EFTA01181709.pdf

From: US CIO < To: Undisclosed recipients:; Subject: JPM View 10.05.2012 Date: Fri. 05 Oct 2012 20:56:32 +0000 Attachments: JPM_View_10.05.2012-pdfzip Inline-Images: image003.png Morgan Global Asset Allocation OS October 2012 The . Morgan View What do you buy your children? • Asset allocation — A long-term portfolio. for you or your children. should Global Asset Allocation concentrate on value This means large holdings of equines. especially value Jan Loeys AC stocks. small caps and ESf combined with BBBBB rated debt of corporates ti 8144874 and sovereigns, plus smaller holdings of gold. crude, and undervalued >ss bcrICIPInorp as 4,4 Cuisencies :alkatgan Vv.* Bar* NA • Economics — Rise in Global FMK. and in particular order-to-inventory ranos. John Normand :,420i71)4 -IS IC are the first mural that growth rebound is coming. even as QI4 will likely remain well below potential ■ ekteaan S'Ic k • Fixed Income — Hold spread compression trades and longs in UK SitkOlaOS PanigirttOglOu breakevens [44.2f),7t34:79I, wrap .-tke`hCIT440.4a COm • Equities — Re-enter overweight in Cyclical sectors ■ 4.4atean SecInts • ('edit — Shot-dated corporates around the investnient. grade boundary offer Seamus Mac Gomm the most attractive cam'-to-nsk. particularly European BBs 444-20) 7134-7741 $.»14sIN494.4lZwenorgas corn • Curt mutes — Keep limited short USD positions uoiao soconsoi Gk Matthew Lehmann • Commodities — We are long gold and base metals and short agriculture 14440) 7134700 • C tight and equity markets continue to rally. with only minimal damage to ▪ 444%44 Securts•• pie bond markets. The rise in Global Mils. both manufacturing and services. combined with better US yobs data. are giving greater confidence that world Leo Evans 144-10) 7,42-2537 growth has bottomed and is set to rebound into Q4 Even with a rebound this Isonaccl 4 trans Mg:crows 4,4 quarter. the world economy is set to expand at a well below-par growth pace ■ Mor444 Secs44cs plc through the middle of next year This should keep corporate eanungs with little or no growth tuts quarter As such, we do nor expect much support for risk Y If/ rt't mi. iri a I 4 markets from economic a earnings releases over coning months. aside from Ito equities ate a Ighter ectot reducing downside risk perceptions Snake I • Our investment strategy remains instead based on medium-term value. winch EMSIG means to us still lug.h nsk Fenna at equities and credit. in the presence of EM CoM falhng market volatility and steadily improving fembnity with if not fading MX! AC owe I concerns about. the world - s main event risks Want, about the US fiscal cliff Gold have not cone away and the Middle East remains on edge But the coming US Rah Yeld leadership change in China is raising hopes of new stimulus measures. while the ECB planned ONfTs have bought cur° sovereigns some breathing space tiSCrEeore I MSCIEIA I • We thus remain comfortable long equities and credit versus government debt US Hqh Grade and cash. focusing on the lugher-yielduig credit sectors Globally. we continue Eumpe Fixed Inc' t to like cam' strategies in Fl and fixed income. This week's GMOS has our full EU FX set of reCOmmendanans The criticism is raised frequently that massive hqiuchry EM Lea gomr injections are Creating new asset prices Bubbles are historically characterized US Foed Imam i by easy money. leverage and hugely overvalued markets. Money is surely super easy. but mum: and risk prenua are above historic means and surely above GlobalGov Bask" where they were at this point in past business cycles In addition. Mere is little CSCini i evidence of financial leverage. except fee central banks but these have no Too• problems with liquidity USsaih 4 S I: IS CI See page 7 for analyst certification and important disclosures. SOUKS MOWN,. Bloomberg. So Nue to. en EFTA01181709 This email is confidential and subject b important disclaime'% and condinoota otThm for the 'chase or sale of securities. accuracy and completeness of infonnation. virus s. confidentiality. legal privilege. and legal entity disclaimers. available at EFTA01181710