EFTA01149274.pdf

J.P Morgan Global Asset Allocation J.P.AAorgan Chase Bank NA, J.P. Morgan Securities Ltd. Sep 9, 2011 he J.P. Morgan View The endgame on EMU is approaching Jan Loeys' • Economics — Lower Japan growth drives global growth projections down to 2.5% for this year and next. EMU endgame is approaching as conditions are now so bad that core Europe is making proposals to tighten fiscal integration. John Normand • Portfolio strategy — Stay defensive and underweight equities. • Fixed Income — We go long duration in the Euro area, on peripheral turmoil and a more dovish ECB. Nikolaos Panigirtzoglou • Equities — Mixed economic data and continued negative EMU headlines warrant a defensive stance. Seamus Mac Gorain • Credit — We remain defensive and UW European vs. US credit. We move from underweight to marketweight in select Euro area senior bank debt. • Foreign exchange — Focus EUR shorts on JPY. Matthew Lehmann • Commodities — In an environment of falling demand, we expect OPEC to cut production to maintain prices close to current levels. • Riskier asset classes — equities, commodities and credit — are weaker again this week. Bonds are up on the week, in particular in Europe on a worsening of North South tensions in the Euro area, and speculation of monetary easing. YTD returns through Sep 8 %. equities are in lights, color. • We are tactically defensive, underweighting riskier assets on negative momen- Gold =IMF= tum in prices and economic growth expectations, and a lack of convincing policy options in the major economies. But any strategy must always be on EMBIG • • 1 the lookout for signs that conditions are reversing. As discussed here before, conditions for reversal must be based on better data, policies, value and positions: Economic data need to stop surprising on the downside; policies need to be put in place to reverse economic downside; the worst should be in US High Grade US Reid Vcome EM Local Bonds— Global Gov Bonds— ❑ the price: and investors should be short risky assets. These conditions are not yet in place — hence our defensiveness — but we need to keep monitoring EM Corp. ❑ than. US High Yield ❑ GSCI TR ❑ • First, global activity data remain weaker than most are hoping to see, but their EN FX 0 second derivative, the pace of weakening, is itself coming down. For most countries, data are in line with out much lowered projections. The exception is Europe Fixed Income' Japan, where we were forced to cut both H2 and next year. Much attention is US cash on how the collapse in confidence and equities in August are affecting S&P500 ❑ demand. The good news is that while demand has weakened, it is not breaking • in a manner one would expect if global recession had started. Chinese and US MSCA AC World' I MSCI EV' sales are holding up, but the tech sector is weakening seriously, as evidenced by Taiwan exports and Japanese foreign orders. MSCI Europe. Topa' • Second, the sudden rise in recession risks are pulling policy makers into 0 20 95 action. The question is: What can they do? EM policy makers have plenty of yoga. Ellocelmg. Rekrns n USD. local Sante: ammunition left, but inflation is not coming down fast enough yet to induce tummy. - 11c4;ed inio USD. Eum Red Income is tea Ongal broadbased easing. In most cases, EM central banks have stopped tightening. bre. US HG. HY. EMENG ad EM $ Cap en At ii at EM ELLIamS. We retain selective longs at the short end of their bond curves. The certifying analyst is indicated by an AC. See page 7 for analyst certification and important legal and regulatory disclosures. EFTA01149274 Global Asset Allocation The J.P. Morgan View J.P,Morgan • The US economy is teetering on the edge of recession. This