Guide To The Markets Q3 2023 1688397991

Global Market Insights Strategy Team GTM UK 2
Americas Europe Asia
Dr. David Kelly, CFA Karen Ward Tai Hui

New York London Hong Kong
David Lebovitz Gabriela Santos Hugh Gimber, CFA Vincent Juvyns Marcella Chow Shogo Maekawa
New York New York London Luxembourg Hong Kong Tokyo
Jack Manley Meera Pandit, CFA Max McKechnie Tilmann Galler, CFA Ian Hui
New York New York London Frankfurt Hong Kong
Jordan Jackson Stephanie Aliaga Natasha May Maria Paola Toschi Adrian Tong Chaoping Zhu, CFA
New York New York London Milan Hong Kong Shanghai
Nimish Vyas Mary Park Durham Zara Nokes Elena Domecq Jennifer Qiu Arthur Jiang
New York New York London Madrid Hong Kong Shanghai
Brandon Hall Kathleen Clum Marina Valentini Lucia Gutierrez Mellado Sahil Gauba Agnes Lin Kerry Craig, CFA
New York New York São Paulo Madrid Mumbai Taipei Melbourne
2
Page reference GTM UK 3
Global economy Equities ESG

4. Global growth 48. World equity valuations 82. Emissions targets and consumer concerns
5. Global Purchasing Managers’ Index (PMI) for 49. Regional earnings expectations and equity valuations 83. Carbon pricing
manufacturing 50. Global equity market correlations with Treasury yields 84. Global CO2 emissions by country
6. Global inflation 51. Global equity sector weights 85. Global energy mix and greenhouse gas emissions by
7. Global inflation expectations 52. Global equity income sector
8. Global inflationary pressures 53. Profit margins 86. Global energy transition
9. Global monetary policy 54. Equity market factors 87. Global energy consumption and renewable capacity
10. Global fiscal policy 55. US earnings 88. Droughts and food prices
11. Global government debt 56. US equity valuations 89. ESG and capital markets
12. Global housing markets 57. US valuations and subsequent returns
13. Credit quality and capital ratios 58. US bull and bear markets Investing principles
14. Household debt and construction investment 59. Europe earnings and buyback yields
15. US dollar 60. Europe equity valuations 90. Life expectancy
16. Global demographics 61. UK earnings 91. The effect of compounding
17. US GDP 62. UK equity valuations 92. Cash investments
18. US Economic Monitor 63. UK large, mid and small capitalisation equities 93. Long-term asset returns
19. US business and residential investment 64. Japan equity market and currency 94. Annual returns and intra-year declines
20. US consumer 65. Emerging market equity valuations 95. Asset class risk-return trade-off
21. US labour market 66. China equity price-to-book ratio and drawdowns 96. S&P 500 and fund flows
22. US inflation 67. Equity focus: S&P 500 valuations and technology 97. 25% drawdowns and subsequent returns
23. US Federal Reserve policy earnings 98. US asset returns by holding period
24. US mortgage costs and sensitivity 68. World stock market returns 99. Asset class returns (GBP)
25. US housing activity and inventories
26. US focus: Shelter inflation, profits and payrolls Fixed income
27. Eurozone GDP
28. Eurozone Economic Monitor 69. Fixed income yields
29. Eurozone business investment and credit conditions 70. Global government bond yields
30. Eurozone consumer and services activity 71. US yield curve
31. Eurozone labour market 72. Investment-grade bonds
32. Eurozone inflation 73. High yield bonds
33. European Central Bank policy 74. Global fixed income spreads
34. Eurozone focus: Natural gas storage and electricity 75. Fixed income focus: Diversification potential
prices 76. Global fixed income returns
35. UK GDP
36. UK housing market
37. UK consumer and labour market Other assets
38. UK inflation
39. UK Bank of England policy 77. Oil
40. UK focus: Mortgages and labour participation 78. Commodities
41. Japan GDP and inflation 79. Volatility and alternative investments
42. China GDP and business surveys 80. Inflation protection and alternative investments
43. China inflation and credit dynamics 81. Asset return expectations
44. China real estate
45. Emerging market structural dynamics
46. Emerging market growth
3 47. EM focus: Trade dynamics and Chinese economy
composition
Global growth GTM UK 4
Consensus forecasts for 2023 real GDP growth Composite Purchasing Managers’ Index (PMI)
Global economy
% change year on year Index level

6 70
65
5
60
4
55
3 50
45
2
40
1
35
0 30
UK Eurozone Japan US China '10 '12 '14 '16 '18 '20 '22
US Eurozone UK
Source: (Left) Bloomberg, J.P. Morgan Asset Management. Forecasts are from Bloomberg contributor composite. (Right) S&P Global, J.P. Morgan Asset
Management. A score of 50 indicates that economic activity is neither expanding nor contracting, above 50 indicates expansion. Guide to the Markets - UK.
4 Data as of 30 June 2023.
Global Purchasing Managers’ Index (PMI) for manufacturing GTM UK 5
Global manufacturing PMI

Global economy
Index level
2023
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 May Jun
Eurozone 44.8 43.4
France 45.7 46.0
Germany 43.2 40.6

Eurozone
Italy 45.9 43.8
Spain 48.4 48.0
Greece 51.5 51.8
Ireland 47.5 47.3
Sweden 40.7 44.8

Developed
Switzerland 43.2 -
UK 47.1 46.2
US 48.4 46.3
Japan 50.6 49.8
China 50.9 50.5
Indonesia 50.3 52.5
Korea 48.4 47.8

Emerging
Taiwan 44.3 44.8
India 58.7 57.8
Brazil 47.1 -
Mexico 50.5 -
South Africa 49.2 -
Source: S&P Global, J.P. Morgan Asset Management. A score of 50 indicates that economic activity is neither expanding nor contracting, above 50 indicates
expansion. The heatmap colours range from red to yellow to green, where red is below 50, yellow is at 50 and green is above 50. Quarterly averages are shown,
5 except the two most recent monthly data points. Guide to the Markets - UK. Data as of 30 June 2023.
Global inflation GTM UK 6
Headline inflation
Global economy
% change year on year

