Advantage Data: Junk sectors continued to rise last week with 10th straight gain

By Paul Deckelman

New York, Oct. 23 – The junk bond market maintained its recent upside momentum last week, ended Oct. 20, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

It posted its 10th consecutive upturn, dating back to the week ended Aug. 18.

The market’s most recent downturn was seen the week before that, ended Aug. 11, when the sectors had been down decisively. That loss had been the first loss the sectors had seen since the week ended July 7, snapping a prior four-week winning streak.

For the year to date, a majority of the sectors have finished on the plus side in 35 weeks so far, while losses have dominated in just seven weeks.

For a third consecutive week, 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 27 of those sectors ending in the black last week, with just six finishing in the red, the same breakdown seen during the week ended Oct. 13 and before that, during the week ended Oct. 6, although there were a few different sectors finishing on the downside in each of those prior weeks.

In both of the two weeks before that, ended Sept. 22 and Sept. 29, some 29 of those major sectors had posted gains, versus only four sectors showing losses.

In contrast, during the most recent losing week – the Aug. 11 week, as noted – fully 31 of the large-sized sectors were in retreat, and only two of the sectors managed to eke out tiny advances.

Among specific large-sized sectors during the week ended Oct. 20, miscellaneous retailing led all the sectors – after having been the worst finisher the week before – while petroleum refining was at the absolute bottom of the pile.

On a year-to-date basis, with 42 weeks of 2017 now in the books, lodging held the top spot on a cumulative basis for a 13th straight week, while miscellaneous retailing, despite its solid weekly performance, fell to the bottom.

Miscellaneous retailers rise

As noted, the miscellaneous retailing category – despite its relatively weak showing on a cumulative basis – was the top-performing large-sized sector during the Oct. 20 week, returning 0.91% during that period.

The volatile sector thus accomplished the feat of going from worst to first, having been the worst-performing large-sized sector during the Oct. 13 week, when it had plunged 0.61% – its fourth week among the Bottom Five worst finishers out of the previous five weeks.

Other sectors showing strength in the most recent week included transportation equipment manufacturing (up 0.77%), health care (up 0.54%), printing and publishing (up 0.45%) and primary metals processing (up 0.44%).

After a hiatus during the Oct. 13 week, primary metals processing has now been among the Top Five best-performing large-sized sectors in two weeks out of the last three, having also been there during the Oct. 6 week with a 0.40% gain.

Health care, on the other hand, had been in the Bottom Five over the previous four straight weeks, including a 0.54% slide in the Oct. 13 week, and in five weeks out of the prior six.

Refiners in retreat

On the downside, petroleum refining had the biggest loss among any of the major sectors last week, falling by 0.58%.

Other notable losers during the week included paper manufacturing (down 0.27%), food stores (down 0.16%), oilfield services (down 0.12%) and insurance carriers (down 0.02%).

The insurance carriers have now been among the Bottom Five in two weeks out of the last three, having also been there in the Oct. 6 week, when they were down by 0.35%.

And it was the papermakers’ fifth straight week among the worst performers, having also been there in the Oct. 13 week with 0.17% loss, and having been the single-worst finisher of all the sectors during both the Oct. 6 week and the week ended Sept. 29, posting deficits of 0.72% and 0.27%, respectively.

The food stores grouping, on the other hand, had been the single best-finishing key sector in both the Oct. 13 week and the Oct. 6 week, with gains those weeks of 0.75% and 0.81%, respectively, landing the grocers among the Top Five in three weeks out of the previous four.

Lodging still tops for year

On a year-to-date basis, lodging (up 18.88%) was the top cumulative performer for a 13th straight week and for the 17th time out of the last 18 weeks.

After a one-week hiatus during which it fell to just fourth-best on the year, chemical manufacturing (up 10.95%) reclaimed the runner-up spot last week, and has now been the second-best performing large sector year to date in eight weeks out of the last 10 and in 10 weeks out of the last 13.

They were followed by primary metals processing (up10.29%), third-best for a second straight week, metals mining (up 9.74%), which fell back to fourth-best on the year after having temporarily displaced the chemical makers for the second spot in the Oct. 13 week. Amusement and recreational services (up 9.60%) was fifth strongest on the year for its second week out of the previous three.

Miscellaneous retailers off

On the downside, miscellaneous retailing, despite the sector’s strong performance on the week, as noted, fell to the bottom of the rankings on a year-to-date basis with an anemic 0.05% cumulative return so far, after having been just second-worst for three straight weeks before that.

It thus displaced food stores (up 0.85%), which improved to just second-worst on the year so far last week, after having been the worst year-to-date performer among the major sectors for the previous three straight weeks, for six weeks out of the prior seven and for nine weeks out of the prior 12.

The latest week’s underperformers also included coal mining (up 2.30%), third-worst on the year for a second straight week; fourth-worst energy exploration and production (up 2.77%), in that slot for a second straight week, and fifth-worst oil and natural gas extraction (up 2.87%), also holding that position for a second week in a row.

© 2015 Prospect News.
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