J.1). Morgan

J.1). Morgan he J.P. Morgan View A beginning to the end of the euro crisis • Economics —We raise Q3 in the Euro area by 1%, but lower 2012 China by 0.2%. A Euro area recession remains our forecast. • Portfolio strategy — Stay long risky assets as activity data remain better than feared, and odds favor fiscal compromises in Europe and the US. • Fixed Income—We move to flat duration in EM, as in DM. • Equities — Open an overweight in EM vs. DM equities. • Credit — We stay optimistic as the economic and technical picture improves. Near-record HY bond fund inflows lead us to close our UW CCC vs US HY. • Foreign exchange — Stay long the yen. • Commodities — The physical copper market is showing signs that the global demand picture is improving. • Confusing rumors and counter-rumors on what the EU Summit would or would not deliver whipsawed markets all week, but leave credit and US equities net up. Most market participants refused to participate and are simply waiting for Europe to make up its mind. The normally high correlation between different risk markets in volatile periods was therefore not in evidence. • What can we expect from Europe next week? This weekend will likely produce decisions on the Greek haircut (close to 50%) and quite possibly on higher capital ratios to be achieved by EU banks by the middle of next year. The decision on how to improve funding of illiquid sovereigns by leveraging the EFSF seems to have been pushed to a second summit on Wednesday. Some commitments on moving towards joint decision making on fiscal policy are also quite possible. Details on our views in Barr and Mackie, The EU sununit(s): where is the bazooka?, in today's GDW The big question is whether these summits can finally end the Euro-sover- eign debt crisis that began in the aftermath of the 21X17.09 financial crisis. We think the odds are favorable that next week will define the start of the end of the sovereign debt crisis, but that this process will be drawn out, will have reversals, will not be obvious for some time, and will not prevent Europe from falling into recession again, as banks delever and austerity bites hard. • It has been our view that Europe needed to come right to the edge of disaster before it would be forced to make the painful decisions necessary to reverse the crisis. Europe has the resources to achieve this. It just needs to have the political will to do so. This requires that the alternative is right in your face, and that procrastination is no longer possible. It is our perception that these conditions are in place today. The rest of the world is screaming for a solution as it sees the Euro debt crisis as a super Lehman that can bring all down. It is quite possible the rest of the world is willing to help though the IMF. We are willing to interpret the strong disagreements still evident between France and Germany and the postponing of the summit end to next Wednesday as signs The certifying analyst is indicated by mac. See page 7 for analyst certification and important legal and regulatory disclosures. Global Asset Allocation J.P.Morgan Chase Bank NA, J.P. Morgan Securities Ltd. Oct 21, 2011 Jan LoeysAc (. 