Advantage Data: Junk sectors post fourth straight weekly gain, up in eight weeks out of last 10

By Paul Deckelman

New York, April 24 – The junk bond market continued to build on its recent upside momentum last week, ended April 21, posting a fourth consecutive weekly gain, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

The last time when more of the significantly sized sectors were on the downside than finished on the upside was nearly a month ago, during the week ended March 24.

While the sectors have seen smooth sailing so far in April, they had been choppy throughout March, alternating down and up weeks beginning with the week ended March 10, which had been their first fall after six straight weeks before that 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 the 13th weekly gain so far this year, versus just three weekly losses since the start of 2017.

In the last 10 weeks, dating back to Feb. 17, the sectors have posted eight weeks of mostly gains, versus two weeks of mostly losses.

On a somewhat longer-term basis, in the 52 weeks of 2016, gainers dominated in 39 of those weeks, versus 13 weeks in which more negatives were seen.

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 25 of those bigger sectors finishing in the black last week, with eight sectors ending in the red.

That was in line with the mostly positive sector breakdown seen the week before, ended April 14, when 26 of those larger sectors had shown gains, against seven losses.

Among specific large-sized sectors during the April 21 week, automotive services such as vehicle rental companies and parking operators led all of the gainers for a second consecutive week, steering out of a prolonged skid.

On the downside, energy exploration and production and oil and natural gas extraction shared the dubious distinction of having the worst weekly return among the major sectors.

With 16 weeks now in the books for 2017, though, oilfield services remained the best-performing large-sized sector on a year-to-date basis, its fifth straight week at the top and its 11th week out of the last 12 there.

Miscellaneous retailing was at the bottom of the year-to-date pile for a second week in a row – the only key sector in the red last week on a cumulative basis.

Auto services drive higher

Among the specific large-sized sectors, automotive services, as noted, turned in the best showing last week, speeding ahead by 1.38% on the week.

It was the sector’s second straight week on top, having also been the best-performing sector during the week ended April 14, when it rose by 0.63%.

Before that, the volatile sector had mostly been on the downside, finishing with the worst weekly showing for the three consecutive weeks ended April 7, March 31 and March 24, when it racked up losses of 2.13%, 0.07% and 1.24%, respectively.

And before that, auto services had been the best-performing sector in both of the weekend ended March 3 and March 17 – a winning streak interrupted only by its performance in the March 10 week, when it again had been the worst large-sized finisher.

Other sizable sectors showing strength last week included food manufacturing (up 0.59%), amusement and recreation services (up 0.41%), lodging (up 0.40%) and the building construction and food stores sectors, both of which were up by 0.39% last week.

Lodging was making its second straight visit to the Top Five list of best-performing large-sized sectors, having also been there during the April 14 week with an identical gain of 0.40%.

Energy sectors in retreat

On the downside, the energy exploration and production and oil and natural gas extraction sectors both posted losses of 0.52% last week, the worst or any of the large-sized sectors.

Other notable losers last week included coal mining (down 0.49%), miscellaneous retailing (down 0.36%) and the electric and natural gas utilities and oilfield services sectors, both of which were down by 0.20% on the week.

It was the second straight week among the Bottom Five worst-performing large-sized sectors for the utilities and for coal, which had both been there during the April 14 week with losses of 0.08% and 0.09%, respectively.

Oilfield services best

On a year-to-date basis, oilfield services, despite their subpar weekly showing, remained the best-performing large sector with a 6.47% cumulative return. It has now been the leader over the last five consecutive weeks and in 11 weeks out of the last 12.

It was followed in the year-to-date rankings by runner-up lodging (up 5.98%), Number-Three health care services (up 4.85%), Number-Four metals mining (up 4.65%) and Number-Five building construction (up 4.39%).

On the downside, miscellaneous retailing was the worst-performing large sector year to date for a second straight week (down 0.91%).

It was the only key sector in the red on a cumulative basis.

Others turning in weak year-to-date returns were food stores and energy E&P, tied for second-worst (both up 1.42%), third-worst automotive services – despite its weekly leadership – (up 1.48%) and fourth-worst securities and commodities brokers, dealers and exchanges (up 1.96% year to date).

© 2015 Prospect News.
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