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 •