Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

January 2020
Market Update
(all values as of 11.30.2020)

Stock Indices:

Dow Jones 29,638
S&P 500 3,621
Nasdaq 12,198

Bond Sector Yields:

2 Yr Treasury 0.16%
10 Yr Treasury 0.84%
10 Yr Municipal 0.71%
High Yield 4.79%

YTD Market Returns:

Dow Jones 3.86%
S&P 500 12.10%
Nasdaq 35.96%
MSCI-EAFE 0.83%
MSCI-Europe -1.42%
MSCI-Pacific 4.67%
MSCI-Emg Mkt 8.11%
 
US Agg Bond 7.36%
US Corp Bond 9.41%
US Gov’t Bond 8.83%

Commodity Prices:

Gold 1,780
Silver 22.72
Oil (WTI) 45.06

Currencies:

Dollar / Euro 1.19
Dollar / Pound 1.33
Yen / Dollar 104.06
Dollar / Canadian 0.76

Fund Overview

Equities were mixed in January.  The S&P 500 and the Dow declined while the NASDAQ Composite rose.  The Ocean Park funds posted solid gains, outperforming the major indices as well as the HFRI Equity Hedge Index which was down 1.03%.  Tesla, Amazon, Alphabet (Google) and a variety of technology stocks buoyed our results.

During January, we added to positions in the autos and transportation, financial services, and producer durables sectors, and reduced positions in the consumer discretionary and service and the technology sectors.  We ended the month at about 98% net long, unchanged from 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 2020

Equity Overview

Investors in January favored growth stocks over value stocks.  Technology and utilities were the strongest while energy was the weakest. Volatility was subdued until the last week of the month, when concern about the coronavirus impacted the market.

Fourth quarter corporate earnings reported in January were modest. With 45% of S&P 500 companies reporting, the blended growth rate was negative at -0.3%, but this was somewhat better than consensus expectation of -1.6% at the end of the quarter.  In addition, 69% of companies beat consensus earnings estimates (below the one-year and five-year averages) while 65% beat consensus revenue estimates (better than the one-year and five-year averages).

 

 

 

 
Macro Overview - January 2020

Macro Overview

Economic data reported in January were generally positive.  Retail sales, housing starts, and new home sales all showed gains, unemployment remained low, and consumer sentiment improved.  The Commerce Department initial estimate of 4th quarter GDP growth was 2.1%, reassuring in light of challenges to the economy (but well below the 3-4% rate targeted by the administration).  The weak link was manufacturing, which declined for the fifth consecutive month.

The Fed left interest rates unchanged and gave no indication that rates would rise anytime soon, as inflation remained stubbornly below its 2% target.

Internationally, the primary focus was the appearance of coronavirus in China, which resulted in widespread quarantine, the shuttering of manufacturing facilities, and anxiety about the impact on global growth.  This overshadowed several other events which in a different environment could have dominated headlines:  the assassination of a prominent Iranian general by the United States; the consummation of Brexit, as Britain formally withdrew from the European Union; and the virtual collapse of growth in the European economy in the 4th quarter, as statistics indicated a gain of 0.1% and a renewed risk of recession.

 

 

 
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.