1=1 John Normand Nikolaos Panigirtzoglou Seamus Mac Gorain Matthew Lehmann YTD returns through Oct 20 %. equities are in tighter colour. Gold US High Grade US Fixed Income EMIG Global Gov Bonds" El EM Local Bonds" US High Yield K EM S Corp. Europe Fixed Income' US cash S&PSOD K EM FX K GSCI TR MSCI AC Woad' MSCI Europe' MSCI EM Topix .20 -I 0 10 20 San: JP. Mxgan. Obtain% Rekrra n USD. tad palmy. - 110:kpd ado USD. Etna Fond Inunne is lbw Omni Inde. US HG. Mi. EMMG ad EM S Cap art Jali Nos OA Fxe ELManS. EFTA01170207 Global Asset Allocation The J.P. Morgan View J.P. Morgan of the momentous decisions to be made rather than a breakdown in political will to come up with a solution. • How will markets react if the EU summits provide the goods? Global inves- tors have been hedging the EMU debt crisis by underweighting Europe, European banks, and global banks in both equity and credit markets. One should thus expect banks and European stocks broadly to react most to good news. Bonds will probably not move as much as duration positions are very light, with our US Treasury duration survey showing a 9.82.9 percentage exposure across shorts, neutrals and shorts. The euro should rally against the USD, but not that much as it never fell much. Expect stronger rallies in EM currencies. • We retain the bullish view and OW positions on risky assets — equities, credit, commodities, and EM currencies — that we initiated last week. The favorable odds on the EU summits is are a clear plus. So are signs that Wash- ington is edging towards compromise on the Obama tax plans. Economic data have been a plus, both on the global demand and supply side. Both are coming in stronger — or better, a lot less weak — than had been feared. Our forecast remains for a confidence and inventory-led fall in growth from 2.7% in Q3 to 1.7% in Q4. But there is now clear upside risk on Q4. This week, we raised last quarter growth in the Euro area from 0.5% to 1.5%, while keeping a forecast that the recession starts this quarter. We lowered China 2012 growth from 8.5% to 8.3%, still comfortably consistent with a soft landing. Fixed income • Bonds rallied back a little, as hopes of a Euro area agreement by this week- end unravelled. Together with the brighter tone in US activity data, this allowed German Bunds to outperform Treasuries slightly, and we think that move can continue. • This week brought more clarity on bank recaps — likely sub-€100bn, below many market expectations. But the details on how Euro area leaders will leverage their resources, and the exact haircuts to be applied to Greek debt, still appear up in the air. Intra-EMU spreads rose across the board, with France again lurching wider, partly on rumblings from the ratings agencies. Its high proportion of ratings-sensitive official sector investors underlines the importance for France of maintaining its AAA status. We remain defensive on infra-EMU spreads, but in smaller size, closing Spain underweights on the risk of increased ECB buying. • EM local bonds have this month retraced half the September sell-off. After four weeks of significant outflows, EM bond mutual fund flows were about flat this week. We take profit on underweights in EMEA, moving from overall short duration in EM local bonds to flat. Our new EM Cross Product Strategy Weekly (Eric Beinstein, Oct. 19) details our top trade recommendations, including receivers in South Africa, and inflation linkers in Brazil. • Please help us to gauge prospects for inflation by completing our Inflation Expectations Survey on: Equities • US equities continued to rally fora third straight week. A better than expected 2012JPMorgan global GDP growth forecast vs. Global equities 3.9 2,212 Pt' oleSnr GDP crovith forecast Jan-11 Mar•11 May.11 Jul.11 Septi Sturm: JP. Manprk Consensus Ecceorrict Commas Ecorarics tefecasIs ae kt mats and waft= Pal., avenged Lang the same Slav ming USD GOP %tights that., Lae lx COI Lan OW growth bat 2011 global GDP growth forecasts: JPMorgan and Consensus 4.0 3.6 32 2.8 2.4 Jan.10 May-10 Sepia Jan•11 May•II Sep11 &wee JP. L'afgrrk Calms°, &aortic& Consensus Emearim fefecasIs m kt maims and ccunlun Pal., avenged using the we Spar ming USD GDP wiibls that., use bf cui can OW groat!, breast. More details in ... Global Data Watch. Bruce Kasman and David Hensley Global Markets Outlook and Strategy. Jan Loeys. Bruce Kasman. et al. US Fixed Income Markets. Terry Belton and Srini Ramaswamy Global Fixed Income Markets, Pavan Wadbwa and Fabio Bassi Emerging Markets Outlook and Strategy. Joyce Chang Key trades and risk: Emerging Market Equity Strategy. Adrian Mowat et al. Rows and Liquidity. Nikos Paniginzoglou et al. Oct 21, 2011 2 EFTA01170208 Global Asset Allocation The J.P. Morgan View J.P, Morgan US reporting season, coupled with positive economic suprisea fuel the market rally. • 125 companies of the S&P500 have reported so far and 63% have beaten expectations. The S&P500 EPS tracks a $24.9 level for Q3, 30 cents above the bottom-up expectation at the beginning of month. More importantly, profit margins appear to have expanded over the past year. The S&P500 EPS is set to grow 16% YoY in Q3, vs 10% for Sales-per-Share. • Last week, we closed our underweight in Cyclical sectors as recent economic surprises make it likely that the global PMI will post an increase, the first in eight months, with the next release on Nov 1. We also opened an OW in Euro area (MSCI EMU) vs US equities (S&P500) as investor underweights are more extreme in the Euro area. • This week we add an overweight in EM equities. Our EM strategist Adrian Mowat believes that Emerging Market equities are bottoming out vs their DM counterparts. The MSCI EM $ Index has declined by 25% from its April peak vs. 16% for MSCI World $. The cumulative underperfonnance of MSCI EM vs. MSCI World since 6 Oct 2010, stands at 18%. This is the worst relative performance since the Lehman bankruptcy. • We see similarities with the post-Lehman period. At the time, in October 2008, EM equities started outperforming their DM counterparts, as EM policy makers started focusing on stimulating their economies. Just as then, EM policy priorities are shifting from inflation to growth. • The EM policy shift dictates a shift from defensive to domestic cyclical and interest rate sensitive stocks, especially those in Brazil, ASEAN and India. We upgrade Russia from UW to OW. Political risk is excessively discounted. At a 50% discount to EM, Russian equities are attractive. Credit • While risk markets have been eagerly anticipating the EU summit, better-than- expected economic data and earnings helped US credit extend the rally into a second week. JULI has retraced 32bp, and US HY 115bp, since the Oct 4 peak without a single daily up-tick in spreads. • The technical picture is looking more buoyant going forward as well, particu- larly in HY markets. US HY bond funds saw a two-year record hdlow of $2.3bn last week and our European strategists reported that EU HY bond funds saw a weekly inflow for the first time in three months also. US HG funds saw a ninth consecutive inflow last week. • Emerging market external debt finished the week wider, although EMBIG has tightened 78bp and CEMBI 99bp since the recent wides. The results of our sovereign survey suggest that investors identify EM corporates as having the most value following last month's sell-off (Jonny Goulden et al, Sovereign External Debt Investor Survey, Oct 20). Within the CEMBI, the strongest gains have come from companies in high-beta countries such as China, Indonesia and Russia. US EASI Index Balance of positive minus negative US economic surprises. 