House Oversight — Estate records
HOUSE_OVERSIGHT_030848
JPM The J.P. Morgan View 2013-03-28 1084792
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Global Asset Allocation 28 March 2013 Click play to view the video The J.P. Morgan View Local forces are dominating � Asset allocation –– Local risks and opportunities trump global forces in driving investment opportunities. Cross-market correlations to remain much lower than in recent years. � Economics –– US activity data are coming in better than hoped, but we need another 1-2 months to see how consumers are responding to higher taxes. � Fixed Income –– Search for carry to trump Euro area jitters over time. � Equities –– Japan remains our main country overweight. � Credit –– We OW covered bonds in the Euro periphery over senior bank bonds and subordinated vs senior bank bonds in the core. � Currencies –– Cyprus to have minimal further impact on EUR, but a ECB rate cut would push it a few cents lower versus the dollar. � Commodities –– Stay long Brent and short gasoline. � US stocks continue to gain, with the benchmark S&P500 breaching its all time high level today in a gentle fashion. Bonds are generally up this week on dovish comments from both the Fed and the BoJ. Commodities have gained also, but credit remains the troubled asset class with spreads wider in most markets, especially in EM external debt. � Our overall investment theme remains that there is no overarching global investment theme anymore this year but instead a number of unrelated local forces that have largely local impact. The generalized asset reflation we saw last year, with risk premia coming down consistently across the globe and asset classes, was due to a gradual fading of tail risks that has since been largely completed. “Risk-on, risk- off is so last year”. � In addition, we are seeing no momentum either way in global growth, price or earnings expectations that could put us into a bullish or bearish growth story. Our 2.4% projection for 2013 world economic growth is unchanged since November. YTD activity data for the world are tracking our 2.6% forecast for Q1, comfortably up from the d […]