Advantage Data: Junk sectors end 2017 on an up note, rebounding from rare week-before loss

By Paul Deckelman

New York, Jan. 2 – The junk bond market finished the last trading week of 2017 (ended Dec. 29) higher, rebounding from a relatively unusual loss the week before, according to the latest sector-tabulated bond-performance statistics supplied to Prospect News on Tuesday by Advantage Data Inc.

That loss, during the week ended Dec. 22, had snapped a winning streak of five straight weeks on the upside before that, dating back to the week ended Nov. 17. It had been 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. 27.

And – demonstrating the general pattern of mostly upside movements, punctuated here and there by a losing week – that loss during the Nov. 10 week had been the sectors’ first negative week after a string of 12 consecutive weekly gains before that, snapping a winning streak dating all the way back to the week ended Aug. 18.

For the full 2017 year, a majority of the sectors finished on the plus side in 43 weeks, while losses 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 fully 31 of those sectors ending in the black last week, with only two sectors having finished in the red.

That stood in stark contrast to the Dec. 22 week, when 18 of the sectors had posted losses, while 15 had shown gains on the week.

And last week’s robust performance represented a considerable strengthening from the most recent previous positive week, ended Dec. 15, when 21 of the sectors had finished on the plus side of the fence, 11 had negative readings 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. 29, food stores had the strongest performance, while the securities and commodities brokers, dealers and exchanges sector did the worst.

For the full year, primary metals processing occupied the top spot for the final eight weeks, while miscellaneous retailing finished as the cellar dweller on a cumulative basis.

Food stores firm on week

Food stores was the strongest-finishing large-sized sector during the week ended Dec. 29, returning 0.90% on the week.

It was the grocers’ fourth week out of the last six as part of the Top Five best-performing large-sized sectors and their third week out of the last five as the top finisher in that elite group, having also claimed the crown with returns of 0.74% during the week ended Dec. 8 and 1.13% during the week ended Dec. 1.

Other sectors showing strength during the Dec. 29 week included energy exploration and production (up 0.60%), petroleum refining (up 0.46%), oil and natural gas extraction (up 0.43%) and depository financial institutions (up 0.36%).

It was the third week out of the last four among the Top Five for both energy E&P and oil and gas extraction; E&P had also been there with gains of 0.30% in the Dec. 15 week and 0.58% in the Dec. 8 week, while oil and gas extraction made it into the select circle in the Dec. 15 week with a 0.34% gain – the best of any key sector that week – and in the Dec. 8 week, when it was up by 0.57%.

Brokers and dealers lead the downsiders

On the downside, securities and commodities brokers, dealers and exchanges had the biggest loss on the week – though it was really not much of a loss, with the sector down 0.09%.

The chemical makers eased by 0.02% on the week, the only other major sector finishing in the red last week.

That loss, however small, was still a comedown for chemicals, which had been the single best finisher the week before, ended Dec. 22, when it had led all sectors with a 0.65% return on the week.

The sector had also been among the Top Five recently with gains of 0.68% during the Dec. 8 week and going back a little further, 0.57% in the week ended Nov. 24.

With only two sectors actually posting losses, as noted, last week’s Bottom Five list of the worst-performing large-sized sectors was filled out by groupings which merely had smaller gains than most of the others – business services (up 0.06%), amusement and recreational services (up 0.07%) and two sectors which each gained 0.10% on the week, lodging and paper manufacturing.

The paper makers and amusement services have each now been among the Bottom Five in two weeks out of the previous three, having both been there during the Dec. 15 week with losses of 1.07% and 0.15%, respectively, while amusements had also been among the underachievers in the Dec. 1 week with a 0.02% loss.

Primary metals best on year

With all 52 weeks of 2017 now history, primary metals processing ended the year as the cumulative leader with a 16.43% return, its eighth straight week as the cumulative leader.

That was followed by runner-up metals mining (up 11.46% on the year), third-best chemicals manufacturing (up 10.87%), fourth-best building construction (up 10.77%) – in that spot for a second week in a row – and, despite its recent weakness, as noted, amusement and recreational services (up 10.23% on the year).

Retailers retreat on the year

On the downside, miscellaneous retailers ended the year at the bottom of the cumulative standings with a 2.99% deficit, the third week in the last four and sixth week out of the last eight in that unenviable position.

Coal mining – the worst cumulative performer during the previous week – ended the year only second-worst, down 0.94% – the sector’s third week in the last four and sixth week out of the last nine there.

They were the only two sectors to finish the year with cumulative losses.

Electrical and electronics manufacturing, excluding computer equipment, finished third-worst on the year with a meager 2.11% gain.

Despite the sector’s strong showing both for the week and in other recent weeks, as noted, food stores finished fourth-worst on the year with a 4.05% return.

Paper manufacturing (up 4.67%) was fifth- worst on the year among the large-sized sectors.

© 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.