Advantage Data: Junk sectors show gains for seventh straight week; most energy sectors soften

By Paul Deckelman

New York, April 4 – The junk bond market stayed in positive territory last week – its seventh consecutive week there after two straight weeks before that in which it had been mired deeply in the red, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

It was the eighth week out of the last 10 in which more sectors were posting gains than losses.

In the 13 weeks since the start of the year, gainers have dominated in eight of those weeks, versus five weeks in which more negatives were seen.

Besides last week’s upturn and the ones seen in the six weeks before that, going back to the week ended Feb. 19, the sectors had also done better during the week ended Jan. 29, after having started the new year with three straight weeks on the downside and six weeks out of the prior seven showing losses.

A subset consisting of the 33 largest sectors (out of the total of 60 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 28 of those bigger sectors finishing in the black in the latest week, versus just five sectors ending in the red.

That represented an improvement from the more modest positive breakdown seen the previous week, ended March 25, during which 21 of those sectors had shown gains while 12 had posted losses.

Before that had come five weeks in a row during which over 30 of the sectors had posted gains in each of those five weeks, versus just one or two losses.

That, in turn, marked a complete reversal of the breakdown seen during the week ended Feb. 12 – the most recent negative week – when all 33 of the large-sized sectors had posted losses, against no gains.

Among specific large-sized sectors last week, food stores was the top performer.

That snapped a four-week streak in which the various energy-related sectors had made up most of the top finishers, when they had moved up strongly along with generally stronger crude oil prices lately.

Coal mining had the largest weekly loss among the key sectors.

Metals mining still remained the best performer so far on a year-to-date basis for a fifth straight week, while coal stayed at the bottom of the year-to-date rankings for a seventh week in a row.

Food stores firm the most

Among specific large-sized sectors, food stores turned in the best showing among the significantly sized sectors, gaining an even 2% on the week.

It was the grocers’ second consecutive week among the Top Five best-performing large sectors; they had also been there the week before with a 1.05% gain.

Also showing strength in the latest week were transportation equipment manufacturing (up 0.83%), primary metals processing (up 0.82%), oilfield services (up 0.78%) and lodging (up 0.68%).

It was the fifth consecutive week among the top gainers for oilfield services – the only one of the energy-related sectors still putting up good weekly numbers; the sector had also risen by 1.19% the previous week.

After skipping a week, lodging was in the Top Five for a second week out of the last three.

Transportation equipment manufacturing and metals processing, on the other hand, had not been among the best or worst weekly finishers for the last few weeks.

Coal back in the hole

On the downside, coal mining (down 2.49%) returned to familiar territory, having been among the biggest weekly losers for most of the weeks of this year so far, including a number of weeks during which it had been the absolute worst large-sized finisher, most recently during the week ended March 4.

Its fall was all the more notable since during the March 25 week it had been the best big-sector performer of them all, gaining 3.36% that week.

Coal thus had the dubious distinction of going from first one week to worst the following week.

Energy names filled out last week’s Bottom Five list of worst large-sector performers – including energy exploration and production (down 1.92% on the week) and oil and natural gas extraction (down 1.61%), both of which had spent several previous weeks among the Top Five.

E&P had been there during the March 25 week with a 1.78% gain, its third straight week among the best performers.

Oil and gas extraction had been among the elite performers over the previous four consecutive weeks, including the March 25 week, when it had been up by 1.96%.

Energy sectors petroleum refining (down 0.25%) and midstream energy services (down 0.13%) rounded out the latest week’s Bottom Five list, despite having not been among either the largest losers or the biggest gainers during the previous few weeks.

Metals mining tops on year

On a year-to-date basis, the best-performing sizable sectors stayed largely in the same order of ranking, relative to each other last week, after three straight weeks in the exact same order before that.

After 13 trading weeks so far in 2016, metals mining (up 17.43%) remained as the best-performing large-sized sector on a cumulative basis for a fifth straight week, after having displaced miscellaneous retailing from the top spot after that latter sector had a six-week run up there.

Primary metals processing (up 10.79%) was in the runner-up spot for a fifth straight week.

Miscellaneous retailing (up 7.67%) was in third place, also for a fifth straight week. The retailers, as noted, had previously been in the Number-One position for six weeks.

Midstream energy services (6.29%) moved up by one notch in the standings to fourth-strongest this year, after having been just fifth-best for three weeks in a row before that.

It traded places with lodging (up 6.04%), which fell to just fifth-best after having been in fourth place for the previous four consecutive weeks. Before that, lodging had been Number-Two for five straight weeks. In 2015, lodging had been the single-best finisher on the year, gaining 18.92%, on the strength of having held that exalted position over the last three weeks of the year and on a longer-term basis, in 43 out of the last 44 weeks of 2015.

Primary metals processing and lodging were also among the week’s best finishers, as noted, while midstream energy services, also as noted, was among the week’s worst performers.

Coal remains YTD worst

On the downside, coal mining (down 26.79%) remained the absolute worst major sector on a year-to-date basis for a seventh consecutive week. It has now been the cellar-dweller in nine weeks out of the last 10.

Coal had actually started out the new year during the week ended Jan. 8 as only second-worst on the year, then improved, relatively speaking, to just third-worst in the Jan. 15 week and to fifth-worst in the Jan. 22 week, before finally heading for the bottom of the mineshaft during the weeks ended Jan. 29 and Feb. 5.

Before all of that, coal had ended 2015 as the absolute worst performer for the year, with a 35.31% loss, having had the biggest cumulative loss for 51 straight weeks last year. Coal had also been the single-worst large-sized performer in 2012, 2013 and 2014 as well.

Energy exploration and production (down 5.61%) was second-worst for a second straight week and in seven weeks out of the last eight.

Oil and gas extraction (down 4.61%) was third-worst on the year for a second straight week and has now held that slot in six weeks out of the last seven, including a stretch of four straight weeks, and on a longer-term basis, in 21 out of the last 26 weeks.

Chemical manufacturing (down 1.12%) fell by one notch in the rankings to fourth-worst on the year after having been only fifth-worst on the year for two straight weeks.

It switched places with food stores (up 0.52%), which had previously been fourth-worst, also for two straight weeks. The grocers have now been fifth-worst in three weeks out of the last five.

Coal mining, energy E&P and oil and gas extraction, as noted, were all among the week’s worst performers as well. Food stores, as also noted, held the top spot on the week.

© 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.