Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

June 2018
Market Update
(all values as of 08.31.2020)

Stock Indices:

Dow Jones 28,430
S&P 500 3,500
Nasdaq 11,775

Bond Sector Yields:

2 Yr Treasury 0.14%
10 Yr Treasury 0.72%
10 Yr Municipal 0.81%
High Yield 5.38%

YTD Market Returns:

Dow Jones -0.38%
S&P 500 8.34%
Nasdaq 31.24%
MSCI-EAFE -6.23%
MSCI-Europe -7.39%
MSCI-Pacific -4.42%
MSCI-Emg Mkt -1.18%
 
US Agg Bond 6.85%
US Corp Bond 6.94%
US Gov’t Bond 8.09%

Commodity Prices:

Gold 1,973
Silver 28.43
Oil (WTI) 42.82

Currencies:

Dollar / Euro 1.19
Dollar / Pound 1.33
Yen / Dollar 105.37
Dollar / Canadian 0.76
 

Fund Overview

Equities were mixed in June, with slight gains and losses.  The Ocean Park funds posted fractional losses but again outperformed the HFRI Equity Hedge Total Index, which lost 0.86%.

During June, we added to positions in the materials and processing sector and the consumer discretionary and service sector, and reduced positions in the technology sector.  We finished the month at about 89% net long, down from about 90% at the end of May.

A schedule showing the performance of the Investors Fund is included below, along with our Asset Allocation Chart. 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 - June 2018

Equity Overview

Small cap stocks outperformed large cap stocks in June, for the third straight month.  However, value stocks outperformed growth stocks for the first time this year.

Consumer stocks gained but technology stocks, particularly in the semiconductor space, were weak.  Financial stocks also declined.

 

 

 
Macro Overview - June 2018

Macro Overview

Trade concerns dominated economic headlines in June.  The administration announced 25% tariffs on $50-billion of Chinese exports, whereupon China accused the U.S. of starting a trade war and threatened retaliatory tariffs on $50-billion of U.S. goods.  The administration then warned that if China implemented its threat, the U.S. would impose tariffs on an additional $200-billion in Chinese exports.  Fearing that matters will spiral out of control, business groups including the national Chamber of Commerce have expressed increased concern, and are raising doubts about the president’s comment that “trade wars are good and easy to win.”

Notwithstanding trade worries, other economic news was generally positive.  Statistics reported in June reflected strength in manufacturing, retail, and housing.

As expected, the Fed increased the federal funds rate by 0.25%, to a range of 1.75-2.00 %.  It also projected that unemployment will drop to 3.6%, and signaled that it will likely increase rates twice more this year.

Even with the tightening labor market, wage growth remains modest.  There was some thought that companies would use savings from tax reform to reward workers with higher salaries, but that has not happened.  Instead, companies continue to use their excess cash to buy back their stock at a furious pace.  Repurchases hit an astonishing record of $433-billion in the second quarter, almost doubling the previous record of $242-billion set in the first quarter.

 

 
Additional Disclosures - June 2018

 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.