Advantage Data: Junk sectors continued to rise last week with eighth straight gain

By Paul Deckelman

New York, Oct. 10 – The junk bond market maintained its recent upside momentum last week, ended Oct. 6, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Tuesday by Advantage Data Inc.

It posted its eighth consecutive upturn after having seen a decisive loss during the week ended Aug. 11 – and that 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 Aug. 4, 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 33 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 27 of those sectors ending in the black last week, with just six finishing in the red.

In both of the two weeks before that, ended Sept. 22 and Sept. 29, some 29 of those major sectors had posted gains, versus only four sectors showing losses.

In contrast, during the most recent losing week, ended Aug. 11, fully 31 of the large-sized sectors were in retreat, and only two of the sectors managed to eke out tiny advances.

Among specific large-sized sectors during the week ended Oct. 6, food stores led all the sectors, while paper manufacturing spent a second consecutive week at the absolute bottom of the pile.

On a year-to-date basis, with 40 weeks of 2017 now in the books, lodging held the top spot on a cumulative basis for an 11th straight week, while the food stores grouping – despite its solid weekly performance – remained the year-to-date cellar-dweller for a second week in a row.

Food stores firm up

As noted, the food stores category – despite its poor showing on a cumulative basis – managed to bounce back from its lackluster showing the previous week and was the top-performing large-sized sector during the Oct. 6 week, returning 0.81% during that period.

It was the second time in the last three weeks that the grocers had been among the Top Five best-performing large-sized sectors, having also been among the elite finishers during the Sept. 22 week with a 0.64% gain.

However, those two weeks seem more like the exception rather than the rule for the volatile supermarkets sector, which spent the week in between, ended Sept. 29 among the Bottom Five worst-performing large-sized sector with a 0.17% loss – the grouping’s fifth time among the prior six weeks among the underachievers, including the weeks ended Sept. 8 and Sept. 15, when the sector was the worst performer of all of the key sectors with losses of 0.47% and 1.80%, respectively.

Other sectors showing strength in the most recent week included coal mining (up 0.66% last week), non-computer electrical and electronics manufacturing (up 0.50%), telecommunications (up 0.45%) and primary metals processing (up 0.40%).

Paper punishment continues

On the downside, paper manufacturing was the single-worst-performing large-sized sector last week for a second week in a row, down by 0.72%.

The sector also had that unwanted honor during the Sept. 29 week, when it lost 0.27%, and has now been among the Bottom Five for three straight weeks, also winding up there with a 0.05% loss during the Sept. 22 week.

Other major sectors posting losses last week included insurance carriers (down 0.35%), health care (down 0.19%), chemical manufacturing (down 0.16%) and energy exploration and production (down 0.09%).

It was the third straight week among the laggards for health care, which had made the Bottom Five in the Sept. 29 week with a paltry 0.05% gain, and during the Sept. 22 week, when the sector eased by 0.01%.

Last week was a decided comedown for the chemical makers and for energy E&P; chemicals had been among the Top Five during the Sept. 29 week with a 0.56% gain, while energy E&P had spent the previous four weeks among the big winners, with gains of 0.99% during the Sept. 29 week and 0.95% during the Sept. 22 week – good enough to share top honors that week with the oil and natural gas extraction sector.

Lodging still tops for year

On a year-to-date basis, lodging (up 14.88%) was the top cumulative performer for an 11th straight week and for the 15th time out of the last 16 weeks.

After a one-week hiatus during which it fell to just fourth-best on the year, chemical manufacturing (up 10.75%) reclaimed the runner-up spot last week, and has now been the second-best performing large sector year to date in seven weeks out of the last eight and in nine weeks out of the last 11.

Those two leaders were followed by third-best metals mining (up 9.66%) – which had temporarily occupied the Number-Two spot the week before – fourth-best primary metals processing (up 9.30%) and fifth-best amusement and recreational services (up 9.14%).

Food stores falter

On the downside, food stores – despite their strong weekly performance, as noted – remained the worst year-to-date performer among the major sectors for a second straight week and for five weeks out of the last six, showing a 2.01% loss on the year.

The grocers were the only sector showing cumulative red ink.

Miscellaneous retailing (up 0.94%) was second-worst for the year so far for a second straight week and a third week out of the last four.

Those underperformers were joined by third-worst non-computer electronics and electrical manufacturing (up 2.27%), fourth-worst coal mining (up 2.66%) and fifth-worst energy exploration and production (up 2.70%), the latter sector’s third week out of the last four in that unenviable position.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.