EconomyxAI · Sector Watch October 2011Released October 19, 2011 |
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Conditions index +0.19 avg of 11 sectors, −2 to +2 |
| Outlook index +0.05 sectors with an outlook |
| Districts growing 9/12 per National Summary |
| Positive momentum 4/11 sectors improving |
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This release in brief The read | ■ | Released October 19, 2011, with information collected on or before October 7, 2011. | | ■ | Activity continued to expand in September, but many districts called growth modest or slight and outlooks were weaker or less certain. | | ■ | Consumer spending rose slightly, led by autos and tourism as Japan-related supply problems eased; non-auto retail was flat to down in many districts. | | ■ | Manufacturing and transportation increased on balance with strong auto and aerospace output, while Richmond, Philadelphia and Atlanta manufacturing declined. | | ■ | Loan demand moved lower apart from refinancing, credit tightened in Chicago, energy and mining strengthened, and cost pressures eased. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▲ Turning up | +0.64 |
| Consumer Discretionary
XLY
▲ Turning up | +0.25 |
| Materials
XLB
▶ Steady | +0.09 |
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| Weakest prospects Financials
XLF
▶ Steady | −0.33 |
| Information Technology
XLK
▶ Steady | −0.07 |
| Health Care
XLV
▼ Turning down | −0.03 |
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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 | | +0.64 | Favorable | +1.23 | +0.79 | ▲ +0.30 | | 2 | Consumer Discretionary
XLY | | +0.25 | Leaning Favorable | +0.64 | +0.23 | ▲ +0.34 | | 3 | Materials
XLB | | +0.09 | Neutral | +0.31 | +0.00 | ▶ −0.16 | | 4 | Industrials
XLI | | +0.07 | Neutral | +0.25 | +0.09 | ▶ −0.33 | | 5 | Consumer Staples
XLP | | −0.01 | Neutral | +0.06 | +0.00 | ▶ +0.13 | | 6 | Utilities
XLU | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Communication Services
XLC | | −0.03 | Neutral | −0.02 | +0.00 | ▶ −0.05 | | 8 | Real Estate
XLRE | | −0.03 | Neutral | +0.00 | −0.12 | ▲ +0.17 | | 9 | Health Care
XLV | | −0.03 | Neutral | +0.04 | +0.00 | ▼ −0.16 | | 10 | Information Technology
XLK | | −0.07 | Neutral | +0.01 | −0.05 | ▶ −0.17 | | 11 | Financials
XLF | | −0.33 | Leaning Unfavorable | −0.40 | −0.34 | ▶ −0.21 |
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 |
Expansion continued but described as modest or slight in many districts. | Labor markets little changed; limited, selective hiring; skill shortages. | | Inflation Pressure (higher = headwind) | | +0.00 |
Cost pressures eased in most districts; commodity prices declined; some pass-through of earlier increases. | Financial activity weakened; loan volumes flat or down; Chicago credit tightened further. | Contacts noted weaker or less certain outlooks; caution weighing on spending plans. |
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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 | · | · | · | · | · | · | · | +1 | · | · | · | · | | FinancialsXLF | · | −1 | · | +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 | | Consumer StaplesXLP | −1 | · | · | · | · | · | +1 | · | · | · | · | · | | EnergyXLE | · | · | · | +1 | · | −1 | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | · | · | · | −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 Energy +2 Dallas Energy sector continued to expand at a strong pace. Why it matters: Dallas carries 45% of Energy weight. | Financials −1 New York Securities industry noticeably weaker; layoffs anticipated. Why it matters: New York holds 28% of Financials weight. | Consumer Discretionary +1 San Francisco, New York Auto sales showed the largest improvements; retail sales expanded. Why it matters: Two high-weight districts lift Discretionary. | Industrials −1 Philadelphia, Richmond, Atlanta Manufacturing orders and production declined. Why it matters: Three negatives restrain Industrials. | Industrials +1 Chicago Production rebounded; orders and backlogs increased. Why it matters: Chicago carries 14% of Industrials weight. | Information Technology −1 Dallas Consumer electronics producers reduced semiconductor orders. Why it matters: Offsets Boston and Minneapolis strength. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▼ Demand growth but toned-down outlooks. |
| New York Growing +0.5 Outlook ▶ Growth remained modest. |
| Philadelphia Flat Outlook ▶ Remained mixed. |
| Cleveland Growing +0.5 Outlook ▶ Increased slowly. |
| Richmond Contracting −1.0 Outlook ▼ Weak or weakening in most sectors. |
| Atlanta Growing +0.5 Outlook ▶ Expanded at a modest pace. |
| Chicago Growing +1.0 Outlook ▶ Pace picked up some. |
| St. Louis Flat Outlook ▶ Mixed. |
| Minneapolis Growing +0.5 Outlook ▲ Increased modestly. |
| Kansas City Growing +0.5 Outlook ▲ Improved slightly. |
| Dallas Growing +0.5 Outlook ▼ Expanded 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 | Financials — New York (-1, 28% weight) again pushes the weighted score below the unweighted average.
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| | Consumer Discretionary — San Francisco's improvement (+1, 26% weight) lifts the weighted score.
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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 |