Advantage Data: Junk sectors saw first weekly loss after five straight weeks of gains

By Paul Deckelman

New York, Dec. 26 – The junk bond market ended lower in the week ended Dec. 22, snapping a winning streak of five straight weeks on the upside before that, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Tuesday by Advantage Data Inc.

It was the sectors’ first downside week since the decisive loss posted during the week ended Nov. 10, and only their second losing week in the most recent 10 weeks, dating back to the week ended Oct. 20.

For the year to date, most of the sectors have finished on the plus side in 42 weeks so far, while losses have dominated in just nine 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 18 of those sectors ending in the red last week, with 15 sectors having finished in the black.

That stood in contrast to the most recent upside week, ended Dec. 15, when 21 of the sectors had posted gains, 11 had shown losses and one sector finished the week unchanged, with neither a gain nor a loss on the week.

Among specific large-sized sectors during the week ended Dec. 22, chemical manufacturing had the strongest performance, while electric and natural gas utilities did the worst.

On a year-to-date basis, with 51 weeks of 2017 now in the books, primary metals processing was in the top spot for a seventh straight week, while coal mining was the cellar dweller on a cumulative basis.

Chemical makers climb

Chemical manufacturing was the strongest-finishing large-sized sector during the week ended Dec. 22, returning 0.65% on the week.

It was the chemical companies’ second time among the Top Five best-performing large-sized sectors within the last three weeks, having also been there during the week ended Dec. 8 with a 0.68% return.

And it was the sector’s third time among the elite finishers within the last five weeks, including the week ended Nov. 24, when it gained 0.57%.

Other sectors showing strength during the Dec. 22 week included health care (up 0.52%) – given a boost on the news that Kindred Healthcare Inc. is to be acquired in a deal valued at $4.1 billion, including assumed or repaid debt – miscellaneous retailing, (up 0.31%), coal mining (up 0.26%) and automotive services (up 0.22%).

It was the automotive services grouping’s sixth consecutive week among the Top Five, having also parked there during the Dec. 15 week with a 0.32% gain.

On the other hand, both coal mining and miscellaneous retailing were bouncing back following losing weeks.

Coal had been among the Bottom Five worst-performing large-sized sectors during the Dec. 15 week with a 0.96% loss.

And miscellaneous retailing had been the biggest loser of any major sector in both the Dec. 15 week and the Dec. 8 week, when it had posted deficits of 1.40% and 0.09%, respectively.

Utilities lead losing sectors

On the downside, electric and gas utilities had the biggest loss of any key sector on the week, losing 0.29%.

It was the utilities’ second week in the last three among the Bottom Five, having also been there during the Dec. 8 week with a 0.05% loss.

Other large-sized sectors posting notable losses included telecommunications (down 0.25%), precision instrument manufacturing (down 0.22%) and two financial sectors each losing 0.17% on the week – holding companies and other investment offices and non-depository credit institutions.

The precision instrument makers had been among the Top Five in the Dec. 15 week, gaining 0.30%.

Primary metals best on year

With 51 weeks of 2017 now history, primary metals processing had the best showing on a year-to-date basis – up 15.44% for the year through Dec. 22, its seventh straight week as the cumulative leader.

That was followed by runner-up chemicals manufacturing (up 12.53%), holding down the Number-Two spot for a second week in a row, followed by third-best metals mining (up 10.91%), fourth-best building construction (up 10.86%) and depository financial institutions (up 10.02%), fifth-strongest for a second consecutive week.

Coal in a hole YTD

On the downside, coal mining – despite its relatively strong showing on the week, as noted – fell to the bottom of the year-to-date rankings with a 0.93% loss.

Coal had previously been only the second-worst sector on the year, holding that position for two straight weeks and for five out of the most recent seven weeks.

It traded places with miscellaneous retailing – down 0.71% on the year – which had been the absolute worst year-to-date performer for the previous two weeks and for five weeks out of the previous six.

The food stores sector (up 1.24%) was third-worst on the year for a third consecutive week and for a fifth week out of the previous seven.

Non-computer electronic and electrical manufacturing (up 2.25%) was fourth-worst on the year.

Telecommunications (up 5.38%) was fifth-worst on the year for a second week out of the previous three.

© 2015 Prospect News.
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