Eye On The Market

In this month’s podcast, Michael looks at the midterms: GOP gains in the Senate, an historic loss in the House given economic and market conditions, and what it means for investors.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

A brief note on the latest price action in equity markets, how business cycles end, and how markets are being left to fend for themselves without central bank intervention for the first time in 20 years.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

In this Eye on the Market, Michael provides an update on the credit risk of US states based on their unfunded pension and retiree healthcare obligations. Please see the podcast video or visit jpmorgan.com/eotm for the slide referenced.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

Michael Cembalest discusses his latest Eye on the Market: America, First. Michael reviews the strength of US equity markets so far this year in the context of fading fiscal and monetary stimulus, signs of fatigue in US tech stocks and potential ramifications of constitutional and trade concerns. Other topics include current dynamics in Italy and the US commercial real estate market.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

Michael Cembalest discusses his latest Eye on the Market, The song remains the same. Michael reviews current market dynamics, walks through four investment strategies that have performed well over multiple cycles as this one enters its latter stages, and shares his thoughts on the Helsinki summit.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

Michael recaps the self-inflicted wounds of the Section 301 tariffs, and recaps his meetings in DC with a group of Congressmen to discuss debt, deficits and financial markets.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

In this episode, Michael Cembalest takes a look at the recent tariff announcements in the context of historical tariffs since 1900. While the tariffs are substantial for the industries affected, Michael explains why they may not move the needle for overall consumer prices or corporate profits. Please see the podcast video or visit jpmorgan.com/eotm for the slide referenced.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

Michael Cembalest discusses his latest Eye on the Market. Topics include the underappreciated risks of Chinese retaliation against US companies doing business in China, and how a full-blown trade war and military conflict are far from inevitable given the greater economic linkages between the US and China compared to adversaries of the last 100 years. Also, some thoughts on emerging markets, Turkey and serial defaulter Argentina.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

Michael Cembalest takes a unique look at US states, cities, and counties using his signature comprehensive debt ratio. While municipalities have time to address underfunded obligations, some face difficult trade-offs. Legal precedent shows that bondholder losses exceed pensioner write-downs. Given complacent conditions in credit markets, this is a good time to review muni diversification. Read more: jpmorgan.com/jpmpdf/1320745513818.pdf

*Please note this PDF is publicly available and issued through our Private Bank business.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 JPMorgan Chase & Co.

Michael Cembalest discusses his latest Eye on the Market, The Late Show. He considers why despite strong US earnings growth and global expansion, equity markets remain flattish in 2018. He tackles the drivers of somewhat muted equity returns by focusing on late-cycle investing, the Fed, and the factors affecting the path of interest rates (labor markets and the expanding budget deficit). Michael also discusses his views on the oil price recovery since 2016.

*Disclaimer: This podcast is intended for informational / market commentary purposes only, and is a J.P. Morgan Asset Management communication on behalf of J.P. Morgan Institutional Investments, Inc. a Member of FINRA. The views and opinions expressed herein constitutes Michael Cembalest’s judgment based on current market conditions and are subject to change without notice, and may differ from those expressed by other areas of J.P. Morgan Chase & Co., its employees, subsidiaries and affiliates worldwide. Views may not be suitable for all investors, and are not intended as personal investment, tax, legal accounting advice or as a solicitation or recommendation. Outlooks and Past Performance are never guarantees of future results. This is not investment research. This podcast should not be copied, distributed, published or reproduced, in whole or part, without our express permission. We believe the information contained in this material to be reliable but do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage arising out of its use. jpmorgan.com/disclaimer-eotm © 2018 J.P. Morgan Chase & Co.