EFTA01181149.pdf

From: US olo caMila To: Undisclosed recipients:; Subject: JPM View 09.07.2012 Date: Fri, 07 Sep 2012 22:16:59 +0000 Attachments: JPM_View_09.07.2012-pdf.zip Inline-Images: image003.png J.P. Morgan Global Asset Allocation 07 September 2012 The J.P. Morgan View Can the risk rally last? Asset allocation — Following our re-entry into long US equities vs cash last Global Asset Allocation steels we have further upgraded our risk exposure by being long both equines Jan Lays kC and credit versus cash and government debt Gwen the overnight annomicement (1.2joe c21 634-5871 of Climes. uthastrucntre sperrnot even if not all new. we cover our jan 4mixsix, undenvright in Chinese equines and in industrial metals and reverse the short in JP axor Chataiara commodity FX John Normand Economics — Wald youth is in a honor:wig prccess, but at well below potential with a rem to tread only projected by the middle of next year. Pokey easing is restarting in the US, LX. Euro area with monetuy policy. and in imm Jv Yaw 5. et wite, ›.< China with both monetary sad fiscal policy. Nikolao5 Panigrruoglou Fixed Income — Positron on ECB policy though Spanish cunt flattenen, and Fed QE3 through long end Treasury steepeners. J P Mawr :.etuntes ale Equities — We take profit ea our BRIO underweigJat within EM Seamus Mac Gorain Credit — We go further up in yield and down in quality mar credit portfolio. Jo meow Sooners Pe Currencies — Close defensive trades sad go long commodity FX vs Europe. Matthew Lohman Commodities — The newly announced Chinese snmulut makes us take profits on our OW energy vs base metals trade. We stay long energy on Middle East stew morns pit task Leo Evans ECB President Mario Draghrs pronnse yesterday to provide a backstop to EMU members with finding problems, by using Outright Monetary J.P. secontes Transactions (Mfrs) to keep risk prima low. induced a massive rally in periphery bonds and global equities. Even a weak US jobs report could not rain YTO returns through Sep 6 on this parade. And all this without him actually spending any money as no • nuns are in baker color. crimtry yet meets his conditions cleanly. Both US and German equity :Sees reached new cyck highs While consistent with our long.nsk strategy, these new S&P500 highs do force us to ask whether the good times for risk assets can last. ELISIO EMS Cap L We think the positive environment for risk aswts can and will last over the 1.03CI EteopV next 3-6 months. And this is rot because of a strong economy. AS we foresee MSCIAC Wort below potential global growth over the next year and are below consensus usuovood expectant:as °MAIL we continue to see data that signal that world growth is in a bottoming proems. With most countries haring now reported global GDP oad looks to have expanded at a tepid 19% pace m 2Q12. 13%-print below what usS.110a world simply be trend On the back of weak gams nl COnStilikT and buianess Save Fried MC spending at mid-year. global IP growth has come to a stand-still. And while MSCIEW things appear to have bottomed with some signals of =pavement in consumer EM kcal Bair' spending in July. the soft wake-key of both spending and production through EM FX June is expected to hold global GDP growth to another tepid quarter of just re. OSCI TR US Food Incoom Cibhg Goy Baler incase. Ter 4 I uf it SI See page 7 for analyst certification and important disclosures. SatceJP Lbw Son seats bum pip 24 awes% vevivitmorgarimarkets.com This email is confidential and subject to imporunt &claimer% and conditions including mowers for the purchase or ink of securities. aocuntcy and completeness of information. viruses, ccolidentiality. legal privilege, and legal entity disclaimers. available M Attprriwnw.jpnorgancorarpageildisclosuresremail. EFTA01181149