Advantage Data: Junk sectors post fourth straight gain after loss, now up in nine of last 10 weeks

By Paul Deckelman

New York, June 12 – The junk bond market continued to advance last week, ended June 9, posting its fourth consecutive weekly gain, 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 during the week ended May 12, which had been their first loss after six consecutive weeks before that on the upside, dating back to the week ended March 31.

Last week marked the sectors’ ninth positive week out of the last 10 weeks, dating back to the week ended April 7.

While the sectors had seen smooth sailing throughout April, after a mostly choppy March of alternating up and down weeks, things turned more turbulent for the first part of May.

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 22 of those sectors ending in the black last week, with 11 sectors in the red.

That represented a deterioration from the week before, ended June 2, when 30 of those sectors had posted gains and just three had notched losses. The week before that, ended May 26, had seen a similar breakdown, with 31 of the sectors making a positive showing and just two putting up negative numbers.

During the most recent downside week, ended May 12, 20 of the sectors had ended in negative territory, 11 were positive, and two others showed neither a gain nor a loss on the week.

Among specific large-sized sectors during the June 9 week, food stores was the top performer, while automotive services had the biggest loss.

On a year-to-date basis, with 23 weeks of 2017 now in the books, health care had the best cumulative showing for a second straight week, while weekly loser automotive services also did the worst for the year to date, its fourth consecutive week in that unenviable position.

Grocers on top

Among the specific large-sized sectors, food stores, as noted, was the top finisher among the large-sized sectors last week, gaining 0.70%.

Other sizable sectors showing strength last week included lodging (up 0.45%), printing and publishing (up 0.42%), transportation equipment manufacturing (up 0.41%) and amusement and recreation services (up 0.29%).

It was the second consecutive week among the Top Five best-performing large-sized sectors for lodging and for transportation equipment manufacturing, which had both been among the elite finishers in the June 2 week with gains of 0.84% and 0.64%, respectively; lodging, in fact had led all of the key sectors for the week.

After a one-week pause, printing and publishing has now been among the leaders in two weeks out of the last three, having also been there in the May 26 week with a 0.52% gain.

Auto services resume skid

On the downside, automotive services, largely consisting of vehicle rental companies, had the worst showing among the larger sectors last week, as noted, losing 1.88%.

The volatile sector had been among the Top Five in both of the previous two weeks, posting gains of 0.52% in the June 2 week and 0.96% in the May 26 week – but before that, had been among the Bottom Five worst-performing major sectors for four straight weeks, including the week ended May 19, when it was the single worst performer of all, losing 0.72%.

Other sectors posting notable losses last week included oil and natural gas extraction (down 1.41%), energy exploration and production (down 1.12%), oilfield services (down 0.89%) and miscellaneous retailing (down 0.83%).

It was the second straight week that oilfield services had been among the big losers, having also been there the week before with a 0.13% loss.

And it was the third straight week among the underachievers for oil and gas extraction and energy E&P.

Both had been among the Bottom Five in the June 2 week with losses of 0.40% and 0.41%, respectively – energy E&P was the single worst performer that week.

And they had also both been there during the May 26 week, with meager gains of just 0.02% and 0.01%, respectively.

Health care best on year

On a year-to-date basis, health care had the strongest return (up 8.65%), occupying the top spot for a second straight week after three straight weeks before that in the runner-up position.

Lodging – the previous leader – was thus only second-best for a second week in a row with a 7.47% cumulative gain.

They were followed by third-best amusement and recreation services (up 5.95%), fourth-best business services (up 5.77%) and fifth-best wholesale durable goods distributors (up 5.71%).

Autos remain weakest

Among the worst year-to-date performers, automotive services (down 0.74%) and miscellaneous retailing (up 0.36%) were the worst and the second-worst, respectively, for a fourth straight week.

They were followed by third-worst oil and gas extraction (up 1.05%), fourth-worst energy E&P (up 1.30%) and by fifth-worst coal mining (up 3.01% on the year).

© 2015 Prospect News.
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