Advantage Data: Junk sectors continued rebound last week with fourth straight gain

By Paul Deckelman

New York, Sept. 11 – The junk bond market remained on the rebound last week ended Sept. 8, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

It posted its fourth consecutive upturn after having seen a decisive loss during the week ended Aug. 11, which had been the first loss the sectors had seen since the week ended July 7, snapping a four-week winning streak.

Last week marked the eighth positive week for the sectors out of the last 10 weeks, dating back to the week ended July 7, versus just two negative weeks during that stretch.

And for the year to date, a majority of the sectors have finished on the plus side in 29 weeks so far, while losses have dominated in seven weeks to date.

A subset consisting of the 33 largest sectors (out of the total of 60 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 28 of those sectors ending in the black last week, with just five finishing in the red.

That still represented a slight deterioration from the previous week, ended Sept. 1, when 30 of those key sectors had shown gains and only three had posted losses.

In contrast, the losing Aug. 11 week saw fully 31 of the large-sized sectors in retreat, versus only two which had managed to eke out tiny advances.

Among specific large-sized sectors during the week ended Sept. 8, automotive services led all sectors, its second straight week at the top, while food stores had the worst loss.

On a year-to-date basis, with 36 weeks of 2017 now in the books, lodging held the top spot on a cumulative basis for a seventh straight week, while food stores were at the absolute bottom of the pile for a second successive week.

Auto services outperform

The automotive services sector, mostly consisting of vehicle-rental companies, was the top finisher among the large-sized sectors last week, gaining 1.55% during that seven-day period.

It was the second straight week that sector has been the best finisher, having also been in the top spot during the Sept. 1 week, when it was up by 1.29%.

After having not been among the leaders during the week ended Aug. 25, the autos grouping has now been among the Top Five best-performing large-sized sectors in four weeks out of the last five and in fact has led in all four of those weeks, including the weeks ended Aug. 18 and Aug. 11, when it posted returns of 0.57% and 0.07%, respectively. But the week before that, ended Aug. 4, saw the frequently volatile sector as the worst-performing industry grouping, with a 1.78% loss that week.

Other key sectors showing strength last week included oilfield services (up 0.85%), oil and natural gas extraction (up 0.76%), energy exploration and production (up 0.63%) and precision instrument manufacturing (up 0.59%).

It was a definite improvement for energy E&P, which had been among the Bottom Five worst-performing large-sized sectors during the Sept. 1 week, when it was up by a meager 0.01%.

Food stores falter

On the downside, food stores had the worst loss of any of the key sectors last week, ending down by 0.47%.

It was the grocers’ third straight week in the Bottom Five, having also been there in the Sept. 1 week with an anemic 0.10% gain and in the Aug. 25 week with an 0.78% loss; and longer-term, the sector has now been among the underachievers in eight weeks out of the last nine and in 10 weeks out of the last 13, dating back to mid-June, including several weeks during that stretch during which the supermarket operators were the single-worst-performing grouping.

Other major sectors posting losses last week included non-computer electrical and electronics manufacturing (down 0.42%), depository financial institutions (down 0.11%) and the health care and telecommunications sectors (both down 0.04%).

Last week was a comedown for telecom; during the Sept. 1 week, it had been among the Top Five with a 0.49% gain.

Lodging stays on top for year

On a year-to-date basis so far, the lodging sector was the best performer for a seventh straight week and for an 11th week out of the last 12, with a cumulative gain of 12.82% last week.

Chemical manufacturing (up 9.77%) was in the runner-up slot for a fifth straight week and for a sixth week out of the last seven.

Those leaders were followed by third-best metals mining (up 8.71%) and fourth-best primary metals processing (up 8.44%), as well as fifth-best amusement and recreational services (up 8.25%), the latter sector holding that Number-Five slot for a second week in a row.

Food stores worst on year

On the downside, food stores – the week’s worst performer, as noted – also had the worst year-to-date showing last week, down 1.57%, its second consecutive week as the worst cumulative performer, and its fifth week there out of the last seven. It was the only sector in the red last week on a year-to-date basis.

It was followed by second-worst oil and natural gas extraction (up 0.32%), also in that position for a second straight week.

Miscellaneous retailing (up 0.44%) was third-worst on the year, with energy exploration and production (up 0.95%) fourth-worst and non-computer electronics manufacturing (up 1.48%) fifth worst on the year.

© 2015 Prospect News.
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