Advantage Data: Junk sectors up for fifth straight week after loss, up in nine weeks of last 10

By Paul Deckelman

New York, Sept. 6 – The junk bond market made it five consecutive weeks on the upside last week, posting that many straight weekly gains after having moved lower in one week more than a month ago, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Tuesday by Advantage Data Inc.

That loss back in the week ended July 29 had been the junk market’s first downturn after five consecutive weeks of gains stretching back to mid-June.

Gains have thus now been seen in nine weeks out of the last 10.

On a somewhat longer-term basis, in the 35 weeks since the start of the year, gainers have dominated in 27 of those weeks, versus eight weeks in which more negatives were seen.

Eleven of those better weeks came during a long winning streak which began during the week ended Feb. 19 and which then had extended through the week ended April 29, before being ended by a loss the following week, ended May 6, which was followed by a winning streak of five successive weekly gains stretching into mid-June, and another loss in the week ended June 17.

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 24 of those bigger sectors finishing in the black last week, with six sectors ending in the red and three sectors unchanged on the week, showing nether a gain nor a loss.

That was something of a deterioration from the week before, ended Aug. 26, during which 31 of those more sizable sectors posted gains, while just two sectors were showing losses.

Among specific large-sized sectors last week, food stores was the top performer, while metals mining had the biggest loss of any major sector.

That poor performance helped to push the metals miners out of the top spot on a year-to-date basis that they had held for the previous 26 consecutive weeks, with coal mining moving up to supplant them.

Holding companies and other investment offices was at the bottom of the year-to-date rankings last week.

Food stores firm the most

Among specific large-sized sectors, food stores (up 1.06%) had the biggest gain of any significantly sized sector last week.

It was the grocers’ second consecutive week among the Top Five best-performing large-sized sectors, having also been there during the week ended Aug. 26 with a 0.64% gain. The sector has now been among the elite finishers in three weeks out of the past four, having also been there during the week ended Aug. 12 with a 1.39% gain that week.

Also showing strength in the most recent week were coal mining and oilfield services (both up 0.50%), holding companies and other investment offices (up 0.43%) and insurance carriers (up 0.35%).

The coal miners were rebounding after having lost 0.35% during the Aug. 26 week – the worst showing of any large sector that week. They have now been among the Top Five gainers two weeks out of the last three, including the week ended Aug. 19, when they led all sectors with a 1.67% gain, and in four weeks out of the last six.

Oilfield services has now been among the elite performers in three weeks out of the last four.

Neither the holding companies nor the insurance carriers have been among the leaders in recent weeks.

Metal Miners move down

On the downside, the metals mining sector (down 0.65%) had the worst showing of any large-sized sector last week.

It was the second straight week among the Bottom Five worst-performing large-sized sectors for the miners, having also been there in the Aug. 26 week with an anemic 0.08% gain.

Also showing weakness during the latest period were non-computer electrical and electronics manufacturing (down 0.48%), chemical manufacturing (down 0.18%), energy exploration and production (down 0.11%) and the food manufacturing and health care services sectors (both down 0.05%).

It was the second straight week among the Bottom Five for energy E&P, having also been there the week before with a puny 0.05% gain.

Health care has now been among the Bottom Five laggards in three weeks out of the last four and four weeks out of the last six.

But last week was a comedown for the chemical makers, who had been among the Top Five the week before with a 0.60% gain, its second week in in the Top Five among the previous three weeks.

Coal climbs to the top

On a year-to-date basis, coal mining’s strong showing on the week helped propel the sector right to the top of the cumulative standings, with a 62.11% gain so far this year, after having been just second-best for two straight weeks before that and in four weeks out of the previous five.

It thus changed places with metals mining (up 57.87%), which dropped down to the runner-up position after an eye-popping 26 straight weeks at the top, dating back to the beginning of March.

While coal was one of the week’s best finishers, as noted, metals mining was among the week’s worst.

Holding companies worst

On the downside, holding companies and other investment offices – despite their strong showing for the week, as noted – fell to the bottom relative to the other sectors on a year-to-date basis, with a 6.01% cumulative return.

Automotive services, which had been the worst year-to-date performer the previous week, moved up, relatively speaking, to only second-worst, with a 6.71% return.

It has now been second-worst in three weeks out of the last four, and in five weeks out of the last eight.

© 2015 Prospect News.
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