2021 2022 2023
May
May
Aug
Sep
Aug
Sep
Nov
Dec
Nov
Dec
Feb
Feb
Mar
Mar
Jun
Jan
Jun
Jan
Apr
Apr
Oct
Oct
Jul
Jul
Eurozone 1.9 2.2 3.0 3.4 4.1 4.9 5.0 5.1 5.9 7.4 7.4 8.1 8.6 8.9 9.1 9.9 10.6 10.1 9.2 8.6 8.5 6.9 7.0 6.1
France 1.9 1.5 2.4 2.7 3.2 3.4 3.4 3.3 4.2 5.1 5.4 5.8 6.5 6.8 6.6 6.2 7.1 7.1 6.7 7.0 7.3 6.7 6.9 6.0
Eurozone
Germany 2.1 3.1 3.4 4.1 4.6 6.0 5.7 5.1 5.5 7.6 7.8 8.7 8.2 8.5 8.8 10.9 11.6 11.3 9.6 9.2 9.3 7.8 7.6 6.3
Italy 1.3 1.0 2.5 2.9 3.2 3.9 4.2 5.1 6.2 6.8 6.3 7.3 8.5 8.4 9.1 9.4 12.6 12.6 12.3 10.7 9.8 8.1 8.6 8.0
Spain 2.5 2.9 3.3 4.0 5.4 5.5 6.6 6.2 7.6 9.8 8.3 8.5 10.0 10.7 10.5 9.0 7.3 6.7 5.5 5.9 6.0 3.1 3.8 2.9
Greece 0.6 0.7 1.2 1.9 2.8 4.0 4.4 5.5 6.3 8.0 9.1 10.5 11.6 11.3 11.2 12.1 9.5 8.8 7.6 7.3 6.5 5.4 4.5 4.1
Ireland 1.6 2.2 3.0 3.8 5.1 5.4 5.7 5.0 5.7 6.9 7.3 8.3 9.6 9.6 9.0 8.6 9.4 9.0 8.2 7.5 8.1 7.0 6.3 5.4
Sweden 1.8 1.8 2.5 3.0 3.3 3.9 4.5 3.9 4.4 6.3 6.6 7.5 8.9 8.3 9.5 10.3 9.8 10.1 10.8 9.6 9.7 8.1 7.7 6.7
Developed
Switzerland 0.5 0.5 0.8 0.8 1.3 1.5 1.3 1.4 1.9 2.2 2.3 2.7 3.2 3.3 3.3 3.2 2.9 2.9 2.7 3.2 3.2 2.7 2.6 2.2
UK 2.5 2.0 3.2 3.1 4.2 5.1 5.4 5.5 6.2 7.0 9.0 9.1 9.4 10.1 9.9 10.1 11.1 10.7 10.5 10.1 10.4 10.1 8.7 8.7
US 5.4 5.4 5.3 5.4 6.2 6.8 7.0 7.5 7.9 8.5 8.3 8.6 9.1 8.5 8.3 8.2 7.7 7.1 6.5 6.4 6.0 5.0 4.9 4.0
Japan -0.5 -0.3 -0.4 0.2 0.1 0.6 0.8 0.5 0.9 1.2 2.5 2.5 2.4 2.6 3.0 3.0 3.7 3.8 4.0 4.3 3.3 3.2 3.5 3.2
China 1.1 1.0 0.8 0.7 1.5 2.3 1.5 0.9 0.9 1.5 2.1 2.1 2.5 2.7 2.5 2.8 2.1 1.6 1.8 2.1 1.0 0.7 0.1 0.2
Indonesia 1.3 1.5 1.6 1.6 1.7 1.7 1.9 2.2 2.1 2.6 3.5 3.6 4.3 4.9 4.7 6.0 5.7 5.4 5.5 5.3 5.5 5.0 4.3 3.9
Korea 2.3 2.6 2.6 2.4 3.2 3.8 3.7 3.6 3.7 4.1 4.8 5.4 6.0 6.3 5.7 5.6 5.7 5.0 5.0 5.2 4.8 4.2 3.7 3.3
Emerging
Taiwan 1.8 1.9 2.3 2.6 2.5 2.8 2.6 2.8 2.3 3.3 3.4 3.4 3.6 3.4 2.7 2.8 2.7 2.4 2.7 3.1 2.4 2.4 2.3 2.0
India 6.3 5.6 5.3 4.3 4.5 4.9 5.7 6.0 6.1 7.0 7.8 7.0 7.0 6.7 7.0 7.4 6.8 5.9 5.7 6.5 6.4 5.7 4.7 4.3
Brazil 8.3 9.0 9.7 10.2 10.7 10.7 10.1 10.4 10.5 11.3 12.1 11.7 11.9 10.1 8.7 7.2 6.5 5.9 5.8 5.8 5.6 4.7 4.2 3.9
Mexico 5.9 5.8 5.6 6.0 6.2 7.4 7.4 7.1 7.3 7.5 7.7 7.7 8.0 8.2 8.7 8.7 8.4 7.8 7.8 7.9 7.6 6.8 6.3 5.8
South Africa 4.9 4.7 4.9 5.0 5.0 5.4 5.9 5.7 5.7 5.9 5.9 6.5 7.4 7.8 7.6 7.5 7.6 7.4 7.2 6.9 7.0 7.1 6.8 6.3
Source: Bank of Mexico, DGBAS, ECB, Federal Reserve, IBGE, India Ministry of Statistics & Programme Implementation, Japan Ministry of Internal Affairs &
Communication, Korean National Statistical Office, National Bureau of Statistics of China, ONS, Refinitiv Datastream, Riksbank, Statistics Indonesia, Statistics
South Africa, Swiss National Bank, J.P. Morgan Asset Management. Eurozone countries use HICP inflation, all other countries use CPI inflation. Heatmap colours
are based on the respective central bank target inflation rates. Blue is below target, white is at target and red is above target. Guide to the Markets - UK.
Global inflation expectations GTM UK 7
Median of economists’ forecasts for headline CPI Market-based inflation expectations

Global economy
% change year on year, quarterly average %, 5y5y inflation swap

12 4.5
Forecast
4.0
10
3.5
8
3.0
2.5
6
2.0
4
1.5
2 1.0
0.5
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
0.0
2021 2022 2023 '15 '16 '17 '18 '19 '20 '21 '22 '23
US Eurozone UK US Eurozone UK
Source: (Left) Bloomberg, BLS, Eurostat, ONS, J.P. Morgan Asset Management. CPI is consumer price index. (Right) Bloomberg, J.P. Morgan Asset
Management. 5y5y inflation swaps represent the market’s expectation of five-year average inflation, starting in five years’ time. UK inflation swaps use RPI rather
than CPI as the reference point, which partly explains why the UK 5y5y is higher than other regions. Strong demand for index-linked Gilts from defined benefit UK
pension funds also drives the UK 5y5y higher. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
Global inflationary pressures GTM UK 8
Proportion of firms struggling to find workers Core inflation

