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From: US 61O cbs.gioapmorgan.com> To: Undisclosed recipients:; Subject: JPM View 05.11.2012 Date: Fri, II May 2012 21:41:413 +0000 Attachments: JPM_View_05.11.2012-pdfzip lane -Images: image003.png J. P. Morgan The J.P. Morgan View Will Europe be able to circle the wagons? • Asset Allocation —Greater pohlwal ask in Europe forte in to reduce equity longs. while staking in credit. m our asset allocation pcetfoho. • Economics — Weaker data for Apnl delay the expected bounce back in the Clime* eronamy Global growth (Meath unchanged fromJanuary. • Fixed Income — We add to Euro area hedges • Equines— Stay long US vs Euro area equities • Credit — We continue to fawn US credit and hold NECOEM markets in EN • For riga ear aaaaa — Add to USD longs. as adverse Greek news should push the earn down much more than upside created by positive Greek newt • C ommodities — Higher oil once m H2. but with elevated two.sarlednt • Equirt and conunoday markets endows tans week. and bands and Medals, are upon political paralysisIn Greeceled WealOn battle economic data. Credit in COntnisa performed better than other nsk markets with spreadsonly • few bums points wider. largely offset by lower underlying bond yields • Over the pa" month. equities are now down some 7% though still up on the year (chart on right) This is close to the limit of what one can call a profit. taking correction. and DM risks tinning into a broader and deeper downside move Relanve to where we were a few weeks ago. there is now a near.term downside nsk. but signals for 3-6 months our still sound positive tows This suggests retaining upside expose ro to equities and credit. %stale flat on tom:not-Win and bonds. focusing on the US nurket where there is least downside nsk adding sane near.tem downside protection and keeping overall tactual nsk below average In our own GNIOS asset allocation model portfolio. we an the equity long position in halt while keeping net long exposures in credit • Ha does one gauge the various forces driving nsk market') Staring with the ecaccarty cur 2012 and 2011 growth forecasts. at 2 2% and 264. remain UNC1I-ed since late Jamtary Consensus s WII1111/b; not moving The menape on the world economy remains 'low but stable'. For the CS. unchanged wieldy claims and a pop in Michigan consumer confidence are neutralising downside risks from recent weakness mob growth We arecomfortable with our 2 S%call for Q? 1.ess encouraging were the Apnl data front China that forced in to lower our G2 forecast from 7 8% to 7 0% saar IPand retail sales growth are slurring into Q2 Ow own and consensus projections on a rebomd in HZ depend on morytary and fiscal easing measures The next reserve requirement cut should come next month. followed by fiscal stimulus in the stain/ • Pnce momentum is now slightly positive for nsk assets down from strongly so That is because short-term momentum — the last month — s negative but the more reliable 6-mouth momennun. that is the basis of our rule-based The certifying analyst is mdrated by an m See page 7 for analyst certification and unponant legal and regulatory disclosures Global Asset AlloartIon JP Mown Goae6ad NA. JP Mogan Sammie Ltd May 11.2012 Jan Loayiec (I -212) alt 6474 jam loroysallanagan can John Normand (44.20) 7325.5122 pin normandera San can Melees PanIghtzoglou (4420) 77774246 fulic.bos panartrogkoufilprnagan can Some* Mac Cocain (44.20) 7777.21906 Manua.mr9clanthcolrgan tom Matthew Lehmann (44.20) 7777.1830 manna. m lehmannemsnagan cons Lao Evans (4/-20) 7742.2537 land a avanAtiomorgan can TMreturns nymph May to t. mon ranger corn $40$10 MHO 10•11 EMS Col YfHM 0.04. WO *c a' Two CM Fr 116 IV Gad. MO Europe leal5ords- US Flea Ilan Olt OcOolGoe8rch" Es.** Feel ham' Is act WO TR It •••• a • 0.0. Omen AS*. as LW Is. im•Asillwasa raw n vs..., creasse Kona" St IV DJ. •t WWW.morganmarettorn This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accuracy and completeness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at http://www.jpmorgan.comipages/disclosureskmail. EFTA01176769