will likely push 2012 JPMorgan global GDP growth forecast vs. the Fed into an Operation Twist to raise the duration of its SOMA portfolio Global equities later this month. We are not optimistic on its impact, gauging it at only 1Obp 3.8 IASC1 AC World 360 (see Terry Belton et al, Demystifying Operation Twist, Sep 9). President Obama —PP proposed yesterday a larger than expected plan to lower taxes and raise 3.6 350 spending. If fully implemented, it would add 2% to 2012 US growth, offsetting 3.4 340 and postponing the 1.75% negative fiscal drag currently in our forecast. Given 330 32 the polarization in Congress, it is highly unlikely that all of his proposals will become law, although some elements will likely pass. Our current US growth 3.0 2012 JPM global GDP 320 growth forecast forecasts, which are at the bottom of the consensus, have as a base case that 2.8 310 none of the proposals are adopted, and will be adjusted once we know more. 4-- 2.6 300 2.4 • In Europe, the endgame on EMU is approaching fast. As discussed before, the Jan4 1 Mar-11 Matl survival of the common currency requires a common fiscal policy. Member Scume. JP. Min:A Gramm Ecceorria Consensus Eccearim states have been fighting this dramatic loss of fiscal sovereignty, and will fecemsls ae let regims and =Muss Pal .e ?seemed usng the surrender only if the alternative of a much more damaging EMU breakup is same Siam ming USD GDP %yips thane Lae lx COI 0•11 Octal groat!, bean. imminent. We have argued that conditions need to become a lot worse before EMU countries move to the needed joint management of funding and deficits. 2011 global GDP growth forecasts: JPMorgan and • And that is what we got this week. Conditions worsened badly (see below). Consensus Sarkozy and Merkel made clear weeks ago that a Eurobond is not feasible without more strict control of budgets than is possible today. On Monday, the 4.0 Dutch PM and Minister of Finance proposed installing a fiscal Czar with the 3.8 power to make countries exit EMU if they do break its budget rules. And 3.6 yesterday, German Chancellor Merkel proposed in parliament a new EU Treaty 3.4 to permit a common economic policy, deeper integration and more dependabil- 32 ity. The pieces for the salvage ofEMU are starting to fall into place, but a lot 3.0 of progress needs to be made, with huge execution risks. 2.8 Fixed income 2.6 • The turmoil in the Euro area continues to escalate, pushing core European 2.4 bonds higher, with German Bunds again hitting new yield lows. The triggers Jan-10 May-10 Sep-10 Jan-11 May-11 Seel' this week: prevarication by Italy and Greece, before each delivered substantial Scums ktfg:n Gramm Eccentrics Consensus Eccearim austerity proposals, uncertainty over the degree of private sector support for twecasts se ler regims and =Muss Pal .e weraged tang the same Si.. ming USD GDP %yip's Nose use lx COI eon Octal the Greek debt exchange, and the resignation today of the ECB Governing growth brat Council's German ChiefEconomist, Juergen Stark. • We remain defensive on the periphery. Today's resignation will renew ques- tions over divisions within the ECB on its bond buying program. Spain and Italy come to the market next week with issuance. And further ahead, the More details in ... EFSF's €44Obn total capacity will be sorely tested to match the ECB's pace of Global Data Watch, Bruce Kasman and David Hensley bond purchases (€56bn in the first four weeks). Spain is our preferred UW. Global Markets Outlook and Strategy. Jan boys. Bruce • The ECB changed tack by more than expected this week in response to the Kasman. el al. economic slowdown, declaring that inflation risks are now balanced (instead US Fixed