Advantage Data: Junk sectors post fifth straight weekly gain, up in eight weeks out of last 10

By Paul Deckelman

New York, May 2 – The junk bond market continued to build on its recent upside momentum last week, ended April 28, posting a fifth consecutive weekly gain, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News by Advantage Data Inc.

The last time when more of the significantly sized sectors were on the downside than finished on the upside was over a month ago, during the week ended March 24.

While the sectors saw smooth sailing throughout April, they had been choppy during March, alternating down and up weeks beginning with the week ended March 10, which had been their first fall after six straight weeks before that of upside movement.

That six-week winning streak, which had started during the week ended Jan. 27 and which then ran through the week ended March 3, came as the market rebounded after having stumbled during the week ended Jan. 20, which had been its first loss after eight straight weekly gains.

Last week marked the 14th weekly gain so far this year, versus just three weekly losses since the start of 2017.

In the last 10 weeks, dating back to Feb. 24, the sectors have posted eight weeks of mostly gains, versus two weeks of mostly losses.

On a somewhat longer-term basis, in the 52 weeks of 2016, gainers dominated in 39 of those weeks, versus 13 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 all 33 of those bigger sectors finishing in the black last week, with no sectors ending in the red.

That was an improvement from the mostly positive sector breakdown seen the week before, ended April 21, when 25 of those larger sectors had shown gains, against eight losses.

Among specific large-sized sectors during the April 28 week, lodging was the top performer.

With all of the sectors showing gains, there was no downside, as such; paper manufacturing had the smallest gain.

With 17 weeks now in the books for 2017, though, oilfield services remained the best-performing large-sized sector on a year-to-date basis, its sixth straight week at the top and its 12th week out of the last 13 there.

Miscellaneous retailing was at the bottom of the year-to-date pile for a third week in a row – the only key sector in the red last week on a cumulative basis.

Lodging checks in as best

Among the specific large-sized sectors, lodging, as noted, turned in the best showing last week, up 1.19% on the week.

It was the hoteliers’ third straight week among the Top Five best-performing large-sized sectors, having also been there in the weeks ended April 14 and April 21 with gains of 0.40% each week.

Other sizable sectors showing strength last week included precision instrument manufacturing (up 0.83%), transportation equipment manufacturing (up 0.82%), metals mining (up 0.73%) and amusement and recreation services (up 0.72%). It was the latter sector’s second consecutive week among the Top Five, having also been there the week before with a 0.41% advance.

Papermakers see smallest gain

As noted, there was no downside, as such, last week, with all of the key sectors showing gains.

The week’s Bottom Five list of the worst-performing large-sized sectors therefore consisted of those industry groupings posting the smallest gains for the week.

Chief among these was paper manufacturing, which edged up by 0.07%.

Other sectors posting relatively paltry gains were energy exploration and production (up 0.14%), oil and natural gas extraction (up 0.15%), automotive services (up 0.15%) and food stores (up 0.21%).

It was the second straight week in the Bottom Five for both the energy E&P and oil and gas extraction sectors; they had been tied for the worst showing during the April 21 week, when both lost 0.52%.

Food stores, on the other hand, had spent the previous week among the Top Five with a 0.39% gain, while the automotive services sector had been there the two previous weeks, in fact turning the best showing seen in both the April 14 and April 21 weeks, with gains of 0.63% and 1.38%, respectively.

© 2015 Prospect News.
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