Global economy
z-score, four-quarter moving average % change year on year

4 8
7
3
6
2
5
1
0
3
-1
2
-2
1
-3 0
'03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
Source: (Left) CBI, DG ECFIN, National Federation of Independent Business, Refinitiv Datastream, J.P. Morgan Asset Management. (Right) BLS, Eurostat, ONS,
Refinitiv Datastream, J.P. Morgan Asset Management. Core inflation excludes food and energy in the US, and food, energy, alcohol and tobacco in the eurozone
8 and the UK. Guide to the Markets - UK. Data as of 30 June 2023.
Global monetary policy GTM UK 9
Market expectations for central bank policy rates Global central bank balance sheets
Global economy
% USD trillions Forecast

7 30
6
25
20
4
3
15
10
1
0 5
-1
+0 +1 +2 +3 +4 +5 0
Years '07 '09 '11 '13 '15 '17 '19 '21 '23
US Eurozone UK Japan
Source: (Left) Bloomberg, J.P. Morgan Asset Management. Expectations are calculated using OIS forwards. (Right) BoE, BoJ, ECB, Fed, Refinitiv Datastream,
J.P. Morgan Asset Management. Global central bank balance sheet is the sum of the balance sheets of the BoE, BoJ, ECB and Fed. Forecast from J.P. Morgan
9 Asset Management. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Global fiscal policy GTM UK 10
Public sector investment Public sector wage growth

Global economy
% change year on year, three-year moving average % change year on year

15 10
Forecast
8
10
5
4
2
0
-5
-2
-10 -4
'01 '04 '07 '10 '13 '16 '19 '22 '25 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
Source: (Left) Deutsche Bundesbank, INE, INSEE, ISTAT, OECD, Refinitiv Datastream, J.P. Morgan Asset Management. Chart shows a smoothed measure of
government gross fixed capital formation. Forecast is OECD. Eurozone is GDP-weighted average of France, Germany, Italy and Spain. (Right) BLS, Eurostat,
10 ONS, Refinitiv Datastream, J.P. Morgan Asset Management. Guide to the Markets - UK. Data as of 30 June 2023.
Global government debt GTM UK 11
Government debt Government interest payments

Global economy
% of nominal GDP % of nominal GDP

140 5.0
Forecast Forecast
4.5
120
4.0
100 3.5
3.0
80
2.5
60
2.0
40 1.5
1.0
20
0.5
0 0.0
'00 '05 '10 '15 '20 '25 '00 '05 '10 '15 '20 '25
Source: (Left) Bank for International Settlements, Eurostat, IMF, Refinitiv Datastream, J.P. Morgan Asset Management. Debt refers to gross debt at face value.
Dotted lines represent the IMF forecasts for government debt to GDP in 2023 and 2024. (Right) OECD, Refinitiv Datastream, J.P. Morgan Asset Management.
2023 is OECD forecast. Eurozone refers to 17 OECD countries in the eurozone, which excludes Croatia, Cyprus and Malta. Guide to the Markets - UK.
Global housing markets GTM UK 12
Home ownership by mortgage status Nominal house prices

Global economy
% of households Index level, rebased to 100 in 2015

80 190
180
70
170
60
160
50
150
40 140
130
30
120
20
110
10
100
0 90
Italy Germany UK Spain France US Sweden '15 '16 '17 '18 '19 '20 '21 '22 '23
Own with mortgage Own outright US Germany UK Sweden Spain
France Italy
Source: (Left) Eurostat, OECD, J.P. Morgan Asset Management. (Right) OECD, J.P. Morgan Asset Management. Guide to the Markets - UK.
Credit quality and capital ratios GTM UK 13
US mortgage origination by credit score Core tier 1 capital ratios

Global economy
USD billions %, regulatory tier 1 capital to risk-weighted assets

1,400 18
17
1,200
16
1,000 15
14
800
13
600
12
400 11
10
200
9
0 8
'04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '09 '11 '13 '15 '17 '19 '21 '23
Subprime Prime Superprime US Europe
Source: (Left) Federal Reserve Bank of New York, Refinitiv Datastream, J.P. Morgan Asset Management. Mortgages are grouped by FICO score. Subprime are
those with FICO scores below 659, prime those between 660 and 759 and superprime those above 760. (Right) Bloomberg, FDIC, IMF, Refinitiv Datastream, J.P.
Morgan Asset Management. Core tier 1 ratios are a measure of banks' financial strength, comparing core tier 1 capital (equity capital and disclosed reserves)
13 against total risk-weighted assets. Europe shows average of France, Germany, Italy, Spain and UK. Guide to the Markets - UK. Data as of 30 June 2023.
Household debt and construction investment GTM UK 14
Household debt Fixed investment in construction

Global economy
% of nominal GDP % of nominal GDP

110 12 22
Recession
100 11 20
90 10 18
80 9 16
70 8 14
60 7 12
50 6 10
40 5 8
30 4 6
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
US UK France Spain US UK France Spain
Source: (Left) BEA, Eurostat, ONS, Refinitiv Datastream, J.P. Morgan Asset Management. (Right) BEA, Haver Analytics, Statistical Office of the European
Communities, J.P. Morgan Asset Management. Periods of “recession” are defined using US National Bureau of Economic Research (NBER) business cycle dates.
14 Guide to the Markets - UK. Data as of 30 June 2023.
US dollar GTM UK 15
USD real effective exchange rate

Global economy
Index level
120
110
100
90
80
70
'65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20
Source: Bank for International Settlements, Refinitiv Datastream, J.P. Morgan Asset Management. Real effective exchange rate is a geometric average of bilateral
exchange rates, adjusted by relative consumer prices. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
Global demographics GTM UK 16
Population split by age: US Population split by age: eurozone

Global economy
Millions of people Millions of people

400 400
300 300
200 200
Forecast Forecast
100 100
0 0
1950 1970 1990 2010 2030 2050 2070 2090 1950 1970 1990 2010 2030 2050 2070 2090
Under 15 15-64 65+ Under 15 15-64 65+
Population split by age: UK Population split by age: China

