Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

September 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

Ocean Park Investors Fund fell 7.75%* in September.  The S&P 500 fell 9.34% and the NASDAQ Composite fell 10.50%.  Technology stocks were weak. Semiconductor stocks—in which the fund maintains an overweight position—were particularly weak, as they suffered from both supply and demand issues.  However, we see these issues as transitory and view the long-term outlook for semiconductors as positive. 

During September, we increased positions in the consumer discretionary and service sector and the financial services sector.  We also increased our short hedge in the SPY ETF and finished the month at about 93% net long, up slightly from about 92% in August.

 

 

 

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 

All sectors in the S&P 500 declined in September.  Interest-sensitive sectors, such as utilities, real estate, and technology sustained double-digit losses.  Most of the damage hit on September 13, when the S&P 500 dropped 4.3% after the Labor Department reported that inflation in August was worse than expected.  Value stocks continued to outperform growth.  Volatility was extreme as the S&P 500 moved more than 1% on 13 of 22 trading days, with 9 of those moves to the downside.

 

 

 

 
Macro Overview

Macro Overview

Economic data reported in September were inconclusive. Manufacturing showed marginal gains, retail sales improved, and consumer confidence rose. But payrolls declined and unemployment ticked up to 3.7%. Housing was mixed.

Inflation remained elevated at 8.3%. In response, The Fed raised short-term interest rates by another 0.75% to a range of 3.0% to 3.25%–the highest rate since 2008. Chairman Powell said “The FOMC is strongly resolved to bring inflation down to 2%, and we will keep at it until the job is done.”

As worldwide economic activity declined and demand for oil showed signs of weakness, there was hope that lower energy prices might lessen inflationary pressures. But those hopes were put to rest when OPEC announced it would support current prices by instituting significant production cuts.

Taking all of these factors into account, the Bloomberg U.S. Recession Probability Index now has the odds of a recession at 50-50.

 

 

 

 
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.