DS9 Document EFTA01181709

From: To: Subject: Date: Attachments: Inline-Images: US CIO < Undisclosed recipients:; JPM View 10.05.2012 Fri. 05 Oct 2012 20:56:32 +0000 JPM_View_10.05.2012-pdfzip image003.png Morgan The . Morgan View What do you buy your children? • Asset allocation — A long-term portfolio. for you or your children. should concentrate on value This means large holdings of equines. especially value stocks. small caps and ESf combined with BBBBB rated debt of corporates and sovereigns, plus smaller holdings of gold. crude, and undervalued Cuisencies • Economics — Rise in Global FMK. and in particular order-to-inventory ranos. are the first mural that growth rebound is coming. even as QI4 will likely remain well below potential • Fixed Income — Hold spread compression trades and longs in UK breakevens • Equities — Re-enter overweight in Cyclical sectors • ('edit — Shot-dated corporates around the investnient. grade boundary offer the most attractive cam'-to-nsk. particularly European BBs • Curt mutes — Keep limited short USD positions • Commodities — We are long gold and base metals and short agriculture • C tight and equity markets continue to rally. with only minimal damage to bond markets. The rise in Global Mils. both manufacturing and services. combined with better US yobs data. are giving greater confidence that world growth has bottomed and is set to rebound into Q4 Even with a rebound this quarter. the world economy is set to expand at a well below-par growth pace 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 markets from economic a earnings releases over coning months. aside from reducing downside risk perceptions • Our investment strategy remains instead based on medium-term value. winch means to us still lug.h nsk Fenna at equities and credit. in the presence of falhng market volatility and steadily improving fembnity with if not fading concerns about. the world - s main event risks Want, about the US fiscal cliff have not cone away and the Middle East remains on edge But the coming leadership change in China is raising hopes of new stimulus measures. while the ECB planned ONfTs have bought cur° sovereigns some breathing space • We thus remain comfortable long equities and credit versus government debt and cash. focusing on the lugher-yielduig credit sectors Globally. we continue to like cam' strategies in Fl and fixed income. This week's GMOS has our full set of reCOmmendanans The criticism is raised frequently that massive hqiuchry injections are Creating new asset prices Bubbles are historically characterized 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 where they were at this point in past business cycles In addition. Mere is little evidence of financial leverage. except fee central banks but these have no problems with liquidity See page 7 for analyst certification and important disclosures. Global Asset Allocation OS October 2012 Global Asset Allocation Jan Loeys AC ti 8144874 >ss bcrICIPInorp as 4,4 :alkatgan Vv.* Bar* NA John Normand :,420i71)4 -IS IC ■ ekteaan S'Ic k SitkOlaOS PanigirttOglOu [44.2f),7t34:79I, wrap .-tke`hCIT440.4a COm ■ 4.4atean SecInts Seamus Mac Gomm 444-20) 7134-7741 $.»14sIN494.4lZwenorgas corn uoiao soconsoi Gk Matthew Lehmann 14440) 7134700 ▪ 444%44 Securts•• pie Leo Evans 144-10) 7,42-2537 Isonaccl 4 trans Mg:crows 4,4 ■ Mor444 Secs44cs plc Y If/ rt't mi. iri a I 4 Ito equities ate a Ighter ectot Snake I EMSIG EM CoM MX! AC owe I Gold US Rah Yeld tiSCrEeore I MSCIEIA I US Hqh Grade Eumpe Fixed Inc' t EU FX EM Lea gomr US Foed Imam i GlobalGov Bask" CSCini i Too• USsaih 4 S I: IS CI 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