40 30 20 • 10 • o .10 20 -30 40 Jan.09 Jul.09 Jan-10 Jul.10 Jan.11 Jul'11 SCIJI1r. JP. Megan MSCI EM vs. World Reign* total return index based on MSCI Workl$ sector indices 260 MSC' EM$ vs Work* 220 180 140 ioo I I 2005 2006 2007 2008 2009 2010 2011 Sans: Oragrea”. J. P. Mgr More details in ... EM Corporate Outlook and Strategy. Warren Mar el al. US Cm& Markets Outlook and Strategy, Eric Beinstein et al. tign Yiekl Credit Markets Weekly, Peter Acciavani et al. European Crack Outlook & Strategy. Steven Dulake et S. Emerging Markets Cross Product Strategy Weekly, Eric Beinstein el al. Oct 21, 2011 3 EFTA01170209 Global Asset Allocation The J.P. Morgan View J.P, Morgan Foreign Exchange • The base case on the EU summits is that they deliver meaningful EFSF leverage without ECB funding; hint strongly at IMF credit lines; but require only moderate, private-sector funded bank recapitalization. That outcome could disappoint and prompt deleveraging, but existing USD longs and pre- hedging would limit moves. Keep yen hedges in this environment. Given the importance of recapitalization, an unambitious bank strategy could trigger deleveraging and modest USD strength, though positions constrain how far the dollar can move. Investors are long of dollars on a variety of measures ranging from currency futures to fund manager betas, even if exposure has declined from the near-record level held at the end of September. Other indicators also suggest considerable pre-emptive hedging ahead of the summit. EUR/USD 7-day vol has spiked close to the year-to-date highs, and risk reversals across USD-based pairs are still heavily skewed for USD upside. • For the past two weeks, we have been barbelled between tactical longs in cyclical currencies which overpriced recession risks; and core yen longs to hedge event risks and position for lower rates in the US and Europe. The cyclical trades consisted of owning cheap currencies (SGD vs USD), and selling USD or EUR upside where option skew priced in a Lehman-like event (sold 1.09 USD/CAD call. 0.7550 NZD/USD put and 9.29 EUR/SEK call). Keep these trades: we doubt the EU package will be underwhelming enough to deliver USD strength beyond these CAD and NZD strikes, or EUR upside beyond the SEK strike. Owning the yen always served two purposes: hedging short-term event risk and positioning for rate compression between US/Europe and Japan. Keep the basket of yen call spreads. • Given the importance of recapitalization, an unambitious bank strategy could trigger deleveraging and modest USD strength, though positions constrain how far the dollar can move. Investors are long of dollars on a variety of measures ranging from currency futures to fund manager betas, even if exposure has declined from the near-record level held at the end of September. Commodities • Commodities are down around I% this week led lower by base metals. Copper was particularly volatile this week, down 6% yesterday but up 5% today. The physical market has now started to show signs that the demand picture is improving. Cancelled warrants, a demand indicator, are at their highest globally for two years and physical premia in China are currently at their highest this year, suggesting strong domestic demand. Given a tight scrap market and weak supply outlook, this reaffirms our view that demand for copper will outpace