EFTA01146944.pdf

From: US GIO <us.gio®jpmorgan.com> To: Undisclosed recipients:; Subject: WPM View 08.03.2012 Date: Fri, 03 Aug 2012 20:45:54 +0000 Attachments: WM_View_08.03.2012-pdf.zip Inline-Images: image003.png Global Asset Allocation J.P. Morgan 03 August 2012 The J.P. Morgan View Stay in mid-risk assets • Asset Allocation Investors flows and the aniraunent of low growth. super Global Asset Allocation easy money and no fiscal blowups yet continue to support the strategy of mid- Jan Logy, Ac risk assets. EM and corporate bonds and defensive stocks. (141218344874 janiorrisCoNnivAA corn - Economics — Weak PhIls and demand indicators an panting to a risk Attargan CAA,* Bra HA scenario of an extended bottom in growth and a delay in our expected lift in growth but not to an acceleration in the downshift in grout John Normand (44.10) 71.34116 - Fixed Income — weakening growth and scramble kir yield inmost duration Conn normiattomonon tan osthweights. JP knaAn 5006463,4 pie Nikolaos Panigirtzoglou Equities — An imdenveight in Cyclical vs. Defensives is not necessarily (44.20)71344115 inconsistent with a long equity directional stance. "'Lisa" PAlcoltarAertAplia corn • Credit — Carry is king in a weak growth cheap money. low-volatility world 1M/b• pie OW DI credit and US high-yield Seamus Mac Gorain (44-20) 7134n61 • Foreign exchange — We add two mean reversion tracks. short GBP/NOK and searnasseposonaparnonya ctn. ALTD2T/D. JP. Maya Seas, pie Matthew Lehmann • Commodities — We maintain our OW in energy vs. base metals and our long 0410) 7134411$ in gold. We also open a small OW in agriculture. mart esiehmarwCipenaepan AAA, P MottmA SArearon pe • Equities are again net up on the week. and fixed income overall is slightly up. both beating zero-relding cash and commodities. and continuing to play by Leo Evans the asset reflation nine we have been harking on for sane nine. Cash and 144-2017742.2637 Mined a Avansepennan can commodines remain at the bottom of the 'lTD return parade (chats on right). J.P. WAWA 5406000, pin. • Investor flows. and ow strategy continue to focus on what we call mid-risk YID returns through Jul 16 assets -- better-yielding corporate and DI bonds as well as defensive %, &woes wen ION. coke equities — which so m benveen aggressive asset classes, such as higher-beta cyclical and EM stocks on one sick. and safer cash and govennnent bonds. The EMBIG combination of low. below-wend economic growth. super-easy monetary policy, EMS Cap and a postponing of fiscal blowups in the US and Europe remains positive for SW500 the mid-risk strategy. in our view US NO Y'S • On the growth side, this week's Global Manubctusing Phil was even weaker US MOGI* than feared. and is in recession levels. To offset the dangerous signal of this MSC] AC Wake production indicator, we need to get better news from services. demand, and EM Uri &Ms" jobs. Much of what we have received recently is quite mixed. lime retail sales Europe Feed Vic' I were poor and G3 shipments likely fell. But July car sales and US Jobs data were MSC' Eva* j OK. but not great. The July Global All-Industry PML which includes services. US Feed irtore did move up 1.4%, but still only to a level consistent with no change in growth Matt ESP i from Q2. As a result. we believe the risk is that global growth will not rise much Gael Got &Mr from the estimated 1.7% pace in Q2, which is so far the lowest in the expansion EM FX But there is little m the data that suggests a flirter lurching down in growth. We view a more extended bottoming in growth and later modest rebound as the Gold more likely scenario (more details in GDW). Us cash I Tome • GSCI TR 4 0 6 I: See page 7 for analyst certification and important disclosures. swat JP. *apt Bonn SA," baton pet b oinanyt wvew.morganmarkins.com EFTA01146944 This email is confidential and subset to impon= disclaimers and conditions including on offers for the purshase er sak of securities. accuracy and completeness of information. viruses. confidentiality. legal privilege, and legal entity di.clauners. available at http:»U"vutrpmorgan.corningeidisclosures,'email. EFTA01146945