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

By Paul Deckelman

New York, April 3 – The junk bond market remains choppy, rebounding last week, ended March 31, after having moved lower the week before that, ended March 24, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

That continued the up-and-down pattern seen earlier in March – the market had bounced upward during the week ended March 17 after a loss during the week ended March 10, which had been its first fall after six straight weeks of upside movement.

Last week marked the 10th weekly gain so far this year, versus just three weekly losses since the start of 2017.

In the last 10 weeks, dating back to Jan. 27, the sectors have posted eight weeks of mostly gains, versus two 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 all 33 of those bigger sectors finishing in the black last week, with none ending in the red.

That clean sweep to the upside represented a booming comeback from the pattern of weakness seen during the March 24 week, when 23 of those larger sectors had shown losses, against 10 gains.

However, the week before that, ended March 17, had been strongly positive, with 29 of those larger sectors advancing and just four sectors in retreat.

Among specific large-sized sectors during the March 31 week, energy exploration and production – recently found mostly among the big losers – turned in the best performance of any of the large-sized sectors.

Automotive services continued to show great volatility by turning in the worst showing for a second straight week and the third time in the past four weeks – a losing streak interrupted only its showing as the single best-performing sector during the March 17 week.

With 13 weeks now in the books for 2017, oilfield services remained the best-performing large-sized sector on a year-to-date basis, its second straight week at the top and its eighth week out of the last nine there.

Food stores fell to the bottom of the year-to-date pile, displacing weekly leader energy E&P, which had been the worst cumulative performer over the previous two weeks.

Energy E&P on top for week

Despite its general weakness so far on a year-to-date basis, as noted, the energy E&P sector was the week’s single top large-sized performer, posting a 1.64% gain.

Other sizable sectors showing strength last week included oil and natural gas extraction (up 1.53%), chemical manufacturing (up 1.45%), oilfield services (up 1.26%) and health care services (up 1.15%).

It was a strong rebound for the oil and gas extraction grouping, which had been among the Bottom Five worst-performing large-sized sectors the previous week with a 0.45% loss, its second week among the big losers in the prior three.

Auto services underperform

While there was no downside as such last week, with all of the sectors registering gains, as noted, the Bottom Five consisted of those sectors posting smaller gains than their peers.

Chief among these was automotive services (up 0.07%), consisting largely of vehicle-rental companies; it was the absolute worst weekly performer for a second straight week and in three weeks out of the last four, having also been the worst in the March 24 week, with a 1.24% loss, and in the March 10 week, when the sector was down by 1.04%.

That losing streak was broken only by the volatile sector having zoomed to the top of all sectors during the March 17 week, when it was up 0.85%. It had also been the best performer in the week ended March 3, jumping by 1.99%.

Other sectors among the Bottom Five last week included precision instrument manufacturing (down 0.20%), paper manufacturing (up 0.25%), real estate (up 0.33%), and two sectors each notching a 0.41% gain last week – food stores and non-depository credit institutions.

It was the second straight week in the Bottom Five for the food stores, which were also there the prior week with a 0.62% loss.

Real estate, on the other hand, spent the March 24 week among the Top Five best-performing major sectors with a 0.17% gain.

© 2015 Prospect News.
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