supply this year and that the recent correction was overdone. • Oil is broadly flat this week in spite of the news that Colonel Gaddafi was killed along with the head of his armed forces by the Libyan rebels. This news does not have an immediate impact on prices as the rebels had already secured the country's oil facilities and progress towards returning supply to pre-crisis levels appears to be going well. However, it does remove one notable risk. Gaddafi had apparently been planning a campaign of insurgency that would have complicated the restoration of oil production. Iraq and Nigeria have shown how much of an impact sustained campaigns of insurgency can have on oil supply. FX weekly change vs USD 2% - 1% 0% .1% USD EUR GBP JPY CHF CAD AUD TWI Settee: J.P. tAsgm More details in ... FX Markets Weekly. John Normand et at. Commodity Markets Outlook 8. Strategy. Colin Fenton et al. OA Markets Monthly. Lawrence Eagles et al. Metals Review and Outlook. Michael Jansen Global Metals &latterly. Michael Jansen Oct 21, 2011 4 EFTA01170210 Global Asset Allocation The J.P. Morgan View J.P. Morgan Interest rates Current Dec-11 Mar-12 Jun-12 Sep-12 YTD Realm• Untied Stales Fed I unds rate 0.125 0.125 0.125 0.125 0.125 10-year yields 2.20 2.25 2.60 2.80 2.83 7.9% Euro area Ref rate 1.50 1.00 1.00 1.00 1.00 10-year yields 2.11 1.55 1.60 1.80 2.00 7.0% Untied Kingdom Repo rate 0.50 0.50 0.50 0.50 0.50 10-year yields 2.53 2.10 2.10 2.10 2.10 11.7% Japan Overnight call rate 0.10 0.05 0.05 0.05 0.05 10-year yields 1.01 0.85 1.00 1.10 1.10 1.8% GBI-EM hedged in Yield • Global Diversified 6.48 6.90 4.3% Credit Markets Cement Index YTD Return' US high grade Ibp over UST) 225 JRMorgan JULI Rorfollo Spread to Treasury 6.4% Euro high grade (bp Over Euro gov) 277 iBoxx Euro Corporate Index 2.0% USD ti.gn yield (bp vs. UST} 748 JRMorgan Global High YES Index STIV 3.1% Euro high yield (bp over Euro gov) 845 iBoxx Euro HY Index -3.7% EMBIG (bp vs. UST) 4C6 EMBI Global 5.6% EM Corporates (bp vs. UST) 456 JPM EM Corporates (GEMS!) 1.6% Commodities Current Ouarterly Averages 1104 1201 1202 1203 GSCI Index YTD Return' Brent (tobbl) 110.8 115.0 120.0 120.0 125.0 Energy 0.3% Gold IS:oz) 1638 2150 1925 1875 1850 PrOCO,JS Metals 13.0% Copper (Wept ion) 6722 7250 8250 8500 9250 Industrial Metals -26.5% Corn ($Bu) Foreign Exchange 6.58 Current 6.40 6.70 7.00 6.80 Dee•11 Mar-12 Jun-12 Sep-12 Agno.aure -1/3% 3m cash YTD Return' Index In USD EURAJSD 1.39 1.38 1.38 1.40 1.42 EUR 3.4% USD'JPY 76.1 75 74 73 72 JPY 5.8% GBP/USD 1.59 1.59 1.58 1.58 1.60 GBP 1.1% USD1BRL 1.77 1.80 180 1.80 1.80 BRL -1.1% USD/CNY 6.38 6.30 620 6.10 6.00 CNY 2.0% USDKRW 1148 1070 1050 1020 1010 KIM 0.8% USD/TRY 1.84 1.65 1.65 1.65 1.65 TRY .13.4% YTD Return Equities Current (local ecy) US Europe Sector Allocation ' YTD YTD Japan YTD EM YTD (3) SEP 1234 4.3% Energy 0.8% 4.2% 4.0% •202% Nasdaq 2632 4.2% Materials -13.1% -25.4% -18.4% -26.0% Topix 744 4-15.3% Industrials 46% -19.8% 45.1% -28.8% FTSE 100 5489 -4.2% Discretionary 3.4% -12.2% 4.1% MSCI EUM20110. 129 •15.8% Staples 7.5% 0.4% 4.5% 4.7% MSCI Europe' 996 -11.9% Healthcare 5.0% 3.4% -4.0% -20.1% MSCI EM $' 908 49.1% Financials -18.7% -23.9% -22.4% -23.7% Brazil Bovespa 55282 -20.2% Intonation Tech. 1.5% 4.7% -25.1% -17.4% Hang Seng 18028 -20.9% Telecommunicaticom 0.9% 4.5% 4.1% 4.7% Shanghai SE 2317 -20.9% 'Levels"retums as of Ocl 20.2011 Local currency except MSCI EM $ !Mines 13.1% -11.1% -44.8% -16.6% Overall 4.3% 41.9% -15.3% 49.1% Source: Bkonixect Oalasteant IBES Standard & Peat smiee J.P Megan =Wafts Od21,2011 5 EFTA01170211 Global Asset Allocation The J.P. Morgan View J. P Morgan Global Economic Outlook Summary Real GDP %mei a year ago Real GDP %env pre.1a4 Saar Consumer prices % a seal ago 2010 2011 2012 1011 2011 3011 4011 1012 2012 3012 4010 2011 4011 2012 The Americas Untied Stales 3.0 1.7 1.5 0.4 1.3 _281 1.0 OS 1.5 2.5 1.2 33 32 1.3 Canada 3.2 2.2 22 3.6 -0.4 1.