Income Markets. Terry Belton and Srini of to the upside). The likelihood of a near-term ease has increased substan- Ramaswamy tially. That, and the peripheral turbulence, prompt us to go long duration in the Global Fixed Income Markets, Pavan Wadhwa and Fabio Euro area, even at these very low yields. Bassi Emerging Markets Outlook and Strategy. Joyce Chang • We stay long duration in EM, (favour Indonesia, Malaysia, Thailand and Key trades and risk: Emerging Market Equity Strategy. Poland), but arc flat elsewhere in DM, including US Treasuries. The Treasury Adrian Mowal et al. market remains focused on the additional stimulus expected from the FOMC meeting in two weeks. We estimate though that a moderate-sized active Flows and Liguickiy. Nikos Paniginzoglou el al. Sep 8, 2011 2 EFTA01149275 Global Asset Allocation J.P,Morgan The J.P. Morgan View Operation Twist program would reduce 10yr yields by only 10bp. See Terry US EASI Belton et al., Demystifying Operation Twist, Sep 9. US Economic Activity Surprise Index 40 Equities 30 • Mixed economic data and continued negative headlines fromEurope's cover- 20 eign crisis warrants a defensive stance. Our US Economic Activity Surprise 10 Index remains in negative territory, as it has been for five straight months 0 (chart). We need to see this index moving to positive territory, and US data to .10 start surprising on the upside, for equities to sustain a recovery. .20 • Rule-based tradingstrategies tend to perform better in highly uncertain 30 environments. These strategies point to the following recommendations: .40 Jan4)9 Jul.09 Jan-10 Jula Jan.11 Jull 1. A US equity sector trading model based on a combination of sector short saute: ■ Maw interest, a contrarian indicator, and 11-month return momentum, suggests being long in US Energy and Materials vs. Financials and Staples (Flows & US HG spreads during recessions JP Morgan JULI index spread over USTs (Barclays Liquidity, Apr 15). US Aggregate is used before 0112000). BP 2. Our Cyclical vs. Defensive global sector trading signal based on the 600 monthly change in the global PMI currently recommends an UW in Cyclicals 500 (Trading Cyclical vs Defensive sectors, Aug 2009). The global PMI has been declining for six straight months weighing on Cyclical sectors. 400 300 3. Our EM vs. DM equity signals based on relative IP growth and 2-month 200 return momentum is currently neutral in EM (The EM vs DevelopedMarkets equity allocation, Apr 2009). Relative IP growth favours EM but 2-month 100 return momentum favours DM. 0 73 79 85 92 98 04 11 4. Our model for allocating between the US and Euro area equities currently Seen:. Mogan. Cwastnam suggests a long in S&P500 vs. MSCI EMU currency hedged (Panigirtzoglou et al., Trading the US vs Europe, June 24). Of the three signals, the perform- COX IG vs. iTraxx Main ance of global equities over the past 3 months and the change in the US-Euro Monthly spread levels since Jan 2007. PMI difference point to an UW of Euro area equities. They dominate the third Bp signal, the change in the EURUSD over the past three months, which favours 250 Euro area equities. 200 Credit 150 • Once again spreads were wider across the board this week. Europe continues 100 to underperform the US and the gap between the CDX.IG and iTraxx Main, historically 10bp, reached an all-time wide of 58bp on Tuesday, or 36bp after 50 adjusting for banking sector composition differences. As the Euro area will likely remain under stress near term, we buy protection in the iTraxx main vs. 0 Scow Boonbag • However, our European strategists upgraded their recommendation on European bank senior debt to neutral this week. Whilst increasingly priced into