Advantage Data: Junk sectors fall after last week’s gain, now up in seven weeks out of last 10

By Paul Deckelman

New York, March 27 – After spending a week on the upside, the junk bond market moved lower last week, ended March 24, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.; the week before that, ended March 17, it had rebounded after a loss during the week ended March 10, which had been its first fall after six straight weeks of upside movement.

That six-week winning streak, which had started during the week ended Jan. 27 and which then ran through the week ended March 3, 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.

Last week marked just the third weekly loss so far this year, versus nine weekly gains since the start of 2017.

In the last 10 weeks, dating back to Jan. 20, the sectors have posted seven weeks of mostly gains, versus three weeks of mostly losses.

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 23 of those bigger sectors finishing in the red last week, with 13 ending in the black.

That represented a decided reversal from the pattern of strength seen during the March 17 week, when 29 of those larger sectors had shown gains and only four had posted any losses.

However, the week before that, ended March 10, had been a clean sweep on the downside, with all 33 of those larger sectors ending in negative territory and none on the plus side of the ledger.

Among specific large-sized sectors during the March 17 week, automotive services showed great volatility by turning in the worst showing for the second time in the past three weeks, doing so by having plunged after posting the best showing in the March 17 week. It had been tied for the worst showing in the March 10 week.

Depository financial institutions had the best performance in the latest week.

With 12 weeks now in the books for 2017, oilfield services regained its recent position as the best-performing large-sized sector on a year-to-date basis, after having been temporarily dethroned the previous week by health care services; oilfield services had been the champion cumulative performer for the previous six weeks in a row.

Energy exploration and production meantime remained the worst year-to-date performer so far for a second straight week.

Auto services underperform

Automotive services, consisting largely of vehicle-rental companies, continued to gyrate, now having been either the very best weekly performer or the absolute worst, over the past four weeks.

It turned in the worst performance of any large-sized sector last week, as noted, falling by 1.24%.

It thus had the unenviable distinction of going from first to worst; during the March 17 week, auto services had motored to the top of the large-sector rankings with a 0.85% gain.

The week before that, ended March 10, it had been tied with energy E&P for the worst weekly performance of any large-sized sector, both plunging by 1.94%, while the week before that one, ended March 3, had seen the auto services grouping parked on top with a 1.99% gain that week.

Other sectors among the Bottom Five worst performers last week included coal mining (down 1.17%), miscellaneous retailing (down 0.71%), food stores (down 0.62%) and oil and natural gas extraction (down 0.45%).

It was the second straight week among the Bottom Five for miscellaneous retailing, having also been there during the March 17 week with a 0.01% decline.

After a week’s pause, oil and gas extraction has now been part of the Bottom Five in two weeks out of the last three, having posted a 1.93% loss in the March 10 week, and having also been among those big losers for the five straight weeks just before that one.

Depository institutions tops

Depository financial institutions, as noted, did the best of any large-sized sector this past week, gaining 0.48%.

Others finishing among the Top Five best-performing large-sized sectors last week included real estate (up 0.17%), non-computer electronics manufacturing (up 0.13%), insurance carriers (up 0.11%) and printing and publishing (up 0.08%).

Real estate, after a one week pause, has now been in in the Top Five in two weeks out of the last three, having also been there in the very negative March 10 week with a relatively small 0.22% loss that week.

The electrical manufacturers had been among the Bottom Five during the March 17 week, with a 0.13% loss.

© 2015 Prospect News.
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