All into Account

Looking ahead to next week’s BoJ monetary policy meeting, Fujita-san joins us to share her views of what to expect including the timing of QT, the rate hiking trajectory, terminal rates, and the inflation outlook. Yamawaki-san explains what’s been driving the move up in JGB yield post NIRP. With regard to the upcoming MPM, we see some upside for yields from here as the market is underpricing rate hikes relative to our view, and demand from Japanese lifers is blunted as they await better yield levels. Speakers: Thomas Salopek, Head of Global Cross Asset Strategy Ayako Fujita, Chief Japan Economist Takafumi Yamawaki, Chief Japan Rates Strategist This podcast was recorded on 5 June 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4714146-0, https://www.jpmm.com/research/content/GPS-4711466-0, https://www.jpmm.com/research/content/GPS-4714651-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy Last couple of months are showing softening US growth momentum, but at the same time an increasing potential for higher for longer Fed. We see the market upside capped during summer due to the inconsistency between consensus call for disinflation on one hand, and the belief in no landing and in earnings acceleration on the other. Within the market there was a more Defensive rotation underway in Q2, compared to Q1. We think this will continue on likely peaking in bond yields and more attractive valuations. At sector level, we hold a barbell of Defensives and Commodities, and are in particular cautious on Consumer Cyclicals such as Autos and Travel & Leisure. Stylewise, our OW on Growth vs Value continued working – we are not changing it for now, but Small caps could trade better in 2H. They have again lagged ytd, in all key regions, are cheap, and typically perform better when policy cuts start in Europe. In addition, European activity already had a reset last year, and is likely to be better this year. For the US, the rotation might work also, but we do not see it as clear cut, as Fed could stay higher for longer, and US domestic growth could actually weaken meaningfully in 2H. We reverse our long-term preference for FTSE100 vs FTSE250. This podcast was recorded on 02 June 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4715457-0.pdf for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Eric and Nelson join us to discuss their views on HG and HY. For HG, we review what’s driving the low volatility of credit spreads, whether credit investors becoming more defensive, and what would cause spreads to break out either way. For HY, we highlight our recent forecast revisions, our default rate assumptions, and how recent capital market activity is affecting spreads. Speakers: Thomas Salopek, Head of Global Cross Asset Strategy Eric Beinstein, Head of US Credit Strategy Nelson Jantzen, Head of US High Yield and Leveraged Loan Strategy This podcast was recorded on 29 May 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4713311-0, https://www.jpmm.com/research/content/GPS-4713437-0.pdf, and https://www.jpmm.com/research/content/GPS-4704000-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy In this report, we focus on two topics: first, at sector level on the Cyclicals vs Defensives performance into rate cuts and against the backdrop of falling bond yields, and at the style level on the performance of Large vs Small caps. Historically, Defensives and bond proxies struggled when bond yields would be moving higher. This phase might be ending. Especially if bond yields are falling as economic growth is moderating, the sector leadership is likely to be more Defensively tilted, as is the case so far in Q2. Additional considerations are: valuations – Cyclicals are generally trading stretched vs Defensives; past performance – the Cyclical run over the last 18 months has opened up a gap with PMIs, which has not closed yet; and finally the weaker recent earnings delivery of Cyclical vs Defensive sectors. We favour a barbell of Defensives and Commodities. With respect to Small vs Large caps style tilts, there is a typical pattern of weakness in Small caps into, and a rebound post, the start of central banks easing. This is visible for both the Eurozone and UK small caps. For the US Small vs Large caps, the weakness into the first Fed cut is seen too, but there was no imminent rebound, more a weaker performance for another six months or so, and only then a recovery. Additional consideration for small caps trade is likely the domestic economic backdrop. Here, European growth had a reset last year, and is looking sequentially better this year, while US was resilient last year, but could soften from here. Small caps have had two poor years everywhere, and are lagging again so far ytd, by 9% in the US, 4% in Eurozone, 2% in UK and 8% in Japan – the turn might be upon us, likely more in Europe than in the US, though, given less visibility over Fed start and softer forward activity momentum in the US. This podcast was recorded on 27 May 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4117650-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker - Mislav Matejka, CFA, Head of Global Equity Strategy Q1 reporting season again showed an age-old pattern of beats vs heavily lowered expectations. For full year 2024, earnings projections in the US are unchanged ytd, and down a few percent in Europe. The downgrades to sellside analyst EPS expectations throughout the year are nothing unusual, they happen most of the time, without adverse equity market reaction, but we believe that it is important that they do not escalate, as then the market might not be able to look through them. Beneath the surface, there are three interesting trends, one being maintained, and two showing a rotation: 1. All the US earnings growth is still Mag-7 driven. Q1 was the 5th quarter in a row where, if Mag-7 contribution is taken out, the remaining 493 S&P500 constituents have shown outright negative yoy% EPS growth. This has been beneficial to our continued OW on Growth vs Value style, and OW large vs small caps, but the odds could be increasing that we might see some reversal. 