Advantage Data: Junk sectors rebound, now up in eight weeks out of 10

By Paul Deckelman

New York, May 22 – The junk bond market resumed its winning ways last week, ended May 19, after a hiccup the week before, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

The sectors were rebounding after having been mostly lower the week before, ended May 12, which had been their first loss after six consecutive weeks before that on the upside – the first time that more of the significantly sized sectors were on the downside than finished on the upside since the week ended March 24.

Last week marked the sectors’ eighth positive week out of the last 10 weeks, dating back to the week ended March 17.

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

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 30 of those sectors ending in the black last week, with just three sectors in the red.

That was a far cry from the week before, when 20 of those sectors posted losses, 11 notched gains and two showed neither a gain nor a loss on the week.

The week before that, ended May 5, had seen 17 of the sectors ending in positive territory, barely nosing out the 16 which finished on the negative side of the ledger.

Among specific large-sized sectors during the May 19 week, energy exploration and production was the top performer – in fact, accomplishing the relatively unusual feat of having gone from the worst single finisher the week before, to the best.

Automotive services meantime moved into the vacant spot as single worst large-sized sector performer on the week.

On a year-to-date basis, with 20 weeks of 2017 now in the books, lodging had the best cumulative showing for a second week in a row. Weekly worst-performer automotive services also held down that unwanted honor for the year-to-date.

E&P goes worst to first

Among the specific large-sized sectors, energy exploration and production was the top finisher among the large-sized sectors, gaining 0.89% on the week.

It was the first time that energy-oriented sector has been among the big leaders in weeks, having spent the previous four weeks among the Bottom Five worst-performing large-sized sectors.

In fact, during the week ended May 12, it had been the single worst finisher with a 0.98% loss that week.

Energy-oriented names also made up the rest of the latest week’s Top Five list of the best-performing large-sized sectors – a major turnaround for those recently struggling groupings.

These included coal mining (up 0.74%), oil and natural gas extraction (up 0.71%), petroleum refining (up 0.68%) and electric and gas utilities (up 0.60%).

The latter sector had spent each of the previous two weeks among the Bottom Five, including at 0.48% loss in the May 12 week.

Like energy E&P, oil and gas extraction had been among the Bottom Five in each of the previous four weeks, including a deficit of 0.81% during the week ended May 12.

Auto services skid lower

Among the underachievers, automotive services, largely comprised of vehicle-rental names, had the worst loss of any sizable sector, ending last week down 0.72%.

It was the auto services grouping’s fourth consecutive week among the Bottom Five, including its 0.45% during the week ended May 12. The week before, ended May 5, it had been the absolute worst-performing major sector, with a 1.14% loss that week.

Two other sectors ended in the red last week – precision instrument manufacturing (down 0.23%) and miscellaneous retailing (down 0.13%). The latter sector had actually been among the Top Five finishers during the May 12 week, with a 0.21% gain.

With only three key sectors showing losses on the week, as noted, the rest of last week’s Bottom Five consisted of sectors showing relatively smaller gains than their other sectors – printing and publishing (up 0.05%) and food manufacturing (up 0.07%).

© 2015 Prospect News.
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