EconomyxAI · Beige Book Sector Monitor October 2016Released October 19, 2016 |
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Conditions index +0.23 avg of 11 sectors, −2 to +2 |
| Outlook index +0.31 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released October 19, 2016, with information collected on or before October 7, 2016. | | ■ | Activity continued to expand at a modest or moderate pace; New York flat; growth improved in St. Louis, Kansas City and Dallas. | | ■ | Manufacturing quite varied with gains in Boston, Philadelphia, Chicago, Kansas City and Dallas; the strong dollar continued to damp exports. | | ■ | Real estate expanded further, loan demand increased with strong credit quality, and the oil and gas sector showed signs of stabilization. |
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Sector prospects Where the 3–12 month view points Strongest prospects Information Technology
XLK
▲ Improving | +0.54 |
| Real Estate
XLRE
▶ Steady | +0.54 |
| Energy
XLE
▲ Improving | +0.39 |
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| Weakest prospects Materials
XLB
▶ Steady | −0.14 |
| Consumer Staples
XLP
▶ Steady | −0.05 |
| Utilities
XLU
▶ Steady | −0.01 |
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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 | Information Technology
XLK | | +0.54 | Favorable | +0.68 | +0.50 | ▲ +0.60 | | 2 | Real Estate
XLRE | | +0.54 | Favorable | +1.09 | +0.50 | ▶ +0.04 | | 3 | Energy
XLE | | +0.39 | Leaning Favorable | +0.17 | +0.50 | ▲ +0.75 | | 4 | Consumer Discretionary
XLY | | +0.36 | Leaning Favorable | +0.34 | +0.45 | ▲ +0.51 | | 5 | Industrials
XLI | | +0.24 | Leaning Favorable | +0.19 | +0.50 | ▶ −0.09 | | 6 | Health Care
XLV | | +0.23 | Leaning Favorable | +0.16 | +0.50 | ▶ −0.08 | | 7 | Financials
XLF | | +0.21 | Leaning Favorable | +0.44 | +0.50 | ▼ −0.27 | | 8 | Communication Services
XLC | | +0.04 | Neutral | +0.00 | +0.00 | ▶ +0.07 | | 9 | Utilities
XLU | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.07 | | 10 | Consumer Staples
XLP | | −0.05 | Neutral | −0.15 | +0.00 | ▶ −0.04 | | 11 | Materials
XLB | | −0.14 | Neutral | −0.34 | +0.00 | ▶ −0.17 |
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 |
Modest or moderate pace in most districts; improvement in three. | Labor markets tight; modest employment and wage growth. | | Inflation Pressure (higher = headwind) | | +0.25 |
Price growth mild; prices increased slightly on net. | Loan demand increased; credit quality strong or improved. | Outlooks mostly positive; election uncertainty cited. |
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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 | +1 | | Health CareXLV | · | · | +1 | · | · | · | · | · | · | · | +1 | · | | FinancialsXLF | +1 | · | +1 | · | · | · | +1 | +2 | · | · | · | +1 | | Consumer DiscretionaryXLY | · | · | · | · | +1 | · | · | +1 | +1 | −1 | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | −1 | +1 | · | −1 | −1 | +1 | · | · | +1 | +1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | −1 | · | −1 | · | · | · | | EnergyXLE | · | · | · | +1 | · | · | · | −1 | +1 | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | · | · | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | | MaterialsXLB | · | · | · | −1 | · | · | · | −1 | · | · | · | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Real Estate +2 San Francisco Real estate activity grew at a strong pace. Why it matters: Large RE weight. | Financials +2 St. Louis C&I loans up 28 percent. Why it matters: Financials lift. | Information Technology +1 San Francisco Semiconductor activity grew steadily. Why it matters: SF IT returns positive. | Energy +1 Cleveland, Minneapolis, Kansas City Drilling activity increased. Why it matters: Energy stabilizing. | Industrials +1 Boston, Philadelphia, Chicago, Kansas City, Dallas Increased factory activity. Why it matters: Industrials positive. | Industrials −1 New York, Richmond, Atlanta Manufacturing declined. Why it matters: Partial offset. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Modest to moderate pace. |
| New York Flat Outlook ▲ Flat. |
| Philadelphia Growing +0.2 Outlook ▲ Grow slightly. |
| Cleveland Growing +0.5 Outlook ▶ Expanded at a modest pace. |
| Richmond Growing +0.5 Outlook ▲ Rose modestly. |
| Atlanta Growing +0.5 Outlook ▲ Improving at a modest pace. |
| Chicago Growing +1.0 Outlook ▲ Moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Modestly improved. |
| Minneapolis Growing +0.2 Outlook ▲ Grew slightly. |
| Kansas City Growing +0.2 Outlook ▲ Rose slightly. |
| Dallas Growing +1.0 Outlook ▲ Expanded moderately. |
| 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 lifts weighted RE above unweighted average.
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| | Energy — Energy turns slightly positive as drilling rises; Dallas still flat.
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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 |