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

By Paul Deckelman

New York, Sept. 25 – The junk bond market maintained its recent upside momentum last week, ended Sept. 22, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

It posted its sixth 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 ninth positive week for the sectors out of the last 10 weeks, dating back to the week ended July 21, versus just one negative week during that stretch – the Aug. 11 week.

And for the year to date, a majority of the sectors have finished on the plus side in 31 weeks so far, while losses have dominated in just seven weeks to date.

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 29 of those sectors ending in the black last week, with just four finishing in the red.

That represented a strengthening from the previous week, ended Sept. 15, when 21 of those key sectors had shown gains and 12 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. 22, oil and natural gas extraction led all sectors for a second straight week, though it was tied for the top spot with energy exploration and production, while miscellaneous retailing was at the absolute bottom of the pile.

On a year-to-date basis, with 38 weeks of 2017 now in the books, lodging held the top spot on a cumulative basis for ninth straight week, while weekly loser miscellaneous retailing became the year’s worst performer so far, displacing food stores, which had previously been at the bottom for three straight weeks.

Energy again dominates week

For a second straight week, energy-related sectors dominated the ranks of the best-performers last week, grabbing three spots out of the Top Five biggest gainers among the large-sized sectors, in line with continued surging world crude oil prices.

Oil and natural gas extraction and energy exploration and production jointly held the top spot, each posting a 0.95% return on the week.

Oil and gas extraction had also been the top finisher in the Sept. 15 week, with a 1.11% gain, and has now been among the Top five for three straight weeks, having also made it in the week ended Sept. 8, when its rose by 0.76%.

Energy E&P was meantime also among the big winners for a third straight week, having risen by 0.96% in the Sept. 15 week and by 0.63% in the Sept. 8 week.

Another energy-related sector showing strength last week was oilfield services (up 0.47%). Like oil and gas extraction and energy E&P. it was among the elite finishers for a third consecutive week, having also been among the Top Five in the Sept. 15 week and the Sept. 8 week with gains of 0.63% and 0.85%, respectively.

Away from energy-linked sectors, food stores (up 0.64%) and automotive services (up 0.47%) rounded out the latest week’s Top Five.

It was a strong comeback for the food stores sector, which had been among Bottom Five worst-performing major sectors over the previous four consecutive weeks, including the Sept. 15 week and the Sept. 8 week, when the grocers turned in the worst showing of any large sector, down by 1.80% and 0.47%, respectively.

Automotive services, primarily consisting of vehicle-rental companies, was not among either the big gainers or losers in the Sept. 15 week, but before that one-week hiatus had been the single-best performing key sector in the Sept. 8 week and in the week ended Sept. 1, posting gains those weeks of 1.55% and 1.29%, respectively.

Auto services has now been among the Top Five key sectors in five weeks out of the last seven.

Retailers in retreat

On the downside, miscellaneous retailing was the single-worst-performing large-sized sector last week, down by 0.44%.

It was the sector’s second straight week among the Bottom Five, having also been there in the Sept. 15 week with a 0.20% loss.

The retailers grouping has now been among the worst underachievers in five weeks out of the last six.

Other major sectors posting losses last week included securities and commodities brokers, dealers and exchanges (down 0.06%), paper manufacturing (down 0.05%), and health care (down 0.01%). The latter sector has now been among the worst losers in two weeks out of the last three, having also been there in the Sept. 8 week with a 0.04% downturn.

With just four large-sized sectors actually positing losses last week, the latest week’s Bottom Five was rounded out by two sectors each showing an anemic 0.05% gain – precision instrument manufacturing and wholesale durable goods distributors.

Lodging tops for year

On a year-to-date basis, lodging (up 13.09%) was the top cumulative performer for a ninth straight week and for the 13th time out of the last 14 weeks.

It was followed by chemical manufacturing (up 9.92%), in the runner-up spot for a sixth straight week and for eight weeks out of the last nine.

On the downside, miscellaneous retailing – the week’s biggest loser, as noted – also fell to the bottom of the year-to-date rankings, showing just a 0.30% gain for the year so far.

It displaced food stores – a strong performer this week, as noted – which had been down at the bottom of the cumulative rankings for the previous three straight weeks and for six weeks out of the prior eight.

© 2015 Prospect News.
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