Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

September 2023
Market Update
(all values as of 03.29.2024)

Stock Indices:

Dow Jones 39,807
S&P 500 5,254
Nasdaq 16,379

Bond Sector Yields:

2 Yr Treasury 4.59%
10 Yr Treasury 4.20%
10 Yr Municipal 2.52%
High Yield 7.44%

YTD Market Returns:

Dow Jones 5.62%
S&P 500 10.16%
Nasdaq 9.11%
MSCI-Europe 4.60%
MSCI-Pacific 5.82%
MSCI-Emg Mkt 1.90%
US Agg Bond -0.78%
US Corp Bond -0.40%
US Gov’t Bond -0.72%

Commodity Prices:

Gold 2,254
Silver 25.10
Oil (WTI) 83.12


Dollar / Euro 1.08
Dollar / Pound 1.26
Yen / Dollar 151.35
Canadian /Dollar 0.73

Portfolio Overview

Ocean Park Investors Fund fell 5.06%* in September, while the S&P 500 fell 4.87% and the NASDAQ Composite fell 5.81%.  September lived up to its reputation as the weakest month for stock performance, as markets declined across the board.

During the month, we increased positions in the consumer discretionary and service sector and the technology sector.  We also reduced exposure to the SPY and QQQ ETFs.  Notable changes included:  initiating positions in Gilead Sciences, Braze, and Globus Medical; exiting RH (formerly Restoration Hardware) ahead of a disastrous earnings report; and selling Micron Technology before and after a lackluster earnings report.  We finished the month at about 97% net long, unchanged from 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

Ten of eleven sectors in the S&P 500 declined in September, with energy the only gainer and real estate the worst loser.  (Mortgage rates rose to a new 23-year high of 7.41% and pending home sales were down 18.7% year-over-year).  Counterintuitively, volatility was low as the S&P 500 moved more than 1% on only 3 of 20 trading days.  Value and growth stocks were hit about equally.   The 12-month forward price/earnings ratio for the S&P 500 declined to 18, below the 5-year average of 18.7, indicating that stock valuations are reasonable.



Macro Overview

Macro Overview

The threatened shutdown of the federal government dominated economic headlines in September, with disaster narrowly avoided through a temporary spending deal which put off a reckoning until November 17.

On the inflation front the glass was half empty or half full, depending on your perspective.  The consumer price index rose to 3.7% year-over-year, up from 3.2% the previous month.  However, the year-over year increase in the core CPI (excluding food and energy) was its smallest in nearly two years.

Similarly, the employment landscape was both cautionary and encouraging.  Job growth declined to 187,000, below the recent average of 200,000 per month.  And unemployment rose from 3.5% to 3.8%.  But the increase in unemployment was entirely caused by more people looking for work (“labor force participation”), which is a sign of an improving economy.  Speaking of the economy, recession fears seem to be subsiding.  Goldman Sachs, which issues regular estimates of the likelihood of a recession, reduced its odds from 20% to 15%.

The Fed kept interest rates unchanged but indicated that it may raise rates once more this year.  Although not widely reported, the Fed has made significant progress in reducing its balance sheet (“quantitative tightening”), having reduced its bond holdings by $815-billion since June 2022.



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.