Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

May 2021
Market Update
(all values as of 07.29.2022)

Stock Indices:

Dow Jones 32,845
S&P 500 4,130
Nasdaq 12,390

Bond Sector Yields:

2 Yr Treasury 2.89%
10 Yr Treasury 2.67%
10 Yr Municipal 2.27%
High Yield 7.50%

YTD Market Returns:

Dow Jones -9.61%
S&P 500 -13.34%
Nasdaq -20.80%
MSCI-EAFE -17.07%
MSCI-Europe -18.52%
MSCI-Pacific -14.20%
MSCI-Emg Mkt -19.34%
 
US Agg Bond -8.16%
US Corp Bond -11.61%
US Gov’t Bond -9.13%

Commodity Prices:

Gold 1,782
Silver 20.32
Oil (WTI) 98.35

Currencies:

Dollar / Euro 1.01
Dollar / Pound 1.21
Yen / Dollar 135.01
Canadian /Dollar 0.77

Portfolio Overview

Ocean Park Investors Fund lost 0.65%* in May.  The S&P 500 rose 0.55% and the NASDAQ Composite lost 1.53%.  The fund’s financial stocks gained ground, but consumer and technology stocks, which comprise much of the fund’s assets, retreated.

During May, we increased positions in the autos and transportation sector and the materials and processing sector, and reduced positions in the consumer discretionary and service sector and the technology sector.  We finished the month at about 95% net long, unchanged from April.

 

 

 

 

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

Sector performance in May was varied.  Energy, materials, and financials led the way, while utilities, consumer, and technology were laggards.  Value stocks outperformed growth stocks.  Volatility was benign.

First quarter earnings results reported in May continued the impressive pace in April. With 95% of S&P 500 companies reporting, the blended earnings growth rate was +51.9%, better than the +45.8% rate at the end of April and much better than analysts’ projections of +23.8% at the beginning of the quarter.  In addition, 86% of companies reporting beat consensus earnings estimates and 76% beat consensus revenue estimates, in both cases well ahead of the one-year and five-year averages.

As for future performance, 62% of the S&P 500 companies that have issued earnings guidance for the second quarter have issued positive guidance.  This is well above the five-year average of 35%.

 

 

 
Macro Overview

Macro Overview

Economic indicators reported in May were mixed.  The economy is clearly in expansionary mode, as indices reflecting manufacturing and services activity were strong.  Paradoxically, employment was relatively weak as the economy added significantly fewer jobs than expected and unemployment inched up to 6.1%.

Consumer prices reported in May showed a year-over-year increase of 4.2%, the highest level since September 2008.  Normally this might cause a rise in bond yields, but the bond markets were quiet.  In fact, the rate on the benchmark 10-year T-note actually fell during the month from 1.63% to 1.58%.  It appears that investors have absorbed the Fed’s repeated assurances that the current inflationary landscape is temporary and that the Fed will not be raising rates for at least 18 months.

Meanwhile, the U.S. made dramatic progress in May in the fight against Covid-19.  While new variants appeared to predominate, the impact of widespread vaccination was apparent.  During the month, the number of daily new cases dropped from 54,368 to 9,458 and the number of new hospital admissions per 100,000 population dropped from 1.47 to 0.82.

 

 

 
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.