EconomyxAI · Sector Watch October 2015Released October 14, 2015 |
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Conditions index +0.13 avg of 11 sectors, −2 to +2 |
| Outlook index +0.18 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 2/11 sectors improving |
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This release in brief The read | ■ | Released October 14, 2015, with information collected on or before October 5, 2015. | | ■ | Modest expansion overall; moderate in Minneapolis, Dallas and San Francisco, slowing in Richmond and Chicago, and a slight decline in Kansas City. | | ■ | Manufacturing generally sluggish with declines in New York, Philadelphia, Atlanta and Kansas City; the strong dollar, steel weakness and energy drag weighed on factories. | | ■ | Housing and commercial real estate improved, banking positive, energy weakened further, prices stable. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.61 |
| Information Technology
XLK
▼ Turning down | +0.33 |
| Consumer Discretionary
XLY
▶ Steady | +0.32 |
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| Weakest prospects Energy
XLE
▼ Turning down | −0.79 |
| Materials
XLB
▶ Steady | −0.21 |
| Communication Services
XLC
▶ 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 | Real Estate
XLRE | | +0.61 | Favorable | +1.20 | +0.56 | ▶ +0.12 | | 2 | Information Technology
XLK | | +0.33 | Leaning Favorable | +0.47 | +0.73 | ▼ −0.46 | | 3 | Consumer Discretionary
XLY | | +0.32 | Leaning Favorable | +0.53 | +0.47 | ▶ −0.20 | | 4 | Health Care
XLV | | +0.29 | Leaning Favorable | +0.33 | +0.50 | ▶ −0.01 | | 5 | Financials
XLF | | +0.21 | Leaning Favorable | +0.49 | +0.50 | ▼ −0.30 | | 6 | Utilities
XLU | | +0.07 | Neutral | +0.13 | +0.00 | ▶ +0.12 | | 7 | Industrials
XLI | | −0.03 | Neutral | +0.02 | +0.00 | ▼ −0.30 | | 8 | Consumer Staples
XLP | | −0.04 | Neutral | +0.00 | +0.00 | ▶ −0.18 | | 9 | Communication Services
XLC | | −0.06 | Neutral | −0.06 | +0.00 | ▶ −0.26 | | 10 | Materials
XLB | | −0.21 | Leaning Unfavorable | −0.44 | +0.00 | ▶ −0.07 | | 11 | Energy
XLE | | −0.79 | Unfavorable | −1.27 | −0.78 | ▼ −0.57 |
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 expansion; Kansas City declined slightly; pace slowed in Richmond and Chicago. | Labor markets tightened with shortages of skilled workers; wage growth subdued. | | Inflation Pressure (higher = headwind) | | +0.00 |
Prices little changed or up slightly; energy and metals declining. | Lending increased; loan quality steady to improved; standards little changed or easier. | Contacts generally optimistic; KC manufacturers' expectations lowest since 2009. |
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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 | · | · | · | +1 | | FinancialsXLF | · | · | +1 | +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 | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | · | −1 | · | −1 | −1 | −2 | −2 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | +1 | +2 | | 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 Financial positions of many firms continue to deteriorate. Why it matters: Dallas carries the largest Energy weight. | Energy −2 Kansas City Energy activity contracted moderately; expectations fell sharply. Why it matters: Second-largest Energy negative. | Real Estate +1 broad−based Broad-based Commercial real estate strengthened in all twelve Districts. Why it matters: Real Estate broadly positive. | Real Estate +2 San Francisco Real estate activity picked up further. Why it matters: Large RE weight. | Industrials −1 New York, Philadelphia, Atlanta, Kansas City Manufacturing activity declined. Why it matters: Industrials pulled toward neutral. | Materials −1 Cleveland, Chicago Steel industry struggles against strong dollar and China. Why it matters: Materials negative. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Activity continues to increase. |
| New York Growing +0.5 Outlook ▲ Continued at a modest pace. |
| Philadelphia Growing +0.5 Outlook ▲ Grow at a modest pace. |
| Cleveland Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Richmond Growing +0.5 Outlook ▲ Growth moderated. |
| Atlanta Growing +0.5 Outlook ▲ Improving at a modest pace. |
| Chicago Growing +0.5 Outlook ▲ Slowed to a more modest pace. |
| St. Louis Growing +0.5 Outlook ▲ Increased at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Contracting −0.5 Outlook ▼ Eased slightly. |
| Dallas Growing +1.0 Outlook ▲ Grew at a moderate 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 | Energy — Dallas -2 dominates the weighted Energy score.
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| | Real Estate — San Francisco +2 lifts the weighted RE score above the unweighted average.
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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 |