Millions of people Millions of people
80 1,600
60 1,200
40 800
Forecast Forecast
20 400
0 0
1950 1970 1990 2010 2030 2050 2070 2090 1950 1970 1990 2010 2030 2050 2070 2090
Under 15 15-64 65+ Under 15 15-64 65+
Source: (All charts) United Nations, Refinitiv Datastream, J.P. Morgan Asset Management. Forecast is United Nations. Guide to the Markets - UK.
US GDP GTM UK 17
Contribution to US real GDP growth US real GDP growth and ISM composite
Global economy
% change year on year Index level (LHS); % change year on year (RHS)
15 80 15
10
70 10
5
60 5
50 0
-5
40 -5
-10
-15 30 -10
'12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Real GDP Consumption Government Investment ISM composite Real GDP
Net exports Change in inventories
Source: (All charts) BEA, Bloomberg, ISM, Refinitiv Datastream, J.P. Morgan Asset Management. The Institute for Supply Management (ISM) composite is an
economy-weighted average of the manufacturing and non-manufacturing surveys. A score of 50 indicates that economic activity is neither expanding nor
17 contracting, above 50 indicates expansion. Guide to the Markets - UK. Data as of 30 June 2023.
US Economic Monitor GTM UK 18
US economic indicators
Key:
Global economy
Percentile rank relative to historic data since 1990

Elevated
Broad indicators Consumer and services Manufacturing Labour market recession risk
100
Lower
90 recession risk
80
70
6 months
60 prior
50 Latest
40
30
20
10 Higher
recession risk
0
Conference Conference Consumer ISM non- ISM Non-farm
Board Leading Board Leading confidence: manufacturing manufacturing: payrolls
Economic Credit Index Present New orders
Index situation
Source: BLS, Conference Board, ISM, Refinitiv Datastream, J.P. Morgan Asset Management. Elevated recession risk flags are shown when the underlying
18 indicator is at a level consistent with the onset of any of the three recessions prior to the Covid-19 recession. Guide to the Markets - UK. Data as of 30 June 2023.
US business and residential investment GTM UK 19
US real business investment and future capex intentions US residential and business investment
Global economy
% change year on year (LHS); index level (RHS) % of nominal GDP

15 40 16 8
Recession
10 30
15 7
5 20
14 6
0 10
13 5
-5 0 Average
12 4
-10 -10
11 3
-15 -20
-20 -30 10 2
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20
Business investment Future capex intentions Business investment Residential investment
Source: (Left) BEA, Dallas Fed, Kansas City Fed, New York Fed, Philadelphia Fed, Refinitiv Datastream, Richmond Fed, J.P. Morgan Asset Management. Future
capex intentions is an equally weighted average of the five aforementioned Fed districts’ capex intentions measures, shown as a three-month moving average.
(Right) BEA, Refinitiv Datastream, J.P. Morgan Asset Management. Periods of “recession” are defined using US National Bureau of Economic Research (NBER)
19 business cycle dates. Guide to the Markets - UK. Data as of 30 June 2023.
US consumer GTM UK 20
US household debt to GDP US accumulated excess savings

Global economy
% of nominal GDP USD trillions

120 3.0
100 2.5
80 2.0
60 1.5
40 1.0
20 0.5
0 0.0
'50 '60 '70 '80 '90 '00 '10 '20 '20 '21 '22 '23
Source: (Left) Bank for International Settlements, Refinitiv Datastream, J.P. Morgan Asset Management. (Right) BEA, Refinitiv Datastream, J.P. Morgan Asset
20 Management. Excess savings calculated relative to the Q4 2019 savings rate. Guide to the Markets - UK. Data as of 30 June 2023.
US labour market GTM UK 21
US unemployment and Fed funds rate US job quits and wage growth
Global economy
% %, three-month moving averages, wage growth is year on year

16 3.4 8
Recession
14
12 2.8 6
10
8 2.2 4
4 1.6 2
0 1.0 0
'65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Federal funds rate Unemployment Quits rate Wage growth
Source: (Left) BLS, Federal Reserve, Refinitiv Datastream, J.P. Morgan Asset Management. (Right) BLS, Federal Reserve Bank of Atlanta, Refinitiv Datastream,
J.P. Morgan Asset Management. Wage growth is the Atlanta Fed wage tracker. Periods of “recession” are defined using US National Bureau of Economic
21 Research (NBER) business cycle dates. Guide to the Markets - UK. Data as of 30 June 2023.
US inflation GTM UK 22
US headline inflation breakdown US goods and services inflation

Global economy
% change year on year % change year on year

10 14
9
12
8
10
7
6 8
5
6
4
4
3
2 2
1
0
0
-2
-1
-2 -4
Jan '21 May '21 Sep '21 Jan '22 May '22 Sep '22 Jan '23 May '23 '85 '90 '95 '00 '05 '10 '15 '20
Shelter Core services ex-shelter Core goods ex-autos Services Non-food, non-energy goods
Autos Food Energy Total
22 Source: (All charts) BLS, Refinitiv Datastream, J.P. Morgan Asset Management. Guide to the Markets - UK. Data as of 30 June 2023.
US Federal Reserve policy GTM UK 23
Federal Reserve policy rate expectations US credit conditions

Global economy
% % of banks tightening lending standards

7 100
Recession
6 80
Lending
standards
tightening
5 60
4 40
3 20
Long-run
projection
2 0
1 -20
0 -40
'00 '04 '08 '12 '16 '20 '24 '28 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21
Federal funds rate Federal Reserve median expectations Corporates Consumers
Market expectations on 30 Jun 2023 (mean)
Source: (Left) Bloomberg, BLS, Federal Reserve, J.P. Morgan Asset Management. Market expectations are calculated using OIS forwards. The long-run
projection represents the committee’s median assessment of where the federal funds rate would be expected to converge to under the appropriate monetary
policy and in the absence of further shocks to the economy. Periods of “recession” are defined using US National Bureau of Economic Research (NBER) business
cycle dates. (Right) Federal Reserve, Refinitiv Datastream, J.P. Morgan Asset Management. Data is from the Senior Loan Officer Opinion Survey. Corporates is
the average of large and small firm survey responses. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
US mortgage costs and sensitivity GTM UK 24
US mortgage cost Share of outstanding US mortgages on adjustable rates

Global economy
Payments on a new mortgage as a % of total income %

45 25
40
20
35
30
15
25
20
10
15
10
5
0 0
'81 '84 '87 '90 '93 '96 '99 '02 '05 '08 '11 '14 '17 '20 '23 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Source: (Left) National Association of Realtors, Refinitiv Datastream, J.P. Morgan Asset Management. The calculation is based on the national median-priced,
existing single-family home relative to median family income as reported by the US Census Bureau. (Right) Mortgage Bankers Association of America, Refinitiv
24 Datastream, J.P. Morgan Asset Management. Guide to the Markets - UK. Data as of 30 June 2023.
US housing activity and inventories GTM UK 25
US single-family home sales and housing starts US housing inventories

Global economy
Thousands, seasonally adjusted annualised rate Thousands, seasonally adjusted