spreads, they believe that issuance risks have been dampened by More details in . funding diversification via covered bonds, ECB support and balance sheet deleveraging (see Roberto Henriques et al, Reassessing Senior Unsecured EM Corporate Outlook and Strategy, Warren Mar et al. Risk, Sep 8). They hold a preference for Irish and Portuguese senior debt US Credit Markets Outlook and Strategy. Eric Beinstein el al. High Yield Credit Markets Weekly. Peter Acciavalli et al. • Our recent Credit Investor Survey shows little consensus as to where US HG spreads are headed; 33% expect tightening and 39% expect widening. Asset European Credit Outlook & Strategy, Steven Dulake et al. managers are bearish and hedge funds are bullish (see Eric Beinstein et al., Sep 9, 2011 3 EFTA01149276 Global Asset Allocation J.P. Morgan The J.P. Morgan View Credit Market Outlook & Strategy, Sep 9). However, their cash positions are FX weekly change vs USD building and they are trading up in credit quality. We tactically remain UW US 4% HG bonds although attractive valuations and growing cash positions may facilitate a rally medium-term. 0% ■ • EMBIG spreads widened Ilbp to 380bp and CEMBI spreads widened 6bp to 425bp. We maintain that EM will outperform DM given strong economic .4% fundamentals and policy room-to-manoeuvre. However, in keeping with our more bearish stance on credit and because EM is behaving akin to a high-beta •8% sector, we overweight EM sovereigns vs. EM corporates. Foreign Exchange •12% • The dollar is re-recoupling with stock markets and volatility, and thus threaten- USD CUR GBP JPY CHF CAD AUD ing to break the five-month ranges which DXY and trade-weighted indices TWI have observed. HIA 2.0 remains a wildcard which could drive the dollar Sauce: J.P. ucepi broadly higher, but this risk looks exaggerated. EUR/USD is clearly at risk from an ECB ease, conflict over the SMP following Stark's resignation and the usual sovereign stresses. But Obama's fiscal ease and possible QE 3 are important offsets. Outside EUR/USD, ranges on other currencies look intact. • SNB stole the spotlight by setting a floor for EUR/CHF which could affect other major currencies through the re-channelling of fiscal hedging. But why this might partly explain the accelerated break-down in EUR/USD, it doesn't make safe-havens of inherently cyclical currencies such as SEK, NOK, AUD and NZD. Moreover, the SNB's actions are not a playbook for the Bo). The SNB's actions stopped out our long CHF trades vs EUR, GBP and USD. We are cautiously monetising the SNB's floor for EUR/CHF by selling short-dated puts struck at the 1.20 floor, albeit recognising the long-term constraints and pressures on this peg. The portfolio remains defensively positioned in funding currencies, albeit exclusively now through yen. Hedge the risk of a further loss of confidence in the euro through EURZIPY rather than EUR/USD, while hold existing yen longs versus both USD and GBP. Commodities • As we pointed out last week, the oil market has proved resilient during the past month's turmoil in risky markets. Brent is up another 13% this week and is now almost back to where it was before the correction at the beginning of August. We expect prices to range trade around current levels right through to the middle of next year, though with considerable volatility. The resumption of Libyan production is unlikely in any material size until next year when we may also see an expansion of Iraqi exports. However, in a scenario of increased supply that is not met by adequate demand,our view is that OPEC will cut production in order to maintain prices above $100/bbl and protect their revenues. Our oil analysts report that early