Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

February 2023
Market Update
(all values as of 04.30.2024)

Stock Indices:

Dow Jones 37,815
S&P 500 5,035
Nasdaq 15,657

Bond Sector Yields:

2 Yr Treasury 5.04%
10 Yr Treasury 4.69%
10 Yr Municipal 2.80%
High Yield 7.99%

YTD Market Returns:

Dow Jones 0.34%
S&P 500 5.57%
Nasdaq 4.31%
MSCI-EAFE 1.98%
MSCI-Europe 2.05%
MSCI-Pacific 1.82%
MSCI-Emg Mkt 2.17%
 
US Agg Bond 0.50%
US Corp Bond 0.56%
US Gov’t Bond 0.48%

Commodity Prices:

Gold 2,297
Silver 26.58
Oil (WTI) 81.13

Currencies:

Dollar / Euro 1.07
Dollar / Pound 1.25
Yen / Dollar 156.66
Canadian /Dollar 0.79
 

Portfolio Overview

Ocean Park Investors Fund gained 0.56%* in February.  The S&P 500 lost 2.61% and the NASDAQ Composite lost 1.11%.  Technology stocks again bolstered portfolio performance, led by Nvidia which continued its rebound with a gain of 19%.

During February, we increased positions in the technology sector and the consumer discretionary and service sector and reduced exposure to the health care sector and the materials and processing sector.  We finished the month at about 93% net long, down from about 95% in January.

 

 

 

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

Ten of eleven sectors in the S&P 500 lost ground in February.  Information technology was the only gainer and energy was the worst loser.  Growth stocks outperformed value.  Volatility continued elevated, as the S&P 500 moved more than 1% on 9 of 19 trading days. The forward price/earnings ratio for the S&P 500 near month end was 17.7, barely changed from 17.8 in January and still well below the 5-year average of 18.5.

Fourth quarter earnings reported in February echoed the results in January.  With 94% of S&P 500 companies reporting, 68% beat consensus earnings expectations and 66% beat consensus revenue expectations, once again lower than the one-year and five-year average beat rates.  And the magnitude of earnings beats continued weak at 1.2% above consensus—down from 1.5% in January and well below the one-year average of 4.5% and the five-year average of 8.6%.

 

 

 

 
Macro Overview

Macro Overview

Inflationary concerns continued to dominate economic headlines in February.  Most notable was the bounce in new jobs reflected in non-farm payrolls, which rose a startling 517,000—significantly higher than expectations of 189,000.  Unemployment fell to 3.4%, the lowest rate since 1969.  And the consumer price index rose 6.4% year-over year, marginally lower than the previous month but higher than consensus expectations of 6.2%.  Taken together, these statistics suggested that the economy was still “hot” and dampened hopes that interest rates might come down later this year.  For its part, the Fed raised the short-term interest rate by 0.25% to a range of 4.50-4.75%.

Geopolitical issues remained unresolved as the war in Ukraine showed no sign of ending, and indeed worsened as Russia expanded its bombing of civilian targets.  There was some thought that the U.S. could induce China to play a constructive role.  But then the Chinese “spy balloon” appeared and was shot down by Air Force fighter jets, straining already tense relations and dampening those hopes.

 

 

 

 
Additional Disclosures

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.

 

 

 

 

 

Ocean Park Capital Management · 2503 Main Street · Santa Monica CA 90405 · 310-392-7300