Advantage Data: Junk sectors posted second straight weekly gain last week, after rare recent loss

By Paul Deckelman

New York, Nov. 27 – The junk bond market made it two consecutive weeks on the upside last week, continuing to bounce back from a rare recent loss, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Monday by Advantage Data Inc.

The upturn last week, ended Friday, Nov. 24, was considerably stronger than the mediocre showing seen the week before, ended Nov. 17, when high yield had just barely clawed its way back into positive territory by the slimmest of margins.

That narrow advance, in turn, had followed a decisive loss during the week ended Nov. 10 – its first negative week after 12 consecutive weekly gains, snapping a winning streak dating all the way back to the week ended Aug. 18.

For the year to date, though, a majority of the sectors have finished on the plus side in 39 weeks so far, while losses have dominated in just eight weeks.

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 fully 32 of those sectors ending in the black last week, with only one sector having finished in the red.

That was a considerable improvement over the nearly even split seen during the Nov. 17 week, when 17 of the major sectors had posted gains while 16 had recorded losses.

And that almost evenly divided week was still considerably better than the Nov. 10 week, when 32 of the larger sectors had ended on the negative side, none had posted a positive weekly result, and just one sector had finished the week unchanged from the week before.

Among specific large-sized sectors during the week ended Nov. 24, coal mining accomplished the unusual feat of going from worst to first, posting the biggest gain on the week after having been the worst finisher of all the week before. Paper manufacturing took coal’s place as the week’s worst finisher.

On a year-to-date basis, with 47 weeks of 2017 now in the books, primary metals processing was in the top spot for a third straight week, while miscellaneous retailing – despite a second solid weekly performance – remained the cumulative cellar dweller for a third week in a row.

Coal gets hot

Coal mining, as noted, was the strongest finisher among those major sectors last week, posting a 0.81% gain.

Coal thus went from worst to first, after having posted the biggest loss during the Nov. 17 week, when it had fallen by 0.94% – its fourth consecutive week among the Bottom Five worst-performing large-sized sectors, and its fifth week there in the previous six.

Other sectors showing strength last week included food stores (up 0.61%), chemical manufacturing (up 0.57%), miscellaneous retailing (up 0.50%), and automotive services (up 0.46%).

It was the second straight week among the Top Five best-performing sizable sectors for both miscellaneous retailing and automotive services, which had also made it during the Nov. 17 week with gains of 0.77% and 0.39%, respectively. The retailing sector, in fact, had been the single strongest performer among the key sectors that prior week.

Food stores, on the other hand, like coal, was rebounding last week after having recently been beaten down, having been among the Bottom Five with a 0.68% loss in in the Nov. 17 week, its third straight week there and fourth week out of the prior five.

Paper crumples

On the downside, paper manufacturing was the worst finisher among the key sectors, easing by 0.08% on the week, the sole significantly sized sector finishing in the red last week.

Last week’s Bottom Five was thus rounded out by sectors which had merely posted considerably smaller gains than all of the others – oilfield services (up 0.08%), health care (up 0.10%), midstream energy (up 0.13%) and machinery and computer equipment manufacturing (up 0.14%).

It was the second week in a row among the Bottom Five for oilfield services and midstream energy, which had each also been there during the Nov. 17 week as well with losses of 0.16% and 0.17%, respectively. The streaky oilfield services sector had spent the two weeks before that, ended Nov. 10 and Nov. 3, in the Top Five – and the two weeks before that back in the Bottom Five, with last week thus being its fourth week out of the last six among the underachievers.

Health care, in contrast, had been in the Top Five during the Nov. 17 week with a 0.17% gain.

Primary metals best on year

With 47 weeks of 2017 now in the books, primary metals processing has the best showing so far on a year-to-date basis – up 13.81% – its third straight week as the cumulative leader.

That was followed by runner-up metals mining (10.30%), which has now been second-best on the year in two weeks out of the last three; third-best amusement and recreational services (up 9.84%), fourth-best depository financial institutions (up 9.64%) and then electric and gas utilities (up 9%), which was fifth-best for a second straight week.

Retail leads YTD retreat

On the downside, miscellaneous retailing (down 1.11%) was at the bottom of the cumulative rankings for a third week in a row, despite its strong performance on the week, as noted. It was the only sizable sector in the red on the year so far.

It was followed by second-worst coal mining (up 1.08%), also languishing in the year-to-date rankings despite its leading performance on the week, as noted.

They were followed by third-worst food stores (up 1.75%), fourth-worst paper manufacturing (up 4.80%) and fifth-worst non-computer electrical and electronics manufacturing (up 4.84%).

© 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.