estimates of Middle East More details in ... exports for August already show a decline of as much as 6% of the previous month's exports, perhaps reflecting the current economic slowdown. FX Markets Weekly. John Normand et al. Commodity Markets Outlook 8 Strategy. Cohn • This week's statement by the SNB that they will purchase "unlimited" Fenton el al. quantities of foreign currency to maintain a floor for the EUR/CHF of 1.2 is a OA Markets Monthly. Lawrence Eagles et al. new bullish factor for gold. It has removed the CHF from the list of liquid hedges for the Euro area crisis. In addition, although the SNB is unlikely to Metals Review and Outlook Michael Jansen use the cash it gets from selling CHF to buy gold, this may accentuate the Global Metals Ouarterry. Michael Jansen recent trend of EM central banks diversifying their reserves into gold, thus boosting prices further. Sep 2011 4 EFTA01149277 Global Asset Allocation J. P Morgan The J.P. Morgan View Interest rates Current Sep-11 Den.11 Man12 Jun.12 YTD Return' United States Fed funds rate 0.125 0.125 0.125 0.125 0.125 10.year pens 1.92 2.05 2.60 2.80 3.00 8.3% Ewe area Safi rate 1.50 1.50 1.50 1.50 1.50 10.year yields 1.77 2.10 2.05 2.00 2.00 72% United Kingdom Repo rate 0.50 0.50 0.50 0.50 0.50 10.year yields 226 2.45 2.55 2.55 2.55 9.1% Japan Overnight call rate 0.10 0.05 0.05 0.05 0.05 10.year yields 1.00 0.90 0.95 1.05 1.10 1.6% GBI.EM hedged in S Yield • Global Diversified 625 6.90 5.0% Credit Markets Current Index YTD Return' US high grade (bp over UST) 207 JPMorgan US Index (JULI) i.swead 72% Euro high grade (bp over Euro gov) 300 iElow Euro Corporate Max 33% USD hgh yield (bp vs. UST) 735 JPMorgan Global Hgh Yield Index 32% Ewe high yield 02p over Euro goy) 850 iBoxx Euro HY Index .34% EMBIG 'to vs. UST) 370 EMBI Global 8.1% EM Corporates (29 vs. UST) 414 JPM EM Corporates (CEMBI) 4.8% Quarterly Averages Commodities Current 1103 1104 1201 1202 GSCI Index YTD Return' Brent (aid) 115.6 110.0 115.0 115.0 110.0 Energy 0.8% Gold (Sbz) 1815 1650 1800 1800 1750 Precious Metals 31.3% Copper (Vmetric ton) 8913 9750 10000 10250 9500 Industrial Metals 45% Corn (Sltu) 7.54 7.20 6.90 7.10 7.40 Agnouthee 0.6% 3m cash YTD Return' Foreign Exchange Current Sep-11 Den.11 Mar.12 Jun.12 Index In USD EURUSD 1.41 1.45 1.45 1.48 1.48 EUR 53% USCUPY 77.3 76 75 74 73 JPY 5.1% GBPAJSD 1.60 1.63 1.59 1.66 1.68 GBP 3.4% USOBRL 1.66 1.58 1.6 1.6 1.65 BRL 5.3% USOCNY 6.40 6.35 6.3 6.2 6.10 CNY 22% USCIKRW 1072 1040 1070 1050 1020 KRW 7.1% USD/TRY 1.76 1.65 1.65 1.65 1.65 TRY .9.1% YTD Return 2011 US Europe Japan EM Equities Current (local coy) Forecast Sector Allocation' YTD YTD YTD YTD (S) S&P 1193 .5.5% 1475 Energy 4.2% 432% .10.1% 43.2% Nasdaq 2537 -5.9% Materials -10.4% .232% .18.2% -13.6% Topix 754 .16.9% Industrials •113% .22.5% •132% .20.6% FTSE 100 5319 -10.6% 5900 Discretionary 4.2% -17.7% -21.9% -1.1% MSCI Eurozone' 121 •243% 145 Staples 4.7% 4.0% 4.6% 13% MSCI Europe' 944 -19.7% 1100 Healthcare 4.4% .1.6% 4.1% -13.4% MSCI EM V 988 •14.5% 1300 Financials -222% •27.8% .25.7% 15.6% Brazil Bovespa 56607 -19.8% Information Tech. .6.4% -14.7% -28.0% •19.6% Hang Song 20048 .11.8% Telecommunications 4.3% 4.7% 4.4% 1A% Shanghai SE 2516 -11.4% UWities 8.0% -18.6% -40.0% -10.7% levelerelums as of Sep 08.2011 Overall .5.5% 49.7% 46.9% .143% Local oirrency except MSCI EM S Swot Bkorrbag Ceastearrt eEs Sbretvd a Pech JP Mogen eetroles Sep 9, 2011 5 EFTA01149278  Global Asset Allocation The J.P. Morgan View J. P Morgan Global Economic Outlook Summary Real GDP Real GDP Consumer prices %Mr a year ago sonar pre404 good saw %eir a yea, ago 2010 2011 2012 1011 2011 3011 4011 1012 2012 3012 4010 2011 4011 2012 The Americas