Advantage Data: Junk sectors mostly lower last week for fourth week out of last five

By Paul Deckelman

New York, March 6 – The junk bond market returned to its recent losing ways last week (ended March 2), according to the latest sector-tabulated bond-performance statistics supplied to Prospect News by Advantage Data Inc.

It was a reversal from the week before that, ended Feb. 23, when the sectors had decisively broken out of a three-week losing streak – meaning that last week was the fourth week on the downside out of the last five.

Last week was the fifth week in the last 10, dating back to the week ended Dec. 29, in which more sectors had shown losses than gains, with the winners outnumbering the losers in the other five of those weeks.

Last week was the fifth week in the 2018 calendar year in which the losers outnumbered the gainers, with winning sectors predominating in the other four weeks since the start of the year.

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 25 of those sectors ending in the red last week, with seven sectors having finished in the black and one sector – lodging – having been unchanged, showing neither a gain nor a loss on the week.

That was a comedown from the Feb. 23 week, during which 24 of the key sectors had posted gains, with nine sectors having suffered losses.

That week had represented a clear comeback from the week before that, ended Feb. 16, during which 31 of those key sectors had notched losses, versus only two sectors showing gains that week.

And in the two weeks immediately before that, ended Feb. 2 and Feb. 9, all 33 sectors were in negative territory, with no sectors on the plus side of the ledger.

Among specific large-sized sectors during the week ended March 2, coal mining put up the biggest gain, while oil and natural gas extraction had the biggest loss.

Miscellaneous retailing did the best on a year-to-date basis for a second straight week, while the papermakers remained at the bottom of the cumulative returns pile for a ninth straight week.

Coal climbs on week

As noted, coal mining had the best showing of any major sector on the week, rising by 0.19%.

It was followed by printing and publishing (up 0.14%), wholesale durable goods distributors (up 0.11%), petroleum refining (up 0.10%) and real estate (up 0.09%).

The latter sector had spent the previous week among the Bottom Five worst-performing large-sized sectors, with a 0.13% loss in the Feb. 23 week.

Energy sectors lag

Energy-oriented sectors dominated the latest week’s Bottom Five, led by oil and natural gas extraction (down 0.72%) plus oilfield services (down 0.51%) and energy exploration and production (down 0.48%).

Oil and gas extraction and energy E&P have both now been among the Bottom Five in four weeks out of the last five.

Both sectors had taken a hiatus during the Feb. 23 week, but had been among the underachievers in the three weeks before that, in the weeks ended Feb. 16, Feb. 9 and Feb. 2, when oil and gas extraction had suffered losses of 0.70%, 2.05% and 1.35%, respectively, while E&P had lost 0.68%, 1.90% and 1.37%, respectively.

E&P’s 1.37% loss during the Feb. 2 week was the worst of any large-sized sectors that week.

Also notably on the downside in the latest week were miscellaneous retailing (down 0.71%) and industrial machinery and computer manufacturing (down 0.54%).

The retailers had been among the Top Five best-performing large-sized sectors during the Feb. 23 and Feb. 16 weeks, with gains of 0.60% and 0.20%, respectively.

Retailers tops YTD, papermakers worst

The miscellaneous retailers’ recent strength played a key part in the sector being the best performer on a year-to-date basis for a second straight week, returning 2.42%.

Food stores (up 1.05%) was the runner-up last week in the year-to-date rankings, followed by the week’s leader, coal mining (up 0.36%), which fell to just third-best for the year so far after having been second-best over the two previous weeks and in six of the prior eight weeks.

After that came healthcare (up 0.26%), now fourth-best in four weeks out of the last five, and fifth-best printing and publishing (up 0.16%).

On the downside, paper manufacturing, with a 5.81% year-to-date loss, remained by far the worst cumulative performer for a ninth straight week.

It was followed by telecommunications and automotive services, tied for second-worst with a 1.40% loss, third-worst energy E&P (down 1.37%), and fourth-worst oilfield services (down 1.30% on the year so far).

© 2015 Prospect News.
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