2. European earnings are starting to do better vs the US, and that was one of the reasons why we upgraded Eurozone vs the US last quarter. We continue to believe that the region will at least hold its own vs the US, irrespective of the direction of the overall equity market. 3. Cyclical sector earnings are softening vs Defensives. For S&P500, median Cyclical EPS growth is now below Defensives, for the first time since Covid. This is one of the reasons why we argued in early April for a rotation into Defensives, especially into the Utilities and Real Estate sectors. From a top down perspective, we are particularly concerned about the earnings prospects of the Autos sector, rating it as UW. This podcast was recorded on 19 May 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4117650-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy After a terrible spell between Jan ’23 and January of this year, where MSCI China lost almost 40%, it is now up 25% from the lows. While we do not believe that the longer term structural concerns of deflationary backdrop, real estate demand-supply imbalances, credit saturation and global decoupling are finished, our tactical view remains that the more positive China trading could last through summer, through July-August, until the US elections heat up in earnest. There is still an EM investor underweight on China, and the valuations probably have another 10-15% upside before closing the discount to historical. A more bullish tactical China stance was one of the drivers of our upgrade of Eurozone equities in Q1. We continue to believe that Eurozone risk-reward has improved, and that the region will at least hold its own vs the US, whether the overall market goes up or down. UK (OW) is also starting to trade better of late, erasing the almost 10% relative weakness seen earlier in the year. At sector level, we think commodities remain interesting as a way to position for more positive China trading, both Mining and Energy. We are less positive on some of other traditional China plays, such as Autos (UW) and Luxury (N). Pricing is a significant risk for both, as well as a potential volume disappointment, leaving their elevated margins at risk. More broadly, at sector level we have been arguing that Defensives should start to trade better, last month Real Estate, Utilities, Staples and Healthcare are top 4 sectors in Europe. Now, more positive tactical China call is clearly a big help for EM group, but we do not believe EM is a buy vs DM. The headwinds for EM remain Fed higher for longer, and stronger USD. EM equities typically struggle to outperform DM when their currencies are under pressure. This podcast was recorded on 12 May 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4696703-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

It’s been a tough year for both getting long outright duration or being long steepeners. We expect disinflation will reassert itself, but in the near term, there is event risk (e.g., CPI & HICP numbers) making us cautious. Fabio joins us to discuss the catalysts to trade duration, the curve, and intra-EMU spreads. Speakers Thomas Salopek, Global Cross Asset Strategy Fabio Bassi, Head of International Rates Strategy This podcast was recorded on May 8, 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4691318-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speakers: Joyce Chang, Chair of Global Research Jan Loeys, Long-term Strategy Joe Lupton, Economic and Policy Research Natasha Kaneva, Global Commodities Research Steve Dulake, Global Head of Credit, Securitized Products and Public Finance Research This podcast was recorded on 7 May 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4682573-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy We are concerned about inflation staying too high if there is no slack created in the economy, adverse bonds demand-supply with negative term premia, consensus expectation of profit acceleration of almost 20% between Q1 and Q4 of this year, which doesn’t typically happen, especially if the economy softens in 2H, consumer tailwinds potentially turning, as well as concentration and leadership reversal hurting the market. At the core, the Goldilocks view that market embraced in Q1 of inflation/rates moving lower but at the same time of earnings acceleration and economy having no landing remains an inconsistent one. In fact, the Growth-Inflation tradeoff could end up the opposite, as seen in recent ISM showing a spike in pricing and slowing orders. Together with seasonally poor time for markets coming up and still stretched positioning, we look for more of a consolidation in equity markets over the next months. Within this, we advocate for some of the rotations to come up/have legs. Growth is ahead of Value ytd, small caps are heavily behind again ytd. We fundamentally stay with Growth, Quality and large caps tilts, but the turn could be coming, where small caps tended to perform better as ECB starts to ease. Regionally, we have in Q1 taken profits on US vs Eurozone OW, as well as tactically exited our longstanding China bearish stance. The latest market move to a more Defensive trading should have legs, such as recent outperformance of Utilities and