Advantage Data: Junk sectors post sixth straight gain after year’s first loss

By Paul Deckelman

New York, March 6 – The junk bond market posted its sixth consecutive gain last week, ended March 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 advances the week before, ended Feb. 24, and in the four weeks before that, ended Feb. 17, Feb. 10, Feb. 3 and 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 losing streak.

Last week marked the eighth weekly gain so far this year, versus one weekly loss.

In the latest 10 weeks, dating back to the week ended Dec. 30, there have been nine weeks of gains, versus just one week of losses during that stretch.

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 27 of those bigger sectors finishing in the black last week, with six sectors ending in the red.

That was something of a retreat from the week before, ended Feb. 24, when fully 32 of those major sectors had posted gains, and only one had shown a loss.

The past six weeks have represented a clear comeback from the decisively negative breakdown seen during the Jan. 20 week – the most recent losing week – when 22 of those key sectors had ended in the red, only eight finished in the black and three others had been unchanged on the week, showing neither a gain nor a loss.

Among specific large-sized sectors during the March 3 week, automotive services posted the biggest gain, while energy exploration and production had the worst loss.

With nine weeks now in the books for 2017, oilfield services was the best-performing large-sized sector on a year-to-date basis so far for a fifth week in a row, while energy E&P – the week’s biggest loser, as noted – fell to the bottom as the worst cumulative performer so far.

Autos services outperform

Automotive services, consisting largely of vehicle-rental companies, turned in the strongest performance of any large-sized sector last week, as noted, rising by 1.99% on the week.

It was the sector’s second consecutive week among the Top Five best-performing large-sized sectors, having also been there during the Feb. 24 week with a 0.62% gain, and its third week out of the last four among the big winners; during the Feb. 10 week, its 0.66% gain was the best showing of any large-sized sector.

Also showing strength during the latest week were health care services (up 0.76%), printing and publishing (up 0.73%), lodging (up 0.63%) and transportation equipment manufacturing (up 0.50%).

Health care was among the Top Five for a second week in a row, and in fact had led all of the major sectors during the Feb. 24 week with a 1.88% gain.

After a one-week break, lodging has now been among the Top Five in two weeks out of the last three, including the week ended Feb. 17, when it rose by 0.47%.

Energy production punished

On the downside, energy exploration and production, as noted, turned in the worst performance of any of the key sectors, falling by 1.27%.

It was the E&P grouping’s fourth straight weeks among the Bottom Five worst-performing large-sized sectors; during the Feb. 24 week, it had shown a meager 0.12% gain, much smaller than most other sectors during that overwhelmingly positive week.

Another energy-related sector – oil and natural gas extraction – lost 1.01% last week, which was its fifth successive week among the Bottom Five; it had only a sedate 0.18% gain during the Feb. 24 week.

Other underachievers in the latest week included precision instrument manufacturing (down 0.91%), oilfield services (down 0.13%) and non-depository credit institutions (down 0.12%).

After a one-week pause, the precision instruments grouping, including medical device makers, has now been among the Bottom Five in two weeks out of the last three, having also had that dubious honor in the Feb. 17 week, when it lost 0.12%.

Oilfield services tops for year

On a year-to-date basis, oilfield services had the strongest cumulative showing so far, at 6.00%, the sector’s fifth straight week in the top slot.

The other strong year-to-date performers had the exact same order ranking, relative to one another, that they had during the Feb. 24 week – chemical manufacturing (up 5.94%), its fifth consecutive week in the runner-up position, and after that, by third-best health care services (up 5.40%), fourth-best durable goods distributors (up 4.54%) and fifth-best lodging (up 4.40%), all in those positions for a second straight week.

Health care services and lodging, as noted, were also among the week’s strongest performers.

On the downside, energy exploration and production (up 0.79%) had the smallest year-to-date gain of any large sector.

It was followed by miscellaneous retailing (up 1.09%), which was second-worst for a third straight week, third-worst precision instrument manufacturing (up 1.31%), fourth-worst securities and commodities brokers, dealers and exchanges (up 1.49%) and fifth-worst food manufacturing (up 1.80%)

Energy E&P and precision instrument manufacturing, as noted, were also among the week’s worst laggards.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.