Epstein Secrets

han EM. • Are depressed valuations a good reason to buy EM equities? We do not think so, either. It is true that the PE gap between MSCI World and MSCI EM indices has been widening for two years now to well above historical averages, 3.8 pts currently vs. a historical average of 2.7. This 3.8pt gap is

pressure on the currency that is preventing their central banks from easing rates. In addition, as reviewed in Job gains to lag global growth lift, Kasman et al., July 24, we see falling EM profit margins, in response to tight labor markets and rising wage costs, also depressing EM growth. • That sai

an EM. * Are depressed valuations a good reason =o buy EM equities? We do not think so, either. It is true that the PE gap between=MSCI World and MSCI EM indices has been widening for two years now to well=above historical averages, 3.8 pts currently vs. a historical average of 2=7. This 3.8pt gap is

pressure on the currency that is preventing their central banks from easin= rates. In addition, as reviewed in Job gains to lag global growth lift, Kasman et al., July 24, we see =ailing EM profit margins, in response to tight labor markets and rising wa=e costs, also depressing EM growth. • That sai

lobal growth forecast. More details in ... Global Data Watch, Bruce Kasman and David Hensley Global Markets Outlook and Strategy, Jan Loeys, Bruce Kasman, et al. US Fixed Income Markets, Terry Belton and Srini Ramaswamy Global Fixed Income Markets, Pavan Wadhwa and Fabio Bassi Emerging Markets Outlo

3% 12.2% Shanghai SE 2117 42% Utilities 47% 8.2% -20.4% 5.2% *Levels/returns as of Nov 08, 2012 Overall 15.6% 13.2% 4.4% 12.2% Local currency except MSCI EM $ Source: J.P. Morgan HOUSE_OVERSIGHT_026576 --- PAGE BREAK --- Global Asset Allocation The J.P. Morgan View 09 November 2012 Jan Loeys (1-212)