling offset Gulf moratorium. Why it matters: Large Energy weight. | Industrials +2 Cleveland, Chicago Auto production rose strongly. Why it matters: Industrials lead. | Materials +2 Chicago Metals sales strongest year-to-date. Why it matters: Materials positive. | Energy +2 Kansas City Energy expansion supporting hiring and capex. Why it matters: Energy broad. | Information Technology +1 San Francisco, Boston, Dallas Semiconductor and high-tech sales growth. Why it matters: IT positive. | Real Estate −2 Atlanta, Kansas City Home sales weakened further; inventories rising. Why it matters: Real Estate bottom. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Continues to exceed year-earlier levels. |
| New York Growing +0.5 Outlook ▲ Continued to expand at a modest pace. |
| Philadelphia Flat Outlook ▲ Mixed. |
| Cleveland Flat Outlook ▲ Held steady. |
| Richmond Flat Outlook ▲ Mixed. |
| Atlanta Flat Outlook ▲ Remained slow. |
| Chicago Growing +1.0 Outlook ▲ Picked up moderately. |
| St. Louis Growing +0.5 Outlook ▲ Expanded modestly. |
| Minneapolis Growing +1.0 Outlook ▲ Picked up somewhat. |
| Kansas City Growing +0.5 Outlook ▲ Moderate but uneven growth. |
| Dallas Growing +0.5 Outlook ▲ Expanded at a more subdued pace. |
| San Francisco Growing +0.5 Outlook ▲ Further modest growth. |
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Where the signal is thin or split Divergences to watch | Commodities — Energy and Materials led as metals and drilling strengthened.
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| | Real Estate — still the weakest sector.
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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 |