Advantage Data: Junk sectors posted fourth straight weekly gain last week

By Paul Deckelman

New York, Dec. 11 – The junk bond market put up its fourth better week in a row last week, continuing to bounce back from a rare recent loss, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

The upturn last week, ended Friday, Dec. 8, was a little less robust than the two strong showings in a row just before that, during the weeks ended Dec. 1 and Nov. 24; those two stellar performances had stood in contrast to the mediocre showing seen the week before that, ended Nov. 17, when high yield had just barely clawed its way back into positive territory by the slimmest of margins following a decisive loss during the week ended Nov. 10.

For the year to date, a majority of the sectors have finished on the plus side in 41 weeks so far, while losses have dominated in just eight 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 26 of those sectors ending in the black last week, with seven sectors having finished in the red.

That was somewhat softer than the Dec. 1 week, when 31 of those larger sectors had posted gains, with only two sectors showing a loss on the week – almost identical to the lopsided 32-1 positive split seen during the Nov. 24 week.

Those two strong weeks marked a considerable improvement over the nearly even split seen during the Nov. 17 week, when 17 of the major sectors had moved up, just a little better than the 16 which had moved down.

And that almost evenly divided week was still considerably better than the Nov. 10 week, when 32 of the larger sectors had ended on the negative side, none had posted a positive weekly result, and just one sector had finished the week unchanged from the week before.

Among specific large-sized sectors during the week ended Dec. 8, food stores had the strongest performance for a second consecutive week, while miscellaneous retailing did the worst.

On a year-to-date basis, with 49 weeks of 2017 now in the books, primary metals processing was in the top spot for a fifth straight week, while miscellaneous retailing, the week’s worst performer, as noted, was the cellar dweller on a cumulative basis for the fourth time in the last five weeks.

Food stores firming continues

For a second week in a row, the food stores sector outperformed all other large-sized sectors last week, returning 0.74%, on top of its dominant 1.13% return during the Dec. 1 week.

It was the grocers’ third straight week among the Top Five best-performing large-sized sectors, having also been there during the Nov. 24 week, when they had returned 0.61%.

Before that recent burst of strength, though, the supermarket operators had been among the Bottom Five worst-performing sizable sectors for three straight weeks, including the week ended Nov. 17, when the grouping lost 0.68%, and in four weeks out of the previous five.

Other sectors showing strength last week included chemical manufacturing (up 0.68%), energy exploration and production (up 0.58%), oil and natural gas extraction (up 0.57%) and automotive services (up 0.53%).

The chemical makers have now been among the Top Five in two weeks out of the last three, having also achieved that goal during the Nov. 24 week, when the grouping finished up 0.57%.

Last week was meanwhile the fourth straight week among the elite finishers for automotive services, which had also been there with returns of 0.64% in the Dec. 1 week, 0.46% in the Nov. 24 week and 0.39% in the Nov. 17 week.

Retailers in retreat

On the downside, miscellaneous retailing was the worst-performing large-sized sector last week, ending down 0.09%.

Other sectors finishing in the red last week included metals mining (down 0.08%), business services (down 0.06%), electric and natural gas utilities (down 0.05%) and health care (down 0.04%).

It was the second consecutive week among the Bottom Five for business services, which also had that unwanted honor the previous week with a meager 0.02% gain.

Health care, on the other hand, had actually been among the top finishers in that previous week, notching a 0.48% gain in the Dec. 1 week. However, it has now been among the worst finishers in two weeks out of the last three, having also landed among the Bottom Five in the Nov. 24 week with a heavily sedated 0.10% gain.

Primary metals best on year

With 49 weeks of 2017 now history, primary metals processing has the best showing so far on a year-to-date basis – up 11.65% – its fifth straight week as the cumulative leader.

That was followed by runner-up metals mining (10.40%), which, despite its poor weekly finish, as noted, has now been second-best on the year in three consecutive weeks and in four weeks out of the last five.

After that, building construction (up 10.07%) moved up by one notch to third-best on the year from just fourth best the week before; chemical manufacturing (up 9.88%), one of the week’s top finishers, took over the Number-Four slot, and amusement and recreational services (up 9.81%) was fifth-strongest on the year for a second straight week.

Retailers lag YTD

On the downside, miscellaneous retailing was not only last week’s worst weekly performer, as noted, but fell to the bottom of the year-to-date pile as well with a 1.14% cumulative loss, after having only been second-worst the week before.

But it has now been the worst large sector year-to-date in four weeks out of the last five.

It was the only key sector in the red on a cumulative basis last week.

Coal mining (up 1.14%) was second-worst on the year for a fourth week out of the last six.

Food stores (up 2.97%) was third-worst for the year for the third time in the last five weeks, while paper manufacturing (up 5.74%) was fourth-worst for a fourth consecutive week.

Telecommunications (up 5.75%) fell to fifth-worst on the year so far last week.

© 2015 Prospect News.
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