Staples, alongside commodity sectors. This podcast was recorded on 06 May 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4691410-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav Matejka, CFA, Global Head of Equity Strategy At the overall market level, we remain concerned about the repeat of last summer’s drawdown, inflation staying too hot is a real possibility, market will not like it if bond yields move above 5%. Within this, we have made some regional changes in Q1, specifically we tactically closed our longstanding China bearish view, given 30%+ drawdown in the past 12 months. Also, we have upgraded Eurozone equities last quarter. To be clear, we don’t expect Eurozone to directionally decouple from the US, but it is interesting that in the recent bout of market weakness, S&P500 was down 5-6%, in contrast to EuroStoxx50 down only 3%. We continue to see an improved relative risk-reward for Eurozone equities: 1. Eurozone is trading at 13x forward P/E, vs S&P500 at 20x. In terms of shareholder returns, buybacks yield in Eurozone has moved closer to the US, while dividend yields are remaining double the US. 2. In what is historically atypical, ECB is set to start cutting ahead of the Fed, and by a greater magnitude. At the same time, PMI momentum is improving in Eurozone vs the US, post last year’s reset. 3. Tactically better China performance will help Eurozone vs the US trade, and also UK (OW) and commodities. 4. We have held preference for Growth over Value, for High vs low Quality and for large vs small cap stocks, and we still believe that fundamentally these are right exposures, but do recognize the potential for reversal is very high. Now, the risk of extreme concentration and the momentum unwind is also present in Europe, but it is on a much bigger scale in the US. In the report we address the market, sectors, styles etc. behavior around the first ECB cut in the cycle, which is likely coming up in June. Notably, small caps begin to perform better post the start of ECB cuts. This podcast was recorded on 28 April 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4683726-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speakers: Thomas Salopek, Head of Global Cross Asset Strategy Ipek Ozil, US Interest Rate Derivatives Strategist Powell’s recent comments represent a strong reversal from the dovishness from March, so policy uncertainty remains as elevated as ever. In response to strong CPI data this week, the options markets are implying a significant weight on a hike by year-end, leaving rate-cut scenarios with a total weight similar to rate hike scenarios. This podcast was recorded on 17 April 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4669694-0, and https://www.jpmm.com/research/content/GPS-4672843-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav, Matejka, CFA, Head of Global Equity Strategy Q1 reporting season is upon us. As is typical, consensus projections have been moving materially lower over the past months. For S&P500, IBES is now calling for 3% yoy EPS growth, which is down from 10-12% projections seen last summer. In a break from recent norms, though, the activity momentum firmed up during the quarter, as seen in rising global PMIs. These together suggest that we will get earnings beats. The likely earnings beats do not necessarily mean that equities will advance during the reporting season, though. This is because the market has already strongly rerated during Q1, and the big gap has opened up ytd between Fed projections and equity index levels. The risks of interest rates spiking for the “wrong reasons”, Fed pivot getting fully reversed and inflation staying too hot are all elevated. At the same time, geopolitical uncertainty could quickly spike further, and any de-escalation prove fleeting. In addition, consensus expectations are for a very steep climb in earnings over the next few quarters, from Q1 S&P500 projection of 55$ to Q4 forecast of 65$, amounting to an almost 20% increase. This is at a risk of disappointment. In terms of earnings themes, pricing is likely to soften, with topline growth coming back to earth. At sector level, the pickup in commodity prices could help the respective sectors performance. We recently advised for Utilities to perform better, irrespective of bond yields move, and believe that Banks earnings results could end up underwhelming. Regionally, we believe that the period of US earnings outperformance vs Eurozone might be ending. The relative US-Eurozone PMI momentum is likely peaking, which suggests relative EPS delivery might be turning too. These support our recent upgrade of Eurozone equities vs the US. This podcast was recorded on 14 April 2023. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4671662-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

A hot CPI print following the recent strong jobs print has put ‘high for long’ back in focus, challenging the soft landing narrative. We discuss with Phoebe what these ‘bumps in the road’ mean our views on TIPS, breakevens, and duration generally. As for Gold, Greg dissects the reasons for the recent rally and reviews whether the rate cutting cycle is going to be as bullish for Gold as it was historically. Speakers: Thomas Salopek, Global Cross Asset Strategy Phoebe White, Head of US Inflation Strategy Greg Shearer, Head of Metals Research This podcast was recorded on 11 April 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4671684-0, https://www.jpmm.com/research/content/GPS-4667440-0, for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy With respect to bond yields’ direction, our call last October was to go long duration, that bond yields have likely