Advantage Data: Junk sectors continued rise last week with 12th gain

By Paul Deckelman

New York, Nov. 6 – The junk bond market maintained its recent upside momentum last week, ended Nov 3, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

It posted its 12th consecutive upturn, dating back to the week ended Aug. 18.

Its most recent downturn was seen the week before that, ended Aug. 11, when the sectors had been down decisively. That loss had been the first loss the sectors since the week ended July 7, snapping a prior four-week winning streak.

For the year to date, a majority of the sectors have finished on the plus side in 37 weeks so far, while losses have dominated in just seven weeks.

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.

That was a definite strengthening from the breakdown seen during the week ended Oct. 27, when 18 of the key sectors had shown gains, versus 15 showing losses.

And it was the fourth week out of the last five during which that same 27 to 6 split has been seen; that also happened during the weeks ended Oct. 6, Oct. 13 and Oct. 20.

In contrast, during the most recent losing week – the Aug. 11 week, as noted – 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 Nov. 3, the energy exploration and production and oil and natural gas extraction sectors were tied for the lead on the week, while chemical manufacturing had the biggest loss.

On a year-to-date basis, with 44 weeks of 2017 now in the books, metals mining held the top spot on a cumulative basis for a second consecutive week after having displaced lodging, which had been the champion for the previous 13 straight weeks, while food stores was the cellar-dweller for a second week in a row.

Energy improvements dominate

The energy exploration and production and oil and natural gas extraction sectors led the way during the week, each posting a 1.18% gain.

It was energy E&P’s second week in a row among the Top Five best-performing sectors, having also been there during the Oct. 27 week, when it was up by 0.26%. And it was the sector’s third week in the last four among the elite finishers, having been there as well during the Oct. 13 week, with a 0.39% gain.

Besides the leaders, other sectors showing particular strength last week included oilfield services (up 1.06%), petroleum refining (up 0.67%), and the depository financial institutions and electric and natural gas utilities sectors, each of which was up by 0.59% last week.

It was the second week in a row among the best performers for the refiners, depository financial institutions and the utilities, which had each notched gains during the Oct. 27 week of 0.34%, 0.29% and 0.31%, respectively.

On the other hand, oilfield services had spent both the Oct. 20 and Oct. 27 weeks among the Bottom Five worst-performing larges-sized sectors, with returns of 0.12% and 0.43%, respectively.

Chemicals makers mauled

On the downside, chemical manufacturing was the worst-performing large-sized sector on the week, losing 0.66%.

Other sectors posting notable losses last week included healthcare (down 0.63%), coal mining (down 0.35%), food stores (down 0.33%) and telecommunications (down 0.30%).

It was the coal mining sector’s second straight week among the Bottom Five, having also been there during the October 27 week, when it lost 0.43%. And coal has now been among the underachievers in three weeks out of the last four, having also been there during the Oct. 13 week with a loss of 0.12%.

Food stores, however, had spent the Oct. 27 week in the Top Five, in fact leading all of the other sectors with a 0.45% gain.

But the grocers have now also been part of the Bottom Five for two out of the past three weeks, posting a 0.16% loss during the Oct. 20 week.

Metals mining tops on year

On a year-to-date basis, metals mining led all of the large-sized sectors with a 10.63% cumulative gain, its second straight week at the top.

It was followed by amusement services (up 9.74%), in the runner-up spot for a second straight week, while primary metals processing (up 9.41%) was third best for the year for a fourth straight week.

Petroleum refining (up 9.40%) was fourth best on the year to date, while oilfield services (up 9.36%) was fifth strongest on the year.

Food stores struggle goes on

On the downside, food stores had the worst showing year to date (down 1.87%), its second straight week down at the bottom – and its fifth week there out of the prior six.

Coal mining (down 1.64%) fell to second worst on the year, after having been only third worst for the three straight weeks before that.

The sector changed places with miscellaneous retailing (up 2.50%), which moved up by one notch to just third-worst on the year.

Non-computer electronics and electrical manufacturing (up 2.56%) was fourth worst on the year, while oil and gas extraction (up 4.82%) – despite its strong showing on the week, as noted – was fifth worst on the year for a third week out of the last four.

© 2015 Prospect News.
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