Ocean Park Capital Management

2503 Main Street

Santa Monica, CA 90405

Main: 310.392.7300

Daily Performance Line:  310.281.8577

September 2017
Market Update
(all values as of 09.30.2020)

Stock Indices:

Dow Jones 27,781
S&P 500 3,363
Nasdaq 11,167

Bond Sector Yields:

2 Yr Treasury 0.13%
10 Yr Treasury 0.69%
10 Yr Municipal 0.84%
High Yield 5.77%

YTD Market Returns:

Dow Jones -2.65%
S&P 500 4.09%
Nasdaq 24.46%
MSCI-EAFE -8.92%
MSCI-Europe -10.53%
MSCI-Pacific -6.19%
MSCI-Emg Mkt -2.93%
US Agg Bond 6.79%
US Corp Bond 6.64%
US Gov’t Bond 8.04%

Commodity Prices:

Gold 1,892
Silver 23.37
Oil (WTI) 39.88


Dollar / Euro 1.17
Dollar / Pound 1.28
Yen / Dollar 105.60
Dollar / Canadian 0.74

Fund Overview

Equities gained ground in September, as did the Ocean Park funds.  Semiconductor manufacturers and equipment makers generated extraordinary results, helping the funds to outperform all of the major indices for the month.  We continue to outperform most of the major indices for the year to date.

During September, we added to positions in the consumer discretionary and service and   producer durables sectors, and reduced positions in the financial services and autos and transportation sectors. We also added to our long positions in the technology sector, but partially hedged our exposure by taking short positions in other individual technology stocks and increasing our short position in the technology-heavy QQQ ETF.  We finished the month at about 82% net long, down from about 97% at the end of August.

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 - September 2017

Equity Overview

Stocks declined at the start of September in reaction to Hurricanes Harvey and Irma and another North Korean nuclear test, and appeared poised for a typical September reversal.  But they rebounded quickly to post broad increases, with the three major indices reaching all-time highs during the month. Energy and financial services stocks were particularly strong, while utilities were weak.

Investors continued to favor stocks with positive earnings and sales momentum.  But reversing the trend for most of the year to date, small cap stocks significantly outperformed large cap stocks.




Macro Overview - September 2017

Macro Overview

Economic data in September was mixed.  Manufacturing activity was strong, and unemployment dropped to 4.2%.  But the Labor Department reported the loss of 33,000 jobs in September, possibly related to the hurricanes in Texas and Florida.  In any case, these were the first monthly job losses in seven years.  Housing and consumer confidence also faltered.

As expected, the Fed kept interest rates unchanged in September but indicated that one more hike is likely this year even though inflation remains below the Fed target of 2%.  Their view now seems to be that inflationary pressure is building and if they wait until inflation hits their target, they may find themselves in a reactive rather than a proactive mode.

The administration revealed its long-awaited tax proposal at month’s end, asserting that “the biggest winners will be the everyday American workers.”  Analysts quickly disputed this interpretation, pointing out that two of the most significant aspects of the proposal are a reduction in the corporate income tax from 35% to 20%, and the elimination of the estate tax (which presently affects only the wealthiest 0.2% of Americans).  The proposal also abandons any pretense of fiscal conservatism, as consensus estimates project that it will add $2 trillion to $5.5 trillion to the national debt.  The administration asserts that this shortfall will be offset by increased economic activity, a favorite supply-side theory.

In Germany, Angela Merkel will remain chancellor as her party prevailed in the election.  However, the far right made historic gains, resulting in their first seats in the Bundestag since World War II.  As the far right is ultra-nationalist, it is unclear how their participation in government will impact German policy as the backbone of the European Union—and therefore, how it will impact the viability of the European Union itself.



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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.