Advantage Data: Junk sectors continued rise last week with seventh straight gain

By Paul Deckelman

New York, Oct. 2 – The junk bond market maintained its recent upside momentum last week, ended Sept. 29, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

It posted its seventh consecutive upturn after having seen a decisive loss during the week ended Aug. 11 – and that had been the first loss the sectors had seen since the week ended July 7, snapping a four-week winning streak.

And for the year to date, a majority of the sectors have finished on the plus side in 32 weeks so far, while losses have dominated in just seven weeks to date.

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 29 of those sectors ending in the black last week, with just four finishing in the red.

That was the exact same 29-to-4 breakdown seen the previous week, ended Sept. 22, with most – although not all – of the sectors finishing the same way they had during that prior week.

In contrast, the most recent losing week, ended Aug. 11, had seen fully 31 of the large-sized sectors in retreat, versus only two which had managed to eke out tiny advances.

Among specific large-sized sectors during the week ended Sept. 29, oil and natural gas extraction led all sectors for a third straight week, though it had been tied for the top spot with energy exploration and production during the Sept. 22 week, while paper manufacturing was at the absolute bottom of the pile.

On a year-to-date basis, with 39 weeks of 2017 now in the books, lodging held the top spot on a cumulative basis for 10th straight week, while the food stores grouping, after a one-week hiatus, was once again the year’s worst performer so far, having now been the cellar-dweller in four weeks out of the last five.

Energy outperforms

For a fourth straight week, energy-related sectors dominated the ranks of the best-performers in the latest week, grabbing four spots out of the Top Five biggest gainers among the large-sized sectors last week for the second time in three weeks, in line with continued surging world crude oil prices. In the other two weeks out of the last four, energy had accounted for three out of the five top finishers.

Oil and natural gas extraction held the top spot for a third successive week, returning 1.28%. It had also been the best performer during the Sept. 22 week, although it shared that honor with energy exploration and petroleum, with both sectors returning 0.95% that week. O&G extraction was also the best performer during the week ended Sept. 15, when it returned 1.11%, and the sector has now been among the Top Five for four weeks in a row.

Other energy-related sectors showing strength in the latest week included energy exploration and production (up 0.99%), oilfield services (up 0.67%) and petroleum refining (up 0.59%).

It was the fourth straight week among the Top Five for both energy E&P and oilfield services; during the Sept. 22 week, as noted, E&P had tied oil and gas extraction for top honors.

Refining was not among the big winners that week but has now been among the elite finishers in three weeks out of the last four, including the week ended Sept. 15, when it rose by 0.29%.

Chemical manufacturing (up 0.56%) was the sole non-energy sector among the leaders last week.

Paper pushed lower

On the downside, paper manufacturing was the single-worst-performing large-sized sector last week, down by 0.27%.

It was the papermakers’ second week in a row among the Bottom Five worst-performing large-sized sectors, having also been there during the Sept. 22 week with a 0.05% loss.

Other major sectors posting losses last week included transportation equipment manufacturing (down 0.20%), food stores (down 0.17%) and miscellaneous retailing (down 0.14%).

It was the third straight week in the Bottom Five for retailers, who in fact had the biggest loss of all during the Sept. 22 week, when they dropped by 0.44%. The sector has now been among the underachievers in six weeks out of the last seven.

The food stores sector, meantime, had not been among the worst finishers in the Sept. 22 week – but it was the single worst-performing sector during both the weeks ended Sept. 15 and Sept. 8, when it lost 1.80% and 0.47%, respectively. The grocers have now been in the Bottom Five in five weeks out of the last six.

As was the case during the Sept. 22 week, with just four sectors finishing in the red, last week’s Bottom Five was fleshed out with the smallest gainer among the positive sectors, in this case health care, up a paltry 0.05%.

The sector was also among the losers in the Sept. 22 week, when it edged down by 0.01%, and has been in the Bottom Five in three weeks out of the last four.

Lodging tops for year

On a year-to-date basis, lodging (up 15.22%) was the top cumulative performer for a 10th straight week and for the 14th time out of the last 15 weeks.

It was followed by metals mining (up 9.22%), which displaced chemical manufacturing, which had held the runner-up spot for the previous six straight weeks and for eight weeks out of the prior nine.

On the downside, food stores (down 0.50%) returned to their familiar position as the worst year-to-date sector after a one-week pause during which miscellaneous retailing had temporarily fallen to the bottom of the rankings. The supermarkets sector has now been the worst cumulative performer in four weeks out of the last five and in seven weeks out of the last 10.

© 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.