peaked. After the ytd bounceback, we think that yields will resume moving lower. Our FI team forecasts that US and German 10-year yields will be below current on 3-, 6- and 9-month horizons. We fundamentally agree with this, especially given the elevated geopolitical risks at present, but note the risks of inflation staying too hot. The Fed might be wrong to assume that all the recent inflation pickup is transitory; also the term premia are outright negative again – pointing to inflation complacency. If bond yields end up moving higher from here, against our base case view, that might be “for the wrong reasons”, with market weakening in that scenario, like last summer. Now, irrespective of how one sees the bond yields’ direction from here, we think that the Utilities sector’s poor performance has likely gone too far. If yields fall, as is our core view, that should help the sector. In the opposite scenario, the overall market could weaken, and the typical low beta of Utilities could come to the fore. In addition: 1. The client concern is with respect to perceived elevated leverage of the sector, but we think this is misplaced. Leverage is higher than in the past, but cash flow generation is strong and Utilities stocks are solidly investment grade. 2. Utilities have been derated to pre-Ukraine levels, but power prices are still higher than pre-Ukraine. Power prices should not go lower from here, as industrial demand is starting to come back. 3. Earnings relative of Utilities are continuing to move up, making the sector very attractive at present. P/E relative of Utilities is near record cheap. 4. Renewables have been underperforming the rest of the sector for more than three years now, and are increasingly more attractively priced. We also think that Real Estate should be looked at again. This podcast was recorded on 07 April 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4650376-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy In terms of leadership, US and Japan are ahead of other markets ytd, Growth is outperforming Value and large caps are again beating small, in all key regions. We continue to believe that this style of leadership will broadly stay the case for a while longer, until there is a break, or a reset, in the cycle. For Value, commodities, low Quality, small caps, EM or International stocks to begin leading more sustainably one needs to see a reflationary backdrop, in our view, but we could have the opposite. Within this, we have recently taken profits on US vs Eurozone OW, as the Eurozone risk-reward has improved, in our view. Among other, Eurozone valuations appear very attractive, relative growth momentum could be bottoming out and ECB could start moving ahead of the Fed, which would be very atypical. We also have a tactical buy on China given extreme cheapness and UW positioning by most investors. Broadly, JPM Fixed Income’s call is that bond yields are fundamentally set to move lower in 2H, but we note a pickup in inflation swaps, as well as the outright negative term premia for bonds again, which suggests that there is a lot of complacency in the bond market with respect to the inflation risk. Consequently, the gap that has opened up ytd between Fed futures and the equity market is getting wider. Equities rallied almost 30% from last October lows, driven in Nov-Dec by the expectation of a Fed pivot, but these projections have fully reversed back to October low levels. Equities are ignoring the most recent pivot of a pivot, which might be a mistake. The assumption that the market is likely making here is one of growth acceleration coming to the rescue in 2H. In this regard, we note that earnings projections for 2024 are still not moving up. Regionally, Japan is staying our top pick, continuing our 2023 preference. This podcast was recorded on 31 March 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4662999-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Using positioning as a guide, investors have been expressing the opinion that Mortgages are cheap relative to Corporates, but the excess returns have gone the other way, with Corporates outperforming by ~1% in terms of excess return YTD. Looking ahead, Corporates can still outperform MBS in a range-bound rate environment with little economic growth risk while high-coupon MBS, with better yields due to negative convexity, can also do well in a stable rate environment. Speakers: Thomas Salopek, Head of Global Cross Asset Strategy Nathaniel Rosenbaum, HG Credit Strategist Nicholas Maciunas, Head of Agency MBS Research This podcast was recorded on April 1, 2024. This communication is provided for information purposes only. Institutional clients can view the related reports at https://www.jpmm.com/research/content/GPS-4656379-0 and https://www.jpmm.com/research/content/GPS-4658455-0. For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved.

Thomas Salopek speaks with Rie Nishihara, Head of Japan Equity Strategist, Takafumi Yamawaki, Head of Japan Fixed Income Research, and Ikue Saito, Currency Strategist. Speakers: Thomas Salopek, Head of Global Cross Asset Strategy Rie Nishihara, Head of Japan Equity Strategist Takafumi Yamawaki, Head of Japan Fixed Income Research Ikue Saito, Currency Strategist This podcast was recorded on March 25, 2024. This communication is provided for information purposes only. Institutional clients can view the related reports at: https://www.jpmm.com/research/content/GPS-4657063-0 https://www.jpmm.com/research/content/GPS-4655242-0 https://www.jpmm.com/research/content/GPS-4655120-0 https://www.jpmm.com/research/content/GPS-4658455-0 For more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved.