United States 3.0 1.4 12 0.4 1.0 1.0 1.0 OS 1.5 2.5 1.2 33 32 1.3 Canada 3.2 2.2 22 3.6 -0.4 1.8 2.4 2.6 2.6 2.4 2.3 3.4 2.6 1.6 Latin America 6.0 4.3 3.5 5.8 15 3.4 3.1 2.6 4.3 4.4 6.7 6.8 72 7.3 kgentid 9.2 7.0 4.8 11.7 5.0 6.0 3.0 4.0 6.0 4.0 11.0 11.0 11.0 13.0 Brazi 7.5 3.4 3.8 5.0 3.1 2,3 3.9 43 4.1 3.5 5.6 6.6 6.5 5.7 Chile 5.2 6.5 43 6.4 5.7 3 2.5 5.0 4.5 4.3 2.5 3.3 4.0 3.6 Colombia 4.3 5.3 4.0 7.7 6.0 3.5 1.5 42 4.7 5.2 2.7 3.0 3S 3.1 Ecuador 3.6 6.0 3.0 7.3 3./ 2.0 1.0 2.0 3.5 4.0 3.4 4.1 3.9 3.6 Mexico 5.4 4.0 2S 2.4 4.5 52 2.6 -15 3.7 4.9 4.2 33 34 3.6 Peru 8.8 6.3 5.0 6.9 4.5 2.5 3.0 7.0 5.3 5.3 2.1 3.1 3.6 3.0 Venezuela -1.5 3.5 3.0 14.7 -3.2 11,5 3.0 3.0 5.0 6.5 27.3 24.6 29.0 33.6 AslaPacifIc Japan 4.0 -0.31 2,5 1 -3.71 4.1 1 7.0 351 2.01 1.71 15 1 -0.3 -0.4 -02 -0.7 Australia 2.7 1.4 T 3.5 1 -3.4 T 4.81 12 1 221 4.1 3.4 T 4.8 2.7 3.6 3.8 3.2 New Zealand 1.7 2.8 42 3.4 4.2 4.5 3.7 3S 4.3 5.5 4.0 53 32 2.4 Asia ex Japan 9.1 7.2 7.0 8.9 5.3 6.1 1 6.8 72 7.5 7.6 4.9 5.7 4.9 4.5 China 10.3 8.9 8S 8.9 7.0 15 8.5 8.7 8.9 9.0 4.7 5.7 4.6 4.3 Hong Kong 7.0 5.2 4.0 13.0 -2.0 1.5 35 5.5 5.6 4.5 2.7 52 5.1 4.3 India 8.5 7.6 8S 8.3 7.6 7.5 7.1 8.6 9.0 9.5 9.2 9.1 8.7 7.8 Indonesia 6.1 6.4 62 6.8 5.4 EL 62 62 6.2 6.2 6.3 5.9 4.5 5.6 Korea 6.2 4.0 42 5.4 3.6 T gI 4.0 4.0 4.5 4.5 3.6 42 3.7 t 3.1 Malaysia 7.2 4.2 3.6 5.5 3.2 1.0 3S 4.0 4.1 4.0 2.0 3.3 2.8 2.4 Philippines 7.6 4.6 1 5.2 1 7.8 2.4 Q,41 511 4.9 4.9 5.3 3.5 5.0 4.6 3.3 Singapore 14.5 5.1 1 3.81 27.2 -6.5 OM 1 3.2 1 4.5 6.1 7.0 4.0 4.7 4.6 T 3.01 Taiwan 10.9 5.0 3.8 14.6 0.9 j5 3.8 42 4.7 4.8 1.1 1.6 22 2.0 Thailand 7.8 3.1 3.6 8.1 -0.8 2.0 45 4.5 4.0 4.0 2.9 4.1 3.7 3.6 AfrIcaMiddle East Israel 4.8 4.3 2.9 4.7 3.3 2.4 12 0.8 3.2 6.1 2.5 4.1 2.8 2.3 South Africa 2.8 3.3 2.7 4.5 1.3 3.3 2.9 2.3 2.6 2.9 3.5 4.6 5.8 5.1 Europe Euro area 1.7 1.6 0.9 3.11 0.61 0.0 0.5 1.0 1.0 1.5 2.0 2.8 2.5 1.4 Germany 3.6 28 1.3 5.5 0.5 0.5 1.0 1.5 1.5 2.0 1.6 2.5 22 1.2 France 1.4 1.6 13 3.6 0.0 15 1.0 IS 15 2.0 1.9 22 2.1 13 Italy 1.2 0.6 0.6 0.51 1.2 t -0.5 0.0 0.5 1.0 1.5 2.0 2.9 2.8 1.8 Norway 2.1 2.3 1.8 1.9 4.1 2,0 1.0 15 2.0 2.0 2.2 1.4 14 1.4 Sweden 5.4 4.4 1.6 3.2 3.9 A 1.0 IS 1.5 2.0 1.9 2.9 2.71 1.61 United Kingdom 1.4 1.0 1.4 1.9 0.7 t5 1.0 1.0 OS 4.0 3.4 4.4 4.7 2.8 Emerging Europe 4.5 3.6 3.0 3.6 1.2 1 LA 22 4.0 3.8 3.8 6.6 7.1 6.0 5.2 Bulgaria 0.2 as 2.7 Czech Republic 2.3 2.0 1.6 3.51 031 0.3 0.8 1.3 1.8 2.0 2.1 1.8 2.1 2.8 Hungary 1.2 1.5 13 1.2 -021 La 1.0 1.0 1.5 1.8 4.4 4.0 3.8 3.1 Poland 3.8 3.8 3.0 4.5 4.5 2.0 25 2.8 2.8 3.0 2.9 4.6 4.0 2.5 Romania -13 12 1.0 7.9 82 4.0 3.5 Russia 4.0 3.4 3.5 3.7 0.4 1.1 2.0 5.0 4.7 4.5 8.2 9.6 7.4 6.5 Turkey 8.9 5.6 33 7.4 5.9 6.8 6.1 Global 3.9 2.51 2.5 1 2.61 1.5 1 2.4 221 221 2.61 3.21 2.7 3.7 3.4 2.4 Developed markets 2.6 1.3 1 1.4 1 0.91 Q.61 1.6 121 1.1 1 1.41 2.2 1.5 21 2.6 13 Emergiig markets 7.3 5.7 53 7.2 4.1 4.6 5.0 5.4 5.9 6.1 5.6 62 53 I 5.3 Space JP. /.1:rgan Sep 9.2011 6 EFTA01149279 Global Asset Allocation The J.P. Morgan View J.P.Morgan Analyst Certification: The research analyst(s) denoted by an "AC" on the cover of this report certifies (or. where multiple research analysts are primarily responsible for this report. the research analyst denoted by an "AC" on the cover or within the document individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (I) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers: and (2) no part of any of the research analyst's compensation was, is. or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report. Disclosures: J.P. Morgan ("JPM") is the global brand name for J.P. Morgan Securities LLC ("JPMS") and its affiliates worldwide. J.P. 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