Advantage Data: Junk bond sectors post second consecutive weekly gain

By Paul Deckelman

New York, Feb. 6 – The junk bond market posted its second consecutive gain last week (ended Feb. 3), according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

Last week’s gain, and the advance the week before, ended Jan. 27, came as the market rebounded after having stumbled during the week ended Jan. 20, which had been its first loss after eight straight weekly gains. Before that loss, the sectors had been heading higher ever since decisively breaking out of a rut in late November, when they had snapped a four-week-long losing streak.

In the latest 10 weeks, dating back to the week ended Dec. 2, there have been nine weeks of gains, versus just one week of losses during that stretch.

For a second straight week, a subset consisting of the 33 largest sectors (out of the total of 61 broad-industry sectors into which Boston-based Advantage Data currently divides its entire high-yield universe), as measured by the number of bond issuers, the collective number of issues tracked and their total face amount outstanding, showed 29 of those bigger sectors finishing in the black last week. Three of those larger sectors ended in the red, and one sector was unchanged on the week, showing neither a gain nor a loss.

The past two weeks have represented a clear comeback from the decisively negative breakdown seen during the Jan. 20 week, when 22 of those major sectors had posted losses, eight showed gains and three others had been unchanged on the week.

That, in turn, was a definitive reversal from the strongly positive split the week before that, ended Jan. 13, when 29 of those major sectors were in positive territory and just four had negative readings – making three weeks out of the last four in which 29 sectors were on the upside. Similarly strong positive results had also been seen over most of the seven weeks before that.

Among specific large-sized sectors during the Feb. 3 week, coal mining posted the biggest gain, while miscellaneous retailing had the worst loss.

With five weeks now in the books for 2017, oilfield services was the best-performing large-sized sector so far, while miscellaneous retailing was the worst performer.

Coal comes to the top

Coal mining turned in the strongest performance of any large-sized sector last week, as noted, rising by 0.82% on the week.

Also showing strength during the latest week were chemical manufacturing (up 0.74%), machinery and computer equipment manufacturing (up 0.64%), oilfield services (up 0.53%) and non-depository credit institutions (up 0.48%).

It was the second straight week that oilfield services was among the Top Five best-performing large-sized sectors, having also been there last week with a gain of 0.49%. The sector has now been among the big winners in five weeks out of the last six.

Miscellaneous retailing sinks

On the downside, miscellaneous retailing lost 0.30% during the week. It was the second straight week the sector was among the Bottom Five worst-performing large-sized sectors. It had also been there last week, when it lost 0.05%. The retailers have now been among those underachievers in four weeks out of the last five.

Other sectors showing losses last week were precision instrument manufacturing (down 0.08%) and electric and gas utilities (down 0.03%). Rounding out the latest week’s Bottom Five list, insurance carriers were unchanged, while the oil and natural gas extraction and printing and publishing sectors were each up by 0.01%.

Oil and gas extraction had been the best-performing sector during the Jan. 27 week, with an upturn of 0.72% – its second week among the Top Five among the prior four.

Oilfield services best

On a year-to-date basis, oilfield services – one of the weekly leaders, as noted – had the strongest cumulative showing so far, at 3.947%.

That was followed by chemical manufacturing – another weekly leader (up 3.09%), oil and gas extraction (up 2.80%), health care services (up 2.72%) and electric and gas utilities (up 2.64%).

On the downside, miscellaneous retailing – the worst-performing sector of the week, as noted – fell to the bottom of the year-to-date rankings with a 0.23% loss on the year so far.

It displaced automotive services (down 0.10%), which had been the year-to-date worst performer the previous week.

Other year-to-date laggards last week included coal mining (up 0.02%), securities and commodities brokers, dealers and exchanges (up 0.74%) and depository financial institutions (up 0.79%).

© 2015 Prospect News.
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