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy The bulk of the equity performance so far this year, and indeed in the past 18 months, was driven by multiple expansion. Globally, 12m forward earnings are up only 7% from the lows, in contrast to nearly 30% P/E upmove. 2024 EPS projections are again down small in the US ytd, and are more meaningfully lower in Europe. At the same time, bond yields are higher, squeezing ERPs. Global earnings yield vs bond yield differential has been moving lower, to be now below 2007 levels. Central banks are set to deliver some cuts in 2H, but in order to justify current equity valuations, we believe that we will need to see at least some earnings acceleration, as well. Ultimately, equity valuations will end up responding to earnings momentum trends, as there is a clear historical correlation between P/E multiples and earnings revisions. IBES is projecting a sequential pickup in earnings growth between 2023 and 2026, but our concern is that profit growth could underwhelm. If the earnings acceleration fails to materialize, this could act as a constraint, in particular for Cyclical sectors, which are currently trading at price and P/E relative highs vs Defensives. Regionally, China equities showed no rerating over the past 18 months, still trading around 9x forward, which is at absolute and relative lows. Eurozone trailing buybacks yield is at present quite close to US. At the same time, Eurozone dividend yield at 3.0% is much higher than US at 1.3%, and bond yields are meaningfully lower – with these three together resulting in a much better total equity yield vs bond yield for Eurozone equities than for the US, of 240bp – we closed US vs Eurozone OW last week. This podcast was recorded on 25 March 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4651219-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

In this podcast Joyce Chang, Chair of Global Research is joined by Sam Saperstein, Head of Women on The Move across the entire JPMorgan Chase platform to discuss the work J.P. Morgan Chase is doing on expanding women-owned businesses, bridging the funding gap for women founders and how we are promoting women and girls’ financial health. Speakers Joyce Chang, Chair of Global Research Samantha Saperstein, Managing Director and Global Head of Women on the Move, JPMorgan Chase Co Please see our annual J.P. Morgan Perspectives: Global state of gender balance in 2024: Post-pandemic gains, but far from parity report, where we explore the progress towards achieving gender balance and assess the challenges facing women in 2024. This was recorded on March 20, 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4645664-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.

Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy We have cut Eurozone to UW vs the US in early May of 2023, and had a preference for the US since. We are now closing the US over Eurozone OW, for the following reasons: 1. Eurozone has lagged in the past few quarters, losing 14% relative since May, and had relative outflows - in 41 out of the past 52 wks. At 13.3x forward, it is trading cheap vs the US, which is now on 21x. Even if one were to look at sector neutral P/E rating of Eurozone vs the US, it is trading the cheapest vs any time pre COVID. 2. We had a preference for Growth over Value style through 2023 and again this year. Even as we stay with this tilt, we note that Growth style has already performed exceptionally well, it is trading stretched and is at risk of a reversal. Of course, within Europe there is also an increasing risk of MOMO unwind, but the magnitude of the potential impact would always be greater for the US market. 3. In terms of activity momentum, Eurozone had a clear weakening through last year and especially relative to the US. The relative growth disappointments of the region might have peaked, as seen in improving relative CESIs. 4. While ECB typically takes its cue from the Fed, there is a chance that it moves ahead of the US this time around. 5. We have been cautious on China over the past year from a global allocation perspective, but have a tactically more positive China call, and if this continues tracking, it could indirectly help Eurozone. We are neutralizing the US vs Eurozone preference, but not reversing. This is because the potential for a market drawdown is elevated, with Goldilocks fully in the price. The risks are on both sides of this narrow path: either to growth disappointing, as seen in latest weak retail sales and US small business confidence, and also from inflation potentially staying too hot, as seen in the US 1-year inflation swaps approaching October highs. What is attractive in Euro Area? We note that every single Eurozone level 1 sector is trading at a greater than historical discount vs the US. This podcast was recorded on 17 March 2024. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4651487-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2024 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party. It is permissible to use J.P. Morgan Data for internal business purposes only in an AI system or model that protects the confidentiality of J.P. Morgan Data so as to prevent any and all access to or use of such J.P. Morgan Data by any third-party.