Advantage Data: Junk sectors fall for second straight week after snapping five-week upside run

By Paul Deckelman

New York, Nov. 7 – The junk bond market was languishing on the downside for a second consecutive week last week ended Nov. 4, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

Those two weeks of losses follow five straight weeks of gains, which lasted through the week ended Oct. 21.

Gains have now been seen in seven weeks out of the last 10, dating back to the week ended Sept. 2.

On a somewhat longer-term basis, in the 44 weeks since the start of the year, gainers have dominated in 33 of those weeks, versus 11 weeks in which more negatives were seen.

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 a complete shutout to the downside, with all 33 sectors ending in the red last week and none in the black.

That was a worsening performance compared to the week ended Oct. 28, when 29 sectors finished in negative territory versus four sectors in positive territory.

Among specific large-sized sectors last week, real estate showed the smallest loss of any of them last week, while metals mining was the biggest weekly loser.

Coal mining was on top on a year-to-date basis, for a second straight week and for four weeks out of the last five, while food stores fell to the bottom of the year-to-date rankings.

Oilfield services worst

On the downside, the metals mining sector (down 2.17%) had the worst showing of any significantly sized industry grouping last week.

Other sectors showing notable weakness last week included energy exploration and production (down 2.01%), oil and natural gas extraction (down 1.72%), electric and gas utilities (down 1.64%) and oilfield services (down 1.63%).

The latter sector, now among the Bottom Five worst significantly sized performers for two straight weeks, had been the absolute worst finisher in the Oct. 28 week and in fact had been the top finisher the week before that, ended Oct. 21 with a 1.95% gain for the week, thus accomplishing the relatively unusual feat of having gone from first to worst in the span of one week.

It was also the second straight week among the Bottom Five for Energy E&P, the oil and gas extraction segment, and the electric and gas utilities sector, which had week-earlier losses of 101%, 0.92% and 0.72%, respectively.

Metals mining on the other hands, had been among the best large-sized finishers in the Oct. 28 week, when the sector was up by 1.42%.

Real estate had smallest loss

With all sectors showing losses last week, there was no upside as such.

Instead, the Top Five group of best-performing major sectors was populated with those sectors having smaller losses than all of the others – real estate down 0.11%), depository financial institutions (down 0.12%), food stores (down 0.16%), building construction (down 0.23%) and paper manufacturing (down 0.25%).

It was the food stores sector’s second straight week among the Top Five and its third week in the last four.

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