From: US GIO <us.gio®jpmorgan.com>

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 J.P. Morgan The J.P. Morgan View Stay in mid-risk assets • Asset Allocation Investors flows and the aniraunent of low growth. super easy money and no fiscal blowups yet continue to support the strategy of mid- risk assets. EM and corporate bonds and defensive stocks. - Economics — Weak PhIls and demand indicators an panting to a risk 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 - Fixed Income — weakening growth and scramble kir yield inmost duration osthweights. Equities — An imdenveight in Cyclical vs. Defensives is not necessarily inconsistent with a long equity directional stance. • Credit — Carry is king in a weak growth cheap money. low-volatility world OW DI credit and US high-yield • Foreign exchange — We add two mean reversion tracks. short GBP/NOK and ALTD2T/D. • Commodities — We maintain our OW in energy vs. base metals and our long in gold. We also open a small OW in agriculture. • 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 the asset reflation nine we have been harking on for sane nine. Cash and commodines remain at the bottom of the 'lTD return parade (chats on right). • Investor flows. and ow strategy continue to focus on what we call mid-risk assets -- better-yielding corporate and DI bonds as well as defensive 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 combination of low. below-wend economic growth. super-easy monetary policy, and a postponing of fiscal blowups in the US and Europe remains positive for the mid-risk strategy. in our view • On the growth side, this week's Global Manubctusing Phil was even weaker than feared. and is in recession levels. To offset the dangerous signal of this production indicator, we need to get better news from services. demand, and jobs. Much of what we have received recently is quite mixed. lime retail sales were poor and G3 shipments likely fell. But July car sales and US Jobs data were OK. but not great. The July Global All-Industry PML which includes services. did move up 1.4%, but still only to a level consistent with no change in growth from Q2. As a result. we believe the risk is that global growth will not rise much from the estimated 1.7% pace in Q2, which is so far the lowest in the expansion 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 more likely scenario (more details in GDW). See page 7 for analyst certification and important disclosures. Global Asset Allocation 03 August 2012 Global Asset Allocation Jan Logy, Ac (141218344874 janiorrisCoNnivAA corn Attargan CAA,* Bra HA John Normand (44.10) 71.34116 Conn normiattomonon tan JP knaAn 5006463,4 pie Nikolaos Panigirtzoglou (44.20)71344115 "'Lisa" PAlcoltarAertAplia corn 1M/b• pie Seamus Mac Gorain (44-20) 7134n61 searnasseposonaparnonya ctn. JP. Maya Seas, pie Matthew Lehmann 0410) 7134411$ mart esiehmarwCipenaepan AAA, P MottmA SArearon pe Leo Evans 144-2017742.2637 Mined a Avansepennan can J.P. WAWA 5406000, pin. YID returns through Jul 16 %, &woes wen ION. coke EMBIG EMS Cap SW500 US NO Y'S US MOGI* MSC] AC Wake EM Uri &Ms" Europe Feed Vic' I MSC' Eva* j US Feed irtore Matt ESP i Gael Got &Mr EM FX Gold Us cash I Tome • GSCI TR 4 0 6 I: 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