$ 2.4 2.6 2.6 2.4 2.3 3.4 2.6 1.6 Latin America 6.0 42 32 5.6 4.1 3.1 2.5 1.6 4.4 4.7 6.7 6.7 72 6.9 kgentna 9.2 7.5 3.0 13.1 10.2 4.0 2.0 0.0 6.0 4.0 11.0 9.7 11.0 10.0 Brazi 7.5 3.3 3.4 5.0 3.1 1.9 2.7 33 4.2 4.2 5.6 6.6 6.7 5.3 Chile 5.2 6.5 4.0 6.4 5.7 15 25 3.5 4.5 5.0 2.5 33 3.6 3.6 Colombia 4.3 5.3 3.7 2.9 8.5 3.5 13 3.0 4.0 5.0 2.7 3.0 3.9 3.0 Ecuador 3.6 6.0 3.0 7.3 3.0 2.0 1.0 2.0 3.5 4.0 3.4 4.1 3.9 3.6 Mexico 5.4 4.0 23 2.4 4.5 5.2 2.6 -1.7 4.1 4.8 4.2 33 32 3.5 Peru 8.8 6.3 4.5 6.9 4.5 a5 3.0 4.5 5.0 6.2 2.1 3.1 4.0 3.6 Venezuela -1.5 3.5 3.0 14.7 -3.2 -1.5 3.0 3.0 5.0 6.5 27.3 24.6 29.0 33.6 AslaPacIfIc Japan 4.0 -0.6 1.9 -3.7 -2.1 5.5 2.0 1.8 1.5 1.3 -0.3 -0.4 -0.1 -0.7 Australia 2.7 1.4 3.5 -3.4 4.8 2.1 22 4.1 3.4 4.8 2.7 3.6 3.8 3.2 New Zealand 1.7 2.0 32 3.5 0.4 LB 4.1 3.9 3.9 5.6 4.0 5.3 32 2.4 Asa ex Japan 9.1 7.2 6.6 9.01 5.71 6.11 521 7.01 6.81 7.21 4.9 53 5.11 4.3! China 10.41 9.0 t 831 9.01 791 791 8.0 1 821 8.21 8.91 43 53 4.9 T 3.8 Hong Kong 7.0 5.2 4.0 13.0 -2.0 LB 33 5.5 5.6 4.5 2.7 52 5.1 4.3 India 8.5 7.6 83 8.3 LB 7.5 7.1 8.6 9.0 9.5 9.2 9.1 8.7 7.8 Indonesia 6.1 6.3 52 6.8 5.4 6.2 5.5 5.0 4.5 5.0 6.3 5.9 4.5 5.6 Korea 6.2 3.9 4.0 5.4 3.6 3.6 42 4.0 4.0 4.0 3.6 42 3.7 3.1 Malaysia 7.2 4.0 1.5 5.5 3.2 t() 1.0 1.5 IS 1.5 2.0 33 22 2.4 Philippines 7.6 4.1 4.0 7.8 2.4 41 2.4 2.4 7.4 5.3 3.5 5.0 4.6 3.3 Singapore 14.5 4.9 1.5 27.2 -6.5 1.6 -3.9 2.0 6.1 6.1 4.0 4.7 5.6 4.0 Taiwan 10.9 5.0 3.0 14.6 0.9 1.0 2.0 33 3.8 4.6 1.1 1.6 22 2.0 Thailand AlrIcallddle East 7.8 2.51 2.61 8.1 -0.8 A 4.01 15.01 -1.01 1.3 2.9 4.1 3.7 3.6 Israel 4.8 4.3 2.9 4.8 3.7 2.4 12 02 3.2 6.1 2.5 4.1 22 2.3 South Africa Europe 2.8 3.1 2.5 4.5 1.3 1.0 3.9 2.3 2.6 2.8 3.5 4.6 62 6.4 Euro area lit lit -031 31 011 1St -0.5 -1.0 -13 0.0 2.0 22 22 1.6 Germany 3.6 3.01 031 5.5 03 3.01 -OS 0.0 -0.5 03 1.6 23 2.6 1.6 France 1.4 1.7 T 0.0 1 3.7 0.0 LO t -0.5 1 -OS -1.0 0.5 1.9 22 23 13 Italy 1.2 0.6 T -11 r 0.5 1.2 0.01 -1.5 -1.5 -2.5 -0.5 2.0 2.9 3.7 2.6 Norway 2.1 22 0.7 1.9 4.1 1.5 0.5 0.0 0.0 1.0 2.2 1.4 1.1 1 1.2 Sweden 5.4 4.1 0.4 3.1 3.6 2Q 0.0 -03 -0.5 03 1.9 2.9 231 11 = United Kingdom 1.8 0.9 0.7 1.6 0.4 13 1.0 0.5 -1.0 2.5 3.4 4.4 4.9 2.8 Emerging Europe 4.5 3.8 2.5 3.6 1.2 221 1.3 3.1 3.0 3.8 6.6 7.1 62 5.5 Bulgaria 0.2 2.8 24 Czech Republic 23 2.0 1.0 3.5 0.3 Li -03 03 1.3 23 2.1 12 12 2.5 Hungary 1.2 1.4 0.5 1.2 -0.2 0.3 0.0 0.0 1.0 13 4.4 4.0 311 4.4 Poland 3.8 4.0 T 2.7 4.5 4.5 _351 2.0 2.0 2.5 3.0 2.9 4.6 3.9 2.5 Romania -1.3 12 02 7.9 82 4.0 3.5 Russia 4.0 3.4 3.0 3.7 0.4 LO 1.0 4.0 3.5 4.5 8.2 9.6 7.4 6.5 Turkey 9.0 63 2.7 7.4 5.9 7.6 7.2 Global 3.9 2.6 2.0 2.6 UT 3.1 1 1.6 1 IS 1.71 2.7 2.7 33 32 2.4 Developed madots 23 t 1.4 T 0.9 0.9 0.7 221 03 03 0.4 1.5 1.5 23 2.7 13 Emerging markets 7.3 5.7 4.9 7.2 T 4.5 1 4.61 421 4.9 T 5.41 6.0 5.6 62 5.8 T 5.21 Sturce. JP. Aktgan Oct 21, 2011 6 EFTA01170212 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 indi- vidually 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. Other Disclosures J.P. Morgan (-112M") is the global brand name for J.P. Morgan Securities LLC ("JPMS") and its affiliates worldwide. J.P. 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