EFTA01176769.pdf

From: US 61O cbs.gioapmorgan.com> To: Undisclosed recipients:; Subject: JPM View 05.11.2012 Date: Fri, II May 2012 21:41:413 +0000 Attachments: JPM_View_05.11.2012-pdfzip lane -Images: image003.png J.P.Morgan Global Asset AlloartIon JP Mown Goae6ad NA. JP Mogan Sammie Ltd May 11.2012 The J.P. Morgan View Will Europe be able to circle the wagons? Jan Loayiec • Asset Allocation —Greater pohlwal ask in Europe forte in to reduce equity (I -212) alt 6474 longs. while staking in credit. m our asset allocation pcetfoho. jam loroysallanagan can • Economics — Weaker data for Apnl delay the expected bounce back in the John Normand Clime* eronamy Global growth (Meath unchanged fromJanuary. (44.20) 7325.5122 pin normandera San can • Fixed Income — We add to Euro area hedges Melees PanIghtzoglou • Equines— Stay long US vs Euro area equities (4420) 77774246 fulic.bos panartrogkoufilprnagan can • Credit — We continue to fawn US credit and hold NECOEM markets in EN • For riga ear aaaaa — Add to USD longs. as adverse Greek news should push Some* Mac Cocain the earn down much more than upside created by positive Greek newt (44.20) 7777.21906 Manua.mr9clanthcolrgan tom • C ommodities — Higher oil once m H2. but with elevated two.sarlednt Matthew Lehmann (44.20) 7777.1830 • Equirt and conunoday markets endows tans week. and bands and Medals, manna. m lehmannemsnagan cons are upon political paralysisIn Greeceled WealOn battle economic data. Credit in COntnisa performed better than other nsk markets with spreadsonly Lao Evans (4/-20) 7742.2537 • few bums points wider. largely offset by lower underlying bond yields land a avanAtiomorgan can • Over the pa" month. equities are now down some 7% though still up on the year (chart on right) This is close to the limit of what one can call a profit. TMreturns nymph May to taking correction. and DM risks tinning into a broader and deeper downside t. mon ranger corn move Relanve to where we were a few weeks ago. there is now a near.term downside nsk. but signals for 3-6 months our still sound positive tows This $40$10 suggests retaining upside expose ro to equities and credit. %stale flat on MHO 10•11 tom:not-Win and bonds. focusing on the US nurket where there is least EMS Col downside nsk adding sane near.tem downside protection and keeping YfHM overall tactual nsk below average In our own GNIOS asset allocation model 0.04. portfolio. we an the equity long position in halt while keeping net long exposures in credit WO *c a' Two • Ha does one gauge the various forces driving nsk market') Staring with the CM Fr ecaccarty cur 2012 and 2011 growth forecasts. at 2 2% and 264. remain 116 IV Gad. UNC1I-ed since late Jamtary Consensus s WII1111/b; not moving The menape MO Europe on the world economy remains 'low but stable'. For the CS. unchanged wieldy claims and a pop in Michigan consumer confidence are neutralising leal5ords- downside risks from recent weakness mob growth We arecomfortable with US FleaIlan our 2 S%call for Q? 1.ess encouraging were the Apnl data front China that Olt forced in to lower our G2 forecast from 7 8% to 7 0% saar IPand retail sales OcOolGoe8rch" growth are slurring into Q2 Ow own and consensus projections on a rebomd in HZ depend on morytary and fiscal easing measures The next reserve Es.** Feel ham' requirement cut should come next month. followed by fiscal stimulus in the Is act stain/ WO TR It • Pnce momentum is now slightly positive for nsk assets down from strongly •••• a • 0.0. Omen AS*.as LW so That is because short-term momentum — the last month — s negative Is. im•Asillwasa raw vs..., creasse Kona"St IV but the more reliable 6-mouth momennun. that is the basis of our rule-based n DJ.•t The certifying analyst is mdrated by an m See page 7 for analyst WWW.morganmarettorn certification and unponant legal and regulatory disclosures This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at http://www.jpmorgan.comipages/disclosureskmail. EFTA01176769