Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

January 2019
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-EAFE 5.06%
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

Currencies:

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

Fund Overview

Equities rallied strongly in January.  The major indices and the Ocean Park funds posted mid- to high-single digit returns and largely erased the December sell-off.  The funds continue to outperform the HFRI Equity Hedge Index, which rose 5.49%.  Gains were strong across all sectors, particularly consumer and technology stocks.  Standouts included the FANG stocks (Facebook, Amazon, Netflix, and Alphabet–a.k.a. Google).

During January, we added to positions in the consumer discretionary and service sector, and reduced positions in the technology, financial services, and health care sectors.  We ended the month at about 85% net long, down from about 95% in December.

A schedule showing the performance of the Investors Fund is included below, along with our Asset Allocation Chart. 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 - January 2019

Equity Overview

Investors favored value stocks over growth stocks in January.  But the notion of value expanded somewhat as investors sought bargains among growth stocks whose price-earnings ratios declined meaningfully after the December losses.  At month’s end, the forward 12-month price-earnings ratio for the S&P 500 was 15.7, still below the five-year average.

Fourth quarter earnings reported in January were not as noteworthy as in prior quarters.  With 46% of S&P 500 companies reporting, the blended growth rate for earnings was 12.4%.  Normally this would be an impressive number, but it was the first time since Q42017 that the blended growth rate was below 20%.  In addition, surprises were mixed as 70% of companies beat consensus earnings estimates (below the five-year average) and 62% beat consensus revenue estimates (above the five-year average).

 

 

 
Macro Overview - January 2019

Macro Overview

A number of positive developments bolstered the January rebound.  Probably most significant was a new tone from the Federal Reserve which struck a welcome note of caution, indicating that its recent sequence of rate hikes would be ending and that it would be holding rates steady for a time.  In addition, economic data reported in January were generally positive, with strong results in manufacturing and employment (although housing continued weak).  Also, trade talks with China took a promising turn in January, suggesting that a deal might be on the horizon.

Last, and probably least, the border wall impasse between Congress and the president—which kept the government partially closed for most of the month—was resolved temporarily, with a short-term deal to reopen the government.

 

 

 

 

 
Additional Disclosures - January 2019

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.