Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

August 2022
Market Update
(all values as of 10.31.2022)

Stock Indices:

Dow Jones 32,732
S&P 500 3,871
Nasdaq 10,988

Bond Sector Yields:

2 Yr Treasury 4.51%
10 Yr Treasury 4.10%
10 Yr Municipal 3.40%
High Yield 8.92%

YTD Market Returns:

Dow Jones -9.92%
S&P 500 -18.76%
Nasdaq -29.77%
MSCI-EAFE -25.09%
MSCI-Europe -25.57%
MSCI-Pacific -24.27%
MSCI-Emg Mkt -31.16%
 
US Agg Bond -15.72%
US Corp Bond -19.56%
US Gov’t Bond -16.15%

Commodity Prices:

Gold 1,640
Silver 19.32
Oil (WTI) 86.83

Currencies:

Dollar / Euro 0.99
Dollar / Pound 1.15
Yen / Dollar 1.48
Canadian /Dollar 0.73
 

Portfolio Overview

Ocean Park Investors Fund fell 2.64%* in August.  The S&P 500 fell 4.24% and the NASDAQ Composite fell 4.64%.  Technology shares were weak, as reflected in the SOXX semiconductor ETF (which we are short, as a partial hedge) losing 9.2% for the month.

During August, we reduced positions in the producer durables sector and increased positions in the consumer staples and financial services sectors.  We finished the month at about 92% net long, down slightly from about 93% in July.

 

 

 

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 except energy and utilities declined in August.  Value stocks significantly outperformed growth.  Volatility was moderate until the last four days of trading, when the S&P 500 declined 5.8% on disappointing comments from the Fed on inflation and interest rates.

Second quarter earnings reported in August continued resilient.  With 98% of S&P 500 companies reporting, 75% have beaten consensus earnings expectations and 71% have beaten consensus revenue expectations.

 

 

 
Macro Overview

Macro Overview

Economic data reported in August were mixed.  Payrolls and retail sales showed gains, and unemployment declined to 3.5%.  But housing remained weak as higher interest rates pressured sales.

Inflation once again dominated headlines in August.  For most of the month, markets shrugged off Fed comments about the need to fight inflation with higher interest rates.  But in a speech on August 26, Chairman Powell was unequivocal.  He committed to “use our tools forcefully” and “for some time,” indicating that it would inflict “some pain” which he described as one of the “unfortunate costs of reducing inflation.”  Markets took it hard.  The S&P 500 dropped 3.5% that day, and further by end of the month.

Notwithstanding the market action, there are some encouraging signs in the underlying economy.  All          of the 22 million jobs lost in the pandemic have been recovered. Supply chain issues are improving, as ocean container shipping costs have fallen 64% in the past year.  Gasoline prices have shown steady declines, along with the price of oil.  So, on the critical question—whether the U.S. economy is headed for recession—the jury is still out.

 

 

 
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.