DS9 Document EFTA01181149

From: To: Subject: Date: Attachments: Inline-Images: US olo caMila Undisclosed recipients:; JPM View 09.07.2012 Fri, 07 Sep 2012 22:16:59 +0000 JPM_View_09.07.2012-pdf.zip image003.png J. P. Morgan The J.P. Morgan View Can the risk rally last? Asset allocation — Following our re-entry into long US equities vs cash last steels we have further upgraded our risk exposure by being long both equines and credit versus cash and government debt Gwen the overnight annomicement of Climes. uthastrucntre sperrnot even if not all new. we cover our undenvright in Chinese equines and in industrial metals and reverse the short in commodity FX 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 China with both monetary sad fiscal policy. Fixed Income — Positron on ECB policy though Spanish cunt flattenen, and Fed QE3 through long end Treasury steepeners. Equities — We take profit ea our BRIO underweigJat within EM Credit — We go further up in yield and down in quality mar credit portfolio. Currencies — Close defensive trades sad go long commodity FX vs Europe. 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 task ECB President Mario Draghrs pronnse yesterday to provide a backstop to EMU members with finding problems, by using Outright Monetary 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 on this parade. And all this without him actually spending any money as no 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 highs do force us to ask whether the good times for risk assets can last. L We think the positive environment for risk aswts can and will last over the next 3-6 months. And this is rot because of a strong economy. AS we foresee below potential global growth over the next year and are below consensus 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 looks to have expanded at a tepid 19% pace m 2Q12. 13%-print below what world simply be trend On the back of weak gams nl COnStilikT and buianess spending at mid-year. global IP growth has come to a stand-still. And while things appear to have bottomed with some signals of =pavement in consumer spending in July. the soft wake-key of both spending and production through June is expected to hold global GDP growth to another tepid quarter of just re. See page 7 for analyst certification and important disclosures. Global Asset Allocation 07 September 2012 Global Asset Allocation Jan Lays kC (1.2joe c21 4mixsix, 634-5871 jan JP axor Chataiara imm John Normand Jv Yaw 5. et wite, ›.< Nikolao5 Panigrruoglou J P Mawr :.etuntes ale Seamus Mac Gorain Jo meow Sooners Pe Matthew Lohman stew morns pit Leo Evans J.P. secontes YTO returns through Sep 6 • nuns are in baker color. S&P500 ELISIO EMS Cap 1.03CI EteopV MSCIAC Wort usuovood oad usS.110a Save Fried MC MSCIEW EM kcal Bair' EM FX OSCI TR US Food Incoom Cibhg Goy Baler incase. Ter 4 I uf it SI 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