EconomyxAI · Sector Watch September 2012Released October 10, 2012 |
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Conditions index +0.34 avg of 11 sectors, −2 to +2 |
| Outlook index +0.04 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 10, 2012, with information collected on or before September 28, 2012. | | ■ | Activity generally expanded modestly; New York leveled off and Kansas City slowed somewhat. | | ■ | Consumer spending was flat to up slightly, vehicle sales stable at favorable levels and tourism fairly robust; all twelve districts reported stronger existing home sales. | | ■ | Manufacturing was mixed but somewhat improved, loan demand steady to stronger, energy robust, coal declined, and prices little changed. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE
▶ Steady | +0.56 |
| | Information Technology
XLK
▲ Turning up | +0.12 |
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| Weakest prospects Consumer Discretionary
XLY
▼ Weakening | −0.06 |
| Consumer Staples
XLP
▶ Steady | −0.03 |
| 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 | Real Estate
XLRE | | +0.56 | Favorable | +1.11 | +0.53 | ▶ +0.14 | | 2 | Energy
XLE | | +0.42 | Leaning Favorable | +1.23 | +0.05 | ▶ +0.18 | | 3 | Information Technology
XLK | | +0.12 | Neutral | +0.28 | −0.05 | ▲ +0.23 | | 4 | Materials
XLB | | +0.11 | Neutral | +0.29 | +0.00 | ▶ +0.14 | | 5 | Health Care
XLV | | +0.05 | Neutral | +0.12 | +0.00 | ▶ +0.07 | | 6 | Financials
XLF | | +0.03 | Neutral | +0.32 | −0.01 | ▶ −0.07 | | 7 | Industrials
XLI | | +0.02 | Neutral | +0.11 | −0.04 | ▲ −0.01 | | 8 | Communication Services
XLC | | +0.01 | Neutral | +0.02 | +0.00 | ▶ −0.01 | | 9 | Utilities
XLU | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Consumer Staples
XLP | | −0.03 | Neutral | −0.05 | +0.00 | ▶ −0.09 | | 11 | Consumer Discretionary
XLY | | −0.06 | Neutral | +0.29 | −0.06 | ▼ −0.38 |
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 generally; New York leveled off; Kansas City slowed. | Employment little changed; New York and Chicago weaker. | | Inflation Pressure (higher = headwind) | | +0.00 |
Prices little changed; higher agricultural and petroleum prices; natural gas low. | Loan demand steady to stronger; quality improved; standards little changed. | Fiscal cliff, election and Europe weigh on outlooks; Philadelphia manufacturers more optimistic. |
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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 | · | · | · | · | · | · | +1 | · | · | · | · | | FinancialsXLF | · | +1 | +1 | +1 | · | · | −1 | +1 | · | · | · | · | | Consumer DiscretionaryXLY | · | −1 | +1 | +1 | +1 | · | · | · | +1 | −1 | · | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | +1 | · | · | · | | IndustrialsXLI | +1 | −1 | −1 | · | +1 | · | −1 | +1 | −1 | +1 | · | +1 | | Consumer StaplesXLP | · | · | · | −1 | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | −1 | · | · | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +1 | +2 | +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 broad−based All districts All twelve districts reported existing home sales strengthened. Why it matters: Breadth lifts Real Estate. | Real Estate +2 Dallas Tight inventories led to price gains; apartment construction picked up. Why it matters: Strongest Real Estate read. | Energy +2 Dallas Energy business remained strong; refinery margins highest since 2008. Why it matters: Dallas carries 45% of Energy weight. | Information Technology +1 San Francisco New orders from the semiconductor industry improved. Why it matters: SF carries 47% of IT weight. | Financials +1 New York Increased demand for all loan types except consumer. Why it matters: New York holds 28% of Financials weight. | Industrials −1 New York, Chicago Manufacturing production edged lower. Why it matters: Restrains Industrials. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Expanding at a modest pace. |
| New York Flat Outlook ▼ Held steady. |
| Philadelphia Growing +0.5 Outlook ▲ Continued to improve modestly. |
| Cleveland Growing +0.5 Outlook ▶ Expanded; growth modest. |
| Richmond Growing +0.5 Outlook ▶ Improved modestly. |
| Atlanta Growing +0.5 Outlook ▶ Expanding slowly. |
| Chicago Growing +0.5 Outlook ▼ Continued to expand at a slow pace. |
| St. Louis Growing +1.0 Outlook ▶ Expanded at a moderate pace. |
| Minneapolis Growing +0.5 Outlook ▶ Expanded modestly. |
| Kansas City Growing +0.5 Outlook ▼ Slightly slower pace. |
| Dallas Growing +1.0 Outlook ▶ Expanded at a moderate pace. |
| San Francisco Growing +0.5 Outlook ▶ Grew at a modest pace. |
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Where the signal is thin or split Divergences to watch | Information Technology — San Francisco (+1, 47% weight) offsets negative reads elsewhere, lifting the weighted score above the unweighted average.
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| | Consumer Discretionary — New York softness (-1) pulls weighted below unweighted.
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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 |