Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

July 2021
Market Update
(all values as of 07.30.2021)

Stock Indices:

Dow Jones 34,935
S&P 500 4,395
Nasdaq 14,672

Bond Sector Yields:

2 Yr Treasury 0.19%
10 Yr Treasury 1.24%
10 Yr Municipal 0.85%
High Yield 4.04%

YTD Market Returns:

Dow Jones 14.14%
S&P 500 17.02%
Nasdaq 13.85%
MSCI-EAFE 8.08%
MSCI-Europe 12.06%
MSCI-Pacific 1.30%
MSCI-Emg Mkt -1.04%
 
US Agg Bond -0.51%
US Corp Bond 0.08%
US Gov’t Bond -0.68%

Commodity Prices:

Gold 1,816
Silver 25.55
Oil (WTI) 73.81

Currencies:

Dollar / Euro 1.18
Dollar / Pound 1.39
Yen / Dollar 109.67
Dollar / Canadian 0.80

Portfolio Overview

Ocean Park Investors Fund gained 1.02%* in July.  The S&P 500 rose 2.27% and the NASDAQ Composite rose 1.16%.  As in June, the Fund’s consumer and technology stocks led the way and financial stocks were weak.  Standouts included Crocs (up 17%) and AMD (up 13%).

During July, we increased positions in the consumer discretionary and services sector, and reduced positions in the financial services sector, the autos and transportation sector, and the materials and processing sector.  In addition, we continued to reduce our short position in the QQQ ETF.  We finished the quarter at about 98% net long, up from about 97% in June.

 

 

 

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 four. Past performance does not guarantee future results.

 
Equity Overview

Equity Overview

All market sectors except financials and energy gained in July.  Health care stocks gained the most and energy stocks lost the most. Growth stocks generally outperformed value stocks.  Small cap stocks, reflected in the Russell 2000 index, lost over 3%.

Second quarter earnings results reported in July significantly exceeded expectations.  With 59% of S&P 500 companies reporting, the blended earnings growth rate came in at +85.1%, significantly better than the consensus of +63.1%.  (As happened with first quarter earnings, these numbers reflect a year-over-year increase, so the comparison is to the weak earnings reported in the second quarter of 2020 in mid-pandemic.)  More significantly, 88% of companies reporting beat consensus earnings estimates and 88% beat consensus revenue estimates, in both cases well ahead of the one-year and five-year averages.

 

 

 
Macro Overview

Macro Overview

Economic data reported in July were generally positive, particularly in manufacturing and employment.  Non-farm payrolls rose by a robust 850,000 jobs.  Retail sales were also strong.  The Commerce Department estimated that second quarter GDP growth was 6.5% annualized, an astonishingly high number—except that it undershot the consensus which projected a gain of 8.4%.

Inflation continued to increase. Consumer prices reported in July rose 5.4% year-over-year, higher than the 5.0% increase reported in June, and the highest rate since 2008.

Nonetheless, the Fed left interest rates unchanged and maintained its accommodative monetary policy.  Chairman Powell stated that, while the economy was making substantial progress, “we still have some ground to cover on the labor market side” before the Fed would consider reducing support for the economy.

 

 

 
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.