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