EFTA01181941.pdf

From: US GIG To: Undisclosed recipients:: Subject: JPM View 11.02.2012 Date: Sun, 04 Nov 2012 16:40:36+0000 Attachments: JPM_View_11.02.2012-pdf.zip Inline-Images: image003.png EFTA01181941  Global Asset Allocation Morgan 02 November 2012 The . Morgan View Looking beyond the stormy weather • Asset allocation — We retain a medium-term value approach. focused on Global ASSet Allocation overweight m credit and equities. and based on softening of the fiscal cliff and Jan Loeys AC gentle rebound in global growth into Q1. 11-212) 834-5874 • Economics — Better FhlIs and US jobs support a coming rebound in growth. but not enough to raise forecasts. We lower Euro area Q1 to fiat. lPtlevan Gun Bait NA John Normand • Fixed Income — Our systematic duration signals call for a small short position. µF20)7134.1110 • Equities — A cyclicals overweight may be a better way to express a positive Rtriwinctionwegan cc." view in equity markets than an outright long. IS Mown Smashes Ss • Credit — The HG CDS-Bond basis has turned positive for the fast time in 14 Nikolaos Panigirteogl0u months. (44-2011134-7IP5 ^eels°, PaNiftec90-4bv.:49-wi inn • Currencies — We list cutlery implications of different US election outcomes. ■ Wawa Seaents qc • Commodities — Port closures and power cuts are delaying the reopening of Seamus Mac Goren refineries on the US East Coast. but this should prove short lived. (44.20) 71347701 noc9waffiaggragan room • Stocks continue the weekly up-and-down moves they started early Sep. This ▪ Flotwe, Soc~f tic week was an up-week for them. while other assets were largely unchanged Matthew Lehmann Markets (<1313313 in a holding pattern as everyone awaits information on where µ4:0)713415U economies are headed and anut decisions fiscal policy makers will make. We retain the view that this new information and decisions will prove positive for ▪ S•cceows cie equities and credit over the next few months. and mildly negative for bonds. but L•0 Evans can't be confident on whether this rally happens before or after the New Year. µ4S03 77C.2537 • This week's US data flow, punctuated by todays payrolls report. were a bit **via avanstornawn OCA, better than hoped moving ow tracking exercise for Q3 to 2.4%, versus the 2% ▪ mason season Oa flat government estimate released last week. These provide us a good trajectory YTD returns Through Nov 1 into the current quarter. but no more than is needed to realize our 2% forecast %, equities stern hirer Coke for Q4. At a world level. our Oct. Global manufacturing PM! advanced for a second straight month by 0.4 points. but remains just below 50. As such it is in BRIG hoe with our ?`e global growth forecast for Q4. Importantly. we again saw a rise SdP503 in the order index and a fall m inventory index. All this supports our view that a SCont gentle rebound in growth is coming but does not yet create an upside bias. US HO ree • Most of us have been following the Hurricane Sandy drama closely this week. =mete& and soot of us only too closely. New York and neighboring states are still MSICI arCte trying to dig out from under the damage. Estimates of ultimate costs keep edging MSCIEU up. The near-tenor impact will likely be to depress activity for Oct. and early US KOSS. November. but rebuilding should then support growth in coming months. We Email Freed Inc' are thus not changing GDP forecasts. We expect the main near-term impact on Eind markets will be the difficulty in separating signal from Sandy induced noise in EM Ireellkors" US activity data (Here comes the story of the Humcane. Feroli et al. in GDW). FX • Market are now focused on the US elections. ignoring those in China. We Tete note that Betting firms give Obama a 2O°1 probability of retaining the Vane USReeelirtane House. and higher for the Democrat to retain control of the Senate. Status quo is thus seen as the moss Wetly scenario. even as the popular vote polls suggest Gkbal Goa Behr" this will a very close comet USead GSCI ,y„ See page 8 for analyst certification and important disclosures. so...a Pawn acomberg. See Woe bosun pi 21w dew. aen 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 EFTA01181942