From: US GIO To: Undisclosed recipients:; Subject: WPM View 10.19.2012 Date: Fri, 19 Oct 2012 20:11:03 +0000 Attachments: JPM_View_l0.19.2012-pdtzip Inline-Images: image003.png Global Asset Allocation IS October 9012 The J.P. Morgan View The mean and the mode • Asses allocation — Our modal forecasts on the economy and eaniauts are still edging down but so are downside risks. such that the probabihry-weighted means are instead rising We stay long risk assets. and add longs en euro prophecy bonds and slats m overall bond duration With event risks moving from China and Eueope to the US. we mow makeweight US equities and overweight USTs vs_ Europe. while staying short the dollar. Global Asset Allocation Joni S ht !Mayan Chase aria NA John Normand • Eninsamies — US 2013 growth is lowered by 01% to 1.7% as we raise 2013 fiscal drag to -2% JP Mins Starers ph • Find latoesis —Look fee the rally in Euro area preipberals too:canoe. Nikoloos Pan istroglou • Equities —UW US equities within a global portfolio into 2013 • Credit — We lower our YE US HO speed target to 135bp, down from 150bp Jp Popo .Aesecies pr Seamus Mac Gonda • Currencies — A Romney win shoukl be dollar bearish. as it boosts risk assets • Commodities — We stay long base metals J P Mover Soartos Pe Matthew Lehmann • Risk markets continue to yo-yo, with this week being up. while last week was gloms. Bond markets are =tonne the move, in reverse Most Matteis remain within thew 2-month range. but credit is ourperfomung with spreads reaching new lows for the year J.P. mew Slats as Leo Evans • We continue to see risk markets supported by a bettor mean, despite a poorer mode. That is statistics language for saying that out best-guess modal forecasts for global economic growth and earnings next year are still edema gently down. 1 JP. Magri stases Vs but the probability weighted mean of different outcomes for next year is. in YTO returns through Oct It contrast, still slowly i