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

By Paul Deckelman

New York, Dec. 4 – The junk bond market made it three 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, Dec. 1, was the sectors’ second strong showing in a row, pretty much replicating the robust performance the week before, ended Nov. 24 – which had stood in contrast to the mediocre showing seen the week before that, 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, however, had followed a decisive loss during the week ended Nov. 10 – the sectors’ 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 40 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 31 of those sectors ending in the black last week, with only two sectors having finished in the red.

That was little changed from the previous week, ended Nov. 24, when 32 of those larger sectors had posted gains, with only one showing a loss on the week.

Among specific large-sized sectors during the week ended Dec. 1, food stores had the strongest performance, while telecommunications did the worst.

On a year-to-date basis, with 48 weeks of 2017 now in the books, primary metals processing was in the top spot for a fourth straight week, while food stores – despite the sector’s hefty gain for the week – was the cumulative-basis cellar dweller.

Food stores firm up

The food stores sector outperformed all other large-sized sectors last week, returning 1.13%.

It was the grocers’ second straight week among the Top Five best-performing large-sized sectors, having also been there the week before, when they had returned 0.64%.

Before that recent burst of strength, the supermarket operators had been among the Bottom Five worst-performing sizable sectors for three straight weeks, including the week ended Nov. 17, when the grouping lost 0.68%, and in four weeks out of the previous five.

Other sectors showing strength last week included automotive services (up 0.64%), coal mining (up 0.57%), paper manufacturing (up 0.51%) and health care (up 0.48%).

It was the second straight week among the Top Five for the coal miners, with the sector having returned 0.81% during the Nov. 24 week, which, in fact, had been the best of any large-sized sector that week.

Coal traveled from worst to first that week, having turned in the worst-single large-sized sector performance in the preceding Nov. 17 week, when the miners had slid by 0.94% – the sector’s fourth consecutive week among the Bottom Five and its fifth week there out of the previous six.

Last week was meanwhile the third straight week among the elite finishers for automotive services, which had also been there with returns of 0.46% in the Nov. 24 week and 0.39% in the Nov. 17 week.

Paper manufacturing and health care, on the other hand, had both been among the Bottom Five in the Nov. 24 week, with the papermakers losing 0.08% that week – the only key sector actually posting a loss – while health care had returned a paltry 0.10% that week.

Health care, though, has now been in the Top Five for a second week in the last three, having also made it during the Nov. 17 week, when it had gained 0.17%.

Telecom tumbles to bottom

On the downside, the telecommunications sector was the worst-performing large-sized sector last week, ending down 0.11% amid continued weak showings for domestic wireline telecom operators like Frontier Communications Corp. and European telecom and broadband company Altice NV.

Amusement and recreational services was down by 0.02% last week – the only other key sector actually closing in the red.

Last week’s Bottom Five thus was filled out by sectors showing considerably smaller gains than all of the others – business services and holding companies and other investment offices (both up by 0.02%) and the food manufacturing and lodging sectors (both up by 0.05%).

None of last week’s worst-performing sectors had been among either the worst- or the best-performing major sectors over the previous several weeks.

Primary metals best on year

With 48 weeks of 2017 now history, primary metals processing has the best showing so far on a year-to-date basis – up 14.28% – its fourth straight week as the cumulative leader.

That was followed by runner-up metals mining (10.74%), which has now been second-best on the year in two consecutive weeks and in three weeks out of the last four; third-best depository financial institutions (up 10.33%), fourth-best building construction (up 10.01%) and fifth-best amusement and recreational services (up 9.66%).

Food stores falter YTD

On the downside, food stores (up 2.39%) had the weakest return of any key sector on a year-to-date basis, even though it was the week’s best finisher, as noted.

It was followed by second-worst miscellaneous retailing (up 2.97%), which had been the worst year-to-date sector over the previous three weeks.

Coal mining (up 3.04%) was third-worst on the year, followed by paper manufacturing (up 4.99%), which was fourth-worst on the year for a third week in a row, and fifth-worst oil and natural gas extraction (up 5.43% on the year).

© 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.