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

By Paul Deckelman

New York, May 8 – The junk bond market stayed on the upside last week, ended May 5 – though it just barely managed to post a sixth 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 over a month ago, during the week ended March 24.

While the sectors saw smooth sailing throughout April, after a mostly choppy March of alternating up and down weeks, things turned considerably more turbulent as May opened up.

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 17 of those sectors ending in the black last week – just barely nosing out the 16 key sectors which ended in the red.

That was a far cry from the overwhelming strength seen the week before, ended April 28, when all 33 of those bigger sectors finished with gains, while no sectors were showing losses during that previous week.

Among specific large-sized sectors during the May 5 week, chemical manufacturing was the top performer, while automotive services had the biggest loss.

However narrow it was, last week’s gain was the 15th weekly advance so far this year, versus just three weekly losses since the start of 2017.

In the last 10 weeks, dating back to March 3, the sectors have posted eight weeks of mostly gains, versus two weeks of mostly losses.

With 18 weeks now in the books for 2017, oilfield services remained the best-performing large-sized sector on a year-to-date basis, its seventh straight week at the top and its 13th week out of the last 14 there.

Miscellaneous retailing was at the bottom of the year-to-date pile for a fourth week in a row.

Chemicals climb during week

Among the specific large-sized sectors, chemical manufacturing, as noted, turned in the best showing last week, up 0.90% on the week.

Other sizable sectors showing strength last week included precision instrument manufacturing (up 0.46%), health care services (up 0.40%), depository financial institutions (up 0.39%), and amusement and recreation services (up 0.29%).

It was the second consecutive week among the Top Five best-performing large-sized sectors for the precision instrument manufacturers – a group which includes medical device makers – which had also been among the elite finishers in the week ended April 28 with an 0.83% gain that week.

And it was the third straight week that amusement and recreation was among the best performers, having also been there in the April 28 week with a 0.72% gain and during the week ended April 21, when it rose by 0.41%.

Auto services continue skid

On the downside, automotive services – a group which includes vehicle rental companies – had the biggest loss among the large-sized sectors, ending down 1.14% on the week.

It was the sector’s second week in a row among the Bottom Five worst-performing large-sized sectors; during the April 28 week, it had shown only a meager 0.15% gain, far smaller than most other sectors in that overwhelmingly positive week.

Before spinning its wheels the last two weeks, the auto grouping had been among the strongest performers recently, actually turning in the best results of any of the major sectors during both the weeks ended April 14 and April 21, when it had posted returns of 0.63% and 1.38%, respectively.

The latest week’s Bottom Five list was filled out mostly by energy-related sectors, in line with oil price turbulence.

These included energy exploration and production (down 1.05%), oil and natural gas extraction (down 0.91%) and oilfield services (down 0.49%). Electric and gas utilities also made the list with a 0.53% deficit on the week.

It was the third straight week among the Bottom Five for the E&P and oil and gas extraction sectors; both had been there during the April 28 week, with paltry gains of 0.14% and 0.15%, respectively, while during the April 21 week the two sectors had finished in a tie for the worst weekly showing, each posting a 0.52% downturn.

After a one-week break, oilfield services has now been among the Bottom Five in two weeks out of the last three, having also had that unwanted honor during the April 21 week with a 0.20% loss.

And the utilities have now been among the worst finishers in three weeks out of the last four; also after a one-week hiatus; they were there in the April 21 week with a 0.20% loss and during the April 14 week, when they eased by 0.08%.

Oilfield services tops

Despite the recent weakness shown by oilfield services, as noted, the sector remained the top performer on a year-to-date basis last week, with a 6.70% 2017 return so far.

It was the sector’s seventh straight week on top of the cumulative rankings, and its 13th week there out of the last 14.

Lodging was in the runner-up slot for a third consecutive week, showing a gain so far of 6.59%.

Health care services (up 5.51%) was third-best on the year, also for a third week in a row.

Wholesale durable goods (up 4.99%) and business services (up 4.70%) were also among the year-to-date leaders.

Health services, as noted, was also among the weekly leaders.

On the downside, miscellaneous retailing had the worst cumulative return for a fourth week in a row, up just 0.10% on the year so far.

It was followed by automotive services (up 0.45%), energy E&P (up 0.77%), food stores (up 1.11%) and oil and gas extraction (up 0.37% on the year to date).

Auto services, energy E&P and oil and gas extraction were also all among the weekly underperformers as well.

© 2015 Prospect News.
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