Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

June 2017
Market Update
(all values as of 10.30.2020)

Stock Indices:

Dow Jones 26,501
S&P 500 3,269
Nasdaq 10,911

Bond Sector Yields:

2 Yr Treasury 0.14%
10 Yr Treasury 0.88%
10 Yr Municipal 0.94%
High Yield 5.72%

YTD Market Returns:

Dow Jones -7.14%
S&P 500 1.21%
Nasdaq 21.61%
MSCI-EAFE -12.61%
MSCI-Europe -15.66%
MSCI-Pacific -7.42%
MSCI-Emg Mkt -1.00%
 
US Agg Bond 6.32%
US Corp Bond 6.45%
US Gov’t Bond 7.40%

Commodity Prices:

Gold 1,878
Silver 23.72
Oil (WTI) 35.71

Currencies:

Dollar / Euro 1.17
Dollar / Pound 1.29
Yen / Dollar 104.44
Dollar / Canadian 0.75
 

Fund Overview

Equities were mixed in June, with the S&P 500 up fractionally and the NASDAQ and the Ocean Park funds down modestly.  Our health care stocks were up, but our technology stocks lost ground.  In particular, the chipmakers and the chip equipment stocks, which were standouts in May, faltered in June.  As a result, we trailed the major indices for the month, but remain ahead of the S&P 500 and the Dow for the year to date.

During June, we added to positions in the consumer discretionary and service, health care, materials and processing, and technology sectors, and reduced positions in the producer durables sector.  In addition, to maintain balance in the portfolio, we increased our short position in the QQQ ETF (which is reflected in the Asset Allocation chart in the undefined category).  We finished the month at about 95% net long, up from about 87% at the end of May.

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 - June 2017

Equity Overview

Market dynamics reversed in June as value stocks outpaced growth stocks for the first time in months. The financial and health care sectors outperformed, while the technology and consumer sectors underperformed.

Notably, the FAANG stocks (Facebook, Apple, Amazon, Netflix, and Google), which together comprised about $2.2-trillion in market capitalization at the start of the month, all fell in June at rates ranging from modest (Facebook down 1%) to substantial (Netflix down 8%).

On the other hand, bank stocks rose smartly as all 34 of the largest institutions passed the Fed’s stress tests for the first time since the tests were initiated seven years ago.

 

 

 
Macro Overview - June 2017

Macro Overview

Economic data reported in June continued uneven.  Retail sales, durable goods orders, and job growth were weak.  Employers added a lackluster 138,000 jobs, capping a 3-month period with the smallest gains in five years.  On the other hand, housing rebounded and consumer sentiment remained near multiyear highs.  And the Commerce Department again raised its estimate of first quarter growth, from 1.2% to 1.4% (recall that the original estimate was 0.7%).

As expected, the Fed raised short-term interest rates by 0.25% (to 1.25%) and maintained its forecast for one more increase this year.  The markets yawned.

The administration’s economic agenda remained stuck in the mud.  The promise to “repeal and replace” Obamacare remained unfulfilled, and the Congressional Budget Office predicted varying degrees of catastrophe would result from the plans proposed in the Senate.  The House made little if any progress on the budget.  Similarly, there was no discernible movement on infrastructure or tax reform.

In international news, the recovery in Europe continued, with economic growth strong and unemployment falling.  As a result, the European Central Bank indicated that it may start winding down its monetary stimulus this year by reducing its monthly bond purchases (thus tracking the strategy initiated by the Fed 3 ½ years ago).

 

 

 
Additional Disclosures - June 2017

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.