Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

November 2022
Market Update
(all values as of 11.30.2022)

Stock Indices:

Dow Jones 34,589
S&P 500 4,080
Nasdaq 11,468

Bond Sector Yields:

2 Yr Treasury 4.38%
10 Yr Treasury 3.68%
10 Yr Municipal 2.75%
High Yield 8.46%

YTD Market Returns:

Dow Jones -4.81%
S&P 500 -14.39%
Nasdaq -26.70%
MSCI-EAFE -16.78%
MSCI-Europe -17.23%
MSCI-Pacific -15.76%
MSCI-Emg Mkt -21.08%
 
US Agg Bond -12.62%
US Corp Bond -15.39%
US Gov’t Bond -13.16%

Commodity Prices:

Gold 1,784
Silver 22.48
Oil (WTI) 80.52

Currencies:

Dollar / Euro 1.03
Dollar / Pound 1.19
Yen / Dollar 138.48
Canadian /Dollar 0.74

Portfolio Overview

Ocean Park Investors Fund rose 4.31%* in November as the market posted solid gains for the second month in a row.  The S&P 500 rose 5.38% and the NASDAQ Composite rose 4.37%.  Chip manufacturers were the strongest performers in the fund led by Advanced Micro Devices, Nvidia, and ON Semiconductor, all of which gained more than 20%.

During November, we added to positions in the autos and transportation sector and the technology sector and reduced positions in the consumer discretionary and service sector.  We finished the month at about 94% net long, up from about 90% in October.

 

 

 

Daily updates on our activity are available on our Results Line, at 310-281-8577, and current information is also maintained on our website at www.oceanparkcapital.com. To gain access to the site enter password opcap.

*These results are pro forma. Actual results for most investors will vary. See additional disclosures on page 4. Past performance does not guarantee future results.

 
Equity Overview

Equity Overview

Repeating their performance in October, all sectors in the S&P 500 rose in November.  Materials stocks were the leaders and energy stocks were the laggards.  Value stocks again outperformed growth.  Volatility moderated, as the S&P 500 moved more than 1% on 8 of 22 trading days, less than in previous months.  The forward price/earnings ratio for the S&P 500 at month end was 17.1, equal to the 10-year average.

As the third quarter earnings season wound down, corporate profits continued to make modest gains.  With 91% of S&P 500 companies reporting, 69% beat consensus earnings expectations and 71% beat consensus revenue expectations—decent results, but in both cases, lower than the one-year average beat rate.  And the magnitude of earnings beats continued modest, averaging 1.8% above consensus versus 3.1% in the second quarter and 6.5% for the previous year.

 

 

 
Macro Overview

Macro Overview

Economic headlines in November were again mixed.  As in October, payroll numbers declined but were better than expected.  Unemployment ticked up slightly to 3.7%.  The Department of Commerce revised estimate of third quarter GDP growth was 2.9%, substantially better than its initial estimate.  Factory orders and retail sales were strong, but housing continued weak.

In its ongoing battle against inflation, the Fed again raised interest rates by 0.75%.  However, encouraging news came at month’s end, as Fed Chair Powell signaled that future interest rate increases would be more moderate.

But perhaps the most significant news was the Consumer Price Index reading on November 10, showing that inflation dropped more than expected from 8.2% annualized to 7.7%.  As a measure of how significantly inflation has impacted equity valuations, the reaction to the encouraging inflation news was a one-day gain of 5.5% in the S&P 500 and 7.5% in the NASDAQ Composite–their largest one-day gains in 2 ½ years.  This suggests that there is significant upside to the market as inflation gets under control.

 

 

 
Additional Disclosures and Privacy Notice

Additional Disclosures

Performance data for OPI reflect the reinvestment of dividends and other earnings on the fund’s assets.  Performance data for the major indices reflect only changes in the value of those indices, and would be higher if dividends were included. However, the index data do not reflect fees that would be paid to index fund managers and transaction costs that would be incurred when their component stocks are bought or sold, while OPI’s data do reflect quarterly fees and expenses incurred by the fund.  The information provided is believed to be reliable, but its accuracy or completeness is not warranted. This material is not intended as an offer or solicitation for the purchase or sale of any stock, bond, mutual fund, or any other financial instrument. The views and strategies discussed herein may not be appropriate and/or suitable for all investors. This material is meant solely for informational purposes, and is not intended to suffice as any type of accounting, legal, tax, or estate planning advice. Any and all forecasts mentioned are for illustrative purposes only and should not be interpreted as investment recommendations.

 

Privacy Notice

Federal privacy laws require that we explain to you how we handle “nonpublic personal information.”  This is information we receive or develop about you in the course of our relationship with you.  It includes information you provide to us orally or in the Confidential Investor Questionnaire or other forms, and information we learn about you in the course of providing services to you.

We do not disclose nonpublic personal information about you to third parties, except in certain limited circumstances.  These circumstances include (a) disclosure to our attorneys, auditors, prime brokers, or custodians in the course of providing services to you, (b) disclosure with your consent, or (c) disclosure where required by law or judicial process, such as a court order.

We also restrict your nonpublic personal information to those employees who need to know such information in order to provide services to you.  And we maintain physical, electronic, and procedural safeguards to protect your nonpublic personal information.

Please call us at (310) 392-7300 if you have any questions.