1,600 3,200 4,500
Recession
1,400 2,800 4,000
3,500
1,200 2,400
3,000
1,000 2,000
2,500
800 1,600
2,000
600 1,200
1,500
400 800
1,000
200 400 500
0 0 0
'68 '73 '78 '83 '88 '93 '98 '03 '08 '13 '18 '23 '83 '87 '91 '95 '99 '03 '07 '11 '15 '19 '23
New home sales Housing starts
Source: (Left) Census Bureau, Refinitiv Datastream, J.P. Morgan Asset Management. Periods of “recession” are defined using US National Bureau of Economic
Research (NBER) business cycle dates. (Right) Census Bureau, National Association of Realtors, Refinitiv Datastream, J.P. Morgan Asset Management. Housing
25 inventories include new and existing single-family homes for sale. Guide to the Markets - UK. Data as of 30 June 2023.
US focus: Shelter inflation, profits and payrolls GTM UK 26
US house prices and shelter inflation US corporate profits and non-farm payrolls
Global economy

9 35 60 9
Recession
8 30
7 25 40 6
6 20
5 15 20 3
4 10
3 5 0 0
2 0
1 -5 -20 -3
0 -10
-1 -15 -40 -6
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '95 '00 '05 '10 '15 '20
Shelter CPI Case-Shiller home price index, Profits Payrolls
advanced 1 year
Source: (Left) BLS, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. (Right) BEA, BLS, Refinitiv Datastream, J.P. Morgan Asset Management.
Periods of “recession” are defined using US National Bureau of Economic Research (NBER) business cycle dates. Guide to the Markets - UK.
Eurozone GDP GTM UK 27
Contribution to eurozone real GDP growth Eurozone real GDP and composite PMI
Global economy
16 90 16
12 80 12
8 70 8
4 60 4
0 50 0
-4 40 -4
-8 30 -8
-12 20 -12
-16 10 -16
'12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Real GDP Consumption Government Investment Composite PMI Real GDP
Source: (All charts) Eurostat, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. A score of 50 indicates that economic activity is neither
27 expanding nor contracting, above 50 indicates expansion. Guide to the Markets - UK. Data as of 30 June 2023.
Eurozone Economic Monitor GTM UK 28
Eurozone economic indicators

Key:
Global economy
Percentile rank relative to historic data since 1999

Elevated
Financial conditions Consumer and services Manufacturing Labour market recession risk
100
Lower
90 recession risk
80
70
6 months
60 prior
50 Latest
40
30
20
10 Higher
recession risk
0
Bloomberg Consumer Services PMI: Manufacturing Unemployment
financial confidence Business PMI: New
conditions expectations orders
Source: Bloomberg, European Commission, Eurostat, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. Elevated recession risk flags are shown
when the underlying indicator is at a level consistent with eurozone recessions prior to the Covid-19 recession. Guide to the Markets - UK.
Eurozone business investment and credit conditions GTM UK 29
Eurozone real investment and investment confidence Eurozone credit conditions

Global economy
% change year on year (LHS); index level (RHS) % of banks tightening credit standards
25 40 70
Recession
20 30 60
15 20 50
Lending standards
tightening
10 10 40
5 0 30
0 -10 20
-5 -20 10
-10 -30 0
-15 -40 -10
-20 -50 -20

'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Non-residential Investment goods industry Corporates Consumers
investment confidence
Source: (Left) Eurostat, Refinitiv Datastream, J.P. Morgan Asset Management. Non-residential investment is in real terms and includes both public and private
investment. (Right) European Central Bank, Refinitiv Datastream, J.P. Morgan Asset Management. Data is from the Euro Area Bank Lending Survey.
Eurozone consumer and services activity GTM UK 30
Eurozone consumer confidence and services sector

Global economy
Index level
0 65
Recession
-5 60
-10 55
-15 50
-20 45
-25 40
-30 35
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Consumer confidence Services PMI
Source: Bloomberg, European Commission, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. Guide to the Markets - UK.
Eurozone labour market GTM UK 31
Eurozone unemployment and wage growth

Global economy
%, wage growth is year on year

13 5.4
12 4.7
11 4.0
10 3.3
9 2.6
8 1.9
7 1.2
6 0.5
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Unemployment Wage growth
Source: European Central Bank, Eurostat, Refinitiv Datastream, J.P. Morgan Asset Management. Wage growth is based on negotiated wages.
Eurozone inflation GTM UK 32
Eurozone headline inflation breakdown Eurozone headline and core inflation

Global economy

11 11
10 10
9 9
8 8
7 7
6 6
5 5
4 Headline inflation
4
target
3 3
2 2
1 1
0 0
-1 -1
Jan '21 May '21 Sep '21 Jan '22 May '22 Sep '22 Jan '23 May '23 '07 '09 '11 '13 '15 '17 '19 '21 '23
Core services Core goods Food, alcohol, tobacco Core inflation Headline inflation
Energy Total
Source: (All charts) Eurostat, Refinitiv Datastream, J.P. Morgan Asset Management. Core inflation is defined as headline inflation less energy, food, alcohol and
32 tobacco. Guide to the Markets - UK. Data as of 30 June 2023.
European Central Bank policy GTM UK 33
European Central Bank policy rate expectations European 10-year government bond spreads over Germany
Global economy
% % point spread
4.0 7
Recession
3.5
6
3.0
2.5 5
2.0
4
1.5
3
1.0
0.5 2
0.0
1
-0.5
-1.0 0
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '26 '28 '07 '09 '11 '13 '15 '17 '19 '21 '23
ECB deposit rate Market expectations on 30 Jun 2023 (mean) Italy Spain France
Source: (Left) Bloomberg, European Central Bank, J.P. Morgan Asset Management. Market expectations are calculated using OIS forwards. (Right) Refinitiv
Datastream, J.P. Morgan Asset Management. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
Eurozone focus: Natural gas storage and electricity prices GTM UK 34
EU natural gas inventories EU and UK electricity prices

Global economy
% of capacity EUR/GBP per MWh, 30-day moving average

100 500
90 450
400
80
350
70
300
60
250
50
200
40
150
30
100
20 50
10 0
Jun '21 Oct '21 Feb '22 Jun '22 Oct '22 Feb '23 Jun '23 Jan '21 Jul '21 Jan '22 Jul '22 Jan '23 Jul '23
Range, prior 10 years Actual EU UK
Source: (Left) Bloomberg, Gas Infrastructure Europe, J.P. Morgan Asset Management. (Right) APX UK, Refinitiv Datastream, TTF, J.P. Morgan Asset
Management. UK price is the EPX daily fixing half hour 0730 – 0800 price, EU price is the Netherlands base load first day futures price. Past performance is not a
34 reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
UK GDP GTM UK 35
Contribution to UK real GDP growth UK real GDP and composite PMI

Global economy
30 95 30
20 80 20
10 65 10
0 50 0
-10 35 -10
-20 20 -20
-30 5 -30
'12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Real GDP Consumption Government Investment Composite PMI Real GDP
Source: (All charts) ONS, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. A score of 50 indicates that economic activity is neither expanding
35 nor contracting, above 50 indicates expansion. Guide to the Markets - UK. Data as of 30 June 2023.
UK housing market GTM UK 36
UK mortgage rates UK housing market

Global economy
% Index level (LHS); % change year on year (RHS)

10 70 32
Recession
9
60 24
8
7 50 16
6
40 8
30 0
4
3 20 -8
2
10 -16
1
0 0 -24
'95 '99 '03 '07 '11 '15 '19 '23 '95 '99 '03 '07 '11 '15 '19 '23
2-year fix, 75% loan to value 5-year fix, 75% loan to value RICS sales to stock ratio House prices
Source: (Left) Bank of England, Refinitiv Datastream, J.P. Morgan Asset Management. (Right) Nationwide, Refinitiv Datastream, Royal Institute of Chartered
36 Surveyors (RICS), J.P. Morgan Asset Management. Guide to the Markets - UK. Data as of 30 June 2023.
UK consumer and labour market GTM UK 37
UK consumer confidence and services sector UK unemployment rate and wage growth
Global economy
Index level (LHS); index level, three-month moving average (RHS) %, wage growth is year on year
70 20 12 12
Recession
65 10
60 0 9 8
55 -10
50 -20 6 4
45 -30
40 -40 3 0
35 -50
30 -60 0 -4
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '85 '89 '93 '97 '01 '05 '09 '13 '17 '21
Services PMI Consumer confidence Unemployment Wage growth
Source: (Left) GfK, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. (Right) ONS, Refinitiv Datastream, J.P. Morgan Asset Management. Wage
growth is a three-month moving average of average weekly earnings for the whole economy, including bonuses and arrears. Guide to the Markets - UK.
UK inflation GTM UK 38
UK headline inflation breakdown UK goods and services inflation

Global economy

12 14
11
12
10
10
9
8 8
7 6
6
4
5
4 2
3 0
2
-2
1
-4
0
-1 -6
Jan '21 May '21 Sep '21 Jan '22 May '22 Sep '22 Jan '23 May '23 '89 '94 '99 '04 '09 '14 '19
Core services Core goods Food, alcohol, tobacco Services Non-energy industrial goods
Electricity & gas Liquid fuels Total
38 Source: (All charts) ONS, Refinitiv Datastream, J.P. Morgan Asset Management. Guide to the Markets - UK. Data as of 30 June 2023.
UK Bank of England policy GTM UK 39
Bank of England policy rate expectations UK credit conditions

Global economy
% % of banks tightening credit standards

7 80
Recession
60
6
40
5 Lending standards
tightening
20
4
3
-20
2
-40
1
-60
0 -80
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24 '26 '28 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
BoE base rate Market expectations on 30 Jun 2023 (mean) Corporates Households
Source: (Left) Bank of England, Bloomberg, J.P. Morgan Asset Management. Market expectations are calculated using OIS forwards. (Right) Bank of England,
Refinitiv Datastream, J.P. Morgan Asset Management. Data is from the Bank of England's Credit Conditions Survey. Corporates refers to the average of large,
medium and small firm responses. Households refers to secured credit availability. Past performance is not a reliable indicator of current and future results.
UK focus: Mortgages and labour participation GTM UK 40
UK mortgages exposed to higher rates Labour force participation rates

Global economy
% of mortgage stock, cumulative % of outstanding mortgage debt Index level, rebased to 100 at pre-pandemic peak
100 102
Roll off of 2022 mortgage

90
debt onto new mortgage
101
rates
80
70 100
60
99
50
98
40
30 97
20
96
10
0 95
'22 '23 '24 '25 '26 '27 '18 '19 '20 '21 '22 '23
Floating rate Fixed, 2 years or less Fixed, 3-4 years US Eurozone UK
Fixed, 5 years Cumulative % of outstanding mortgage debt
Source: (Left) Bank of England, J.P. Morgan Asset Management. Mortgages exposed to higher rates are based on internal J.P. Morgan Asset Management
calculations and estimates. The first bar shows the proportion of UK mortgage debt as of Q4 2022 that is either floating rate or with historical fixed rate
agreements. The subsequent bars show the cumulative proportion of this debt that will be exposed to higher interest rates over time. (Right) Eurostat, OECD,
ONS, Refinitiv Datastream, J.P. Morgan Asset Management. Participation rates are for people between the age of 16-64 for the US and UK, and 15-64 for the
40 eurozone. Guide to the Markets - UK. Data as of 30 June 2023.
Japan GDP and inflation GTM UK 41
Japan real GDP and manufacturing PMI Japan inflation

Global economy
Index level (LHS); % change year on year (RHS) % change year on year
80 12 5
4
70 8
60 4
2
50 0 1
0
40 -4
-1
30 -8
-2
20 -12 -3
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '06 '08 '10 '12 '14 '16 '18 '20 '22
Manufacturing PMI Real GDP Core inflation Headline inflation
Source: (Left) Japan Cabinet Office, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. A score of 50 indicates that economic activity is neither
expanding nor contracting, above 50 indicates expansion. (Right) Japan Statistics Bureau, Refinitiv Datastream, J.P. Morgan Asset Management. Core inflation is
41 defined as excluding fresh food and energy, as preferred by the Bank of Japan. Guide to the Markets - UK. Data as of 30 June 2023.
China GDP and business surveys GTM UK 42
Contribution to China real GDP growth China Caixin manufacturing and services PMIs
Global economy
% change year on year Index level

20 60
55
15
50
10
45
40
5
35
0
30
-5 25
'90 '94 '98 '02 '06 '10 '14 '18 '22 '19 '20 '21 '22 '23
GDP growth Consumption Investment Net exports Manufacturing Services
Source: (Left) National Bureau of Statistics of China, Refinitiv Datastream, J.P. Morgan Asset Management. Data for 2023 is the year on year change in year-to-
date GDP. (Right) S&P Global, J.P. Morgan Asset Management. For the PMI indices, a score of 50 indicates that economic activity is neither expanding nor
42 contracting, above 50 indicates expansion. Guide to the Markets - UK. Data as of 30 June 2023.
China inflation and credit dynamics GTM UK 43
China inflation China credit growth and equity performance

Global economy
% change year on year % of nominal GDP (LHS); % change year on year, total return (RHS)
15 36 100
34 80
10
32 60
30 40
5
28 20
0
26 0
24 -20
-5
22 -40
-10 20 -60
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
Producer price inflation Headline inflation Core inflation Credit growth MSCI China
Source: (Left) Bloomberg, Refinitiv Datastream, J.P. Morgan Asset Management. Core inflation excludes food and energy. (Right) Bloomberg, MSCI, People’s
Bank of China, J.P. Morgan Asset Management. Credit growth is the 12-month change in the credit stock to the real economy as a percent of nominal GDP. MSCI
43 China returns shown in USD. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
China real estate GTM UK 44
New residential property prices Household debt to GDP

Global economy
% change year on year %

15 120
100
10
80
5
60
0
40
-5
20
-10 0
'11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 Eurozone China Japan US UK Canada Australia
Source: (Left) National Bureau of Statistics of China, Refinitiv Datastream, J.P. Morgan Asset Management. The index shows the percentage change year on year
in new house prices in 70 medium and large Chinese cities. (Right) BIS, Refinitiv Datastream, J.P. Morgan Asset Management. Guide to the Markets - UK.
Emerging market structural dynamics GTM UK 45
Urbanisation, real GDP per capita and population size Urbanisation rates
Global economy
% of population and USD, bubble size is population % of population

80,000 100
Forecast
70,000 90
USA 80
60,000 AUS
NLD 70
50,000 GBR
GDP per capita
CAN 60
DEU
40,000 HKG
FRA
JPN 50
ITA KOR
30,000
ESP 40
20,000 TUR SAU

30
CHN ARG
10,000 RUS BRA 20
THA ZAF
MEX
IND IDN
0 10
00 20 40 60 80 100
0
-10,000 Urbanisation rate 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Developed markets Emerging markets US China India
Source: (All charts) World Bank, J.P. Morgan Asset Management. Urbanisation rate refers to the proportion of the total population living within an urban area
defined by national statistical offices. Countries are labelled using three-letter International Organisation of Standardisation country codes. Forecasts are from
45 World Bank for 2022 onwards. Guide to the Markets - UK. Data as of 30 June 2023.
Emerging market growth GTM UK 46
Share of global real GDP Estimated change in the “consumer class” by 2030
Global economy
% Millions of people
35 450
400
30
350
25 300
250
20
200
15
150
10 100
50
5
0
0 -50
'70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20 India China Other US Eurozone UK Japan
US Eurozone Japan India China Asia
Source: (Left) Refinitiv Datastream, World Bank, J.P. Morgan Asset Management. (Right) Brookings Institute, J.P. Morgan Asset Management. Change in
“consumer class” is the change in the number of people from 2020 to 2030 living in a household and spending at least USD 11 per day per person. Other Asia
includes Bangladesh, Indonesia, Pakistan, Philippines and Vietnam. Eurozone includes France, Germany, Italy and Spain. Guide to the Markets - UK.
EM focus: Trade dynamics and Chinese economy composition GTM UK 47
Share of US manufacturing imports Share of China GDP

Global economy
% %
30 60
25 50
20 40
15 30
10 20
5 10
0 0
'03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '53 '58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13 '18 '23
Mexico EU Korea, Vietnam & Taiwan Japan Agriculture Manufacturing Services
ASEAN 5 China
Source: (Left) CPB World Trade Monitor, J.P. Morgan Asset Management. ASEAN 5 includes Indonesia, Malaysia, Philippines, Singapore and Thailand. (Right)
47 National Bureau of Statistics of China, Refinitiv Datastream, J.P. Morgan Asset Management. Guide to the Markets - UK. Data as of 30 June 2023.
World equity valuations GTM UK 48
MSCI World forward P/E ratio

x, multiple
28
26
Equities
24
22
20
18
Average: 16.3x
16
14
30 Jun 2023:
17.0x
12
10
8
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Source: IBES, MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. Forward P/E ratio is price to 12-month forward earnings, calculated using IBES
48 earnings estimates. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Regional earnings expectations and equity valuations GTM UK 49
Consensus estimates for global earnings per share growth Global forward P/E ratios
% change year on year x, multiple
25 40
35
20
Equities
30
15
25
10
20
5
15
0
10
-5
5
-10 0
World US Europe UK EM China World US Europe UK EM China
ex-UK ex-UK
2023 2024 Range since 1990 Average since 1990 Current
Source: (Left) FTSE, IBES, MSCI, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. MSCI indices are used for World, Europe ex-UK, EM and
China. UK is FTSE All-Share and US is S&P 500. Earnings data is based on 12-month forward estimates. (Right) IBES, MSCI, Refinitiv Datastream, S&P Global,
J.P. Morgan Asset Management. Forward P/E ratio is price to 12-month forward earnings. MSCI indices are used for all regions/countries (due to data availability),
except for the US, which is represented by the S&P 500. Range and average for China is since 1996, due to data availability. Past performance is not a reliable
49 indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Global equity market correlations with Treasury yields GTM UK 50
Correlation of regions and styles to US 10y Treasury yield Correlation of MSCI ACWI sectors to US 10y Treasury yield
10y correlation of rel. performance with US 10y Treasury yield 10y correlation of sector rel. performance with US 10y Treasury yield
Value Energy
Regions/styles tending to Sectors tending to
outperform MSCI ACWI outperform MSCI ACWI
Small cap Financials
when yields are rising when yields are rising
Equities
Industrials
Japan
Materials
UK
Utilities
Eurozone
Health Care
EM
Cons. Staples
China
Cons. Discr.
Large cap
Real Estate
Sectors tending to
US Regions/styles tending to underperform MSCI
Comm. Services
underperform MSCI ACWI ACWI when yields are
when yields are rising rising
Growth IT
-1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0 -1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0.6 0.8 1.0
Country/region Large/small Value/Growth
Source: (All charts) MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. Correlation of regions and styles is calculated between the six-month change in
US 10-year Treasury yields and the six-month relative performance of each region and style to MSCI All-Country World Index. Correlation of sectors is calculated
between the six-month change in US 10-year Treasury yields and the six-month relative performance of each sector to MSCI All-Country World Index. All indices
used are MSCI. Value and Growth as well as size indices used are for the MSCI All-Country World universe. Past performance is not a reliable indicator of current
50 and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Global equity sector weights GTM UK 51
Global equity sector weights

% of total market cap
30
25
20
Equities
15
10
5
0
IT Health Care Financials Cons. Discr. Industrials Comm. Serv. Cons. Staples Energy Utilities Materials
US Europe ex-UK UK EM
MSCI World Growth and Value sector weights

% of total market cap
40
30
20
10
0
IT Health Care Financials Cons. Discr. Industrials Comm. Serv. Cons. Staples Energy Utilities Materials
MSCI World Growth MSCI World Value
Source: (Top) MSCI, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. Indices are all MSCI, except for US, which is S&P 500. (Bottom) MSCI,
Refinitiv Datastream, J.P. Morgan Asset Management. Real estate is not included in these sector breakdowns due to the small size of the weight in each index.
51 Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Global equity income GTM UK 52
Dividend payout ratios MSCI World earnings and dividend drawdowns

%, three-month moving average % drawdown from rolling 2-year high
80 0
Recession
-10
70
Equities
-20
60
-30
50
-40
40
-50
30
-60
20 -70
'05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
US Europe ex-UK UK EM Earnings drawdowns Dividend drawdowns
Source: (Left) FTSE, MSCI, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. US is S&P 500, UK is FTSE All-Share, MSCI indices used for
Europe ex-UK and EM. Dividend payout ratio shows 12-month trailing dividend per share divided by 12-month trailing earnings per share. (Right) Bloomberg,
MSCI, J.P. Morgan Asset Management. Earnings and dividends are both calculated on a per share basis. Earnings data is last 12 months’ earnings per share.
Periods of “recession” are defined using US National Bureau of Economic Research (NBER) business cycle dates. Past performance is not a reliable indicator of
52 current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Profit margins GTM UK 53
Profit margins US NFIB survey: Prices and wages

%, margins of 12-month trailing earnings relative to sales % of respondents, three-month moving average
14 60
50
Equities
12
40
10
30
8
20
6
10
4 0
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '86 '90 '94 '98 '02 '06 '10 '14 '18 '22
US Europe ex-UK UK % of companies planning to raise prices
% of companies planning to raise wages
Source: (Left) FTSE, MSCI, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. US: S&P 500, Europe ex-UK: MSCI Europe ex-UK, UK: FTSE All-
Share. (Right) National Federation of Independent Business, Refinitiv Datastream, J.P. Morgan Asset Management. Past performance is not a reliable indicator of
Equity market factors GTM UK 54
S&P 500 Quality/S&P 500 relative performance MSCI World Growth and Value forward P/E ratios
Relative total return index level, rebased to 100 in January 1990 x, multiple
160 36
150 32
Equities
Recession
140 28
130 24
120 20
110 16
100 12
90 8
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
Growth Value
Source: (Left) J.P. Morgan Asset Management Quantitative Beta Solutions, S&P Global, J.P. Morgan Asset Management. S&P 500 Quality index is the top
quartile quality stocks in the S&P 500 determined by JPMAM Quantitative Beta Strategies based on measures of profitability, financial risk and earnings quality.
Periods of “recession” are defined using US National Bureau of Economic Research (NBER) business cycle dates. (Right) MSCI, Refinitiv Datastream, J.P.
Morgan Asset Management. Forward P/E ratio is price to 12-month forward earnings, as published by MSCI. Past performance is not a reliable indicator of current
54 and future results. Guide to the Markets - UK. Data as of 30 June 2023.
US earnings GTM UK 55
S&P 500 earnings and performance US inflation and earnings growth

Next 12 months’ earnings per share estimates USD (LHS); index level (RHS) % change year on year
300 5,000 10 80
9 70
8 60
Equities
240 4,000
Country/Region % of revenues 7 50
US 60%
6 40
Asia/Pacific 17%
Europe 14% 5 30
180 3,000
4 20
3 10
120 2,000 2 0
1 -10
0 -20
60 1,000
-1 -30
-2 -40
0 0 -3 -50
'86 '90 '94 '98 '02 '06 '10 '14 '18 '22 '86 '90 '94 '98 '02 '06 '10 '14 '18 '22
S&P 500 forward earnings S&P 500 index level US inflation S&P 500 trailing earnings
Source: (Left) FactSet, IBES, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. Earnings data is based on 12-month forward estimates. (Right)
BLS, IBES, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. Earnings data is last 12 months’ earnings per share. Past performance is not a
US equity valuations GTM UK 56
S&P 500 forward P/E ratio

x, multiple
26
Average
Valuation measure since Latest
24 1990
Shiller CAPE ratio 26.5x 29.6x
Equities
P/B ratio 3.0x 4.3x

22
20
18
Average: 16.3x
16
14
30 Jun 2023:
19.3x
12
10
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Source: IBES, Refinitiv Datastream, Robert Shiller, S&P Global, J.P. Morgan Asset Management. Forward P/E ratio is price to 12-month forward earnings,
calculated using IBES earnings estimates. P/E data may differ from Guide to the Markets - US, which uses FactSet earnings estimates. Shiller cyclically adjusted
P/E (CAPE) is price-to-earnings ratio adjusted using trailing 10-year average inflation-adjusted earnings. P/B ratio is trailing price-to-book ratio. Past performance
56 is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
US valuations and subsequent returns GTM UK 57
S&P 500 forward P/E ratios and subsequent 1-year returns S&P 500 forward P/E ratios and subsequent 10-year returns
%, annualised total return* %, annualised total return*
60 30
40 20
Equities
20 10
0 0
-20 -10
-40 -20
Current level Current level
-60 -30
8x 11x 14x 17x 20x 23x 26x 8x 11x 14x 17x 20x 23x 26x
Source: (All charts) IBES, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. *Dots represent monthly data points since 1988, which is earliest
available. Forward P/E ratio is price to 12-month forward earnings, calculated using IBES earnings estimates. Past performance is not a reliable indicator of
US bull and bear markets GTM UK 58
S&P 500 bull markets, %

700
Duration: 8 months
600
Price return: 24%
500 22 months
50 months 114%
400
86%
Equities
44 months 61 months 149 months 132 months

300
80% 229% 582% 401%
26 months 74 months 60 months
200 32 months
48% 126% 101%
100 74%
0
'58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21
S&P 500 bear markets, %

0
-10
1 month
-20
-34%
8 months
-30 17 months
6 months -22% 21 months
-28% 18 months -27% 3 months -57%
-40
-36% -34% 31 months Max drawdown:
21 months -49% -25%
-50
-48%
-60
'58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21
Source: (All charts) Bloomberg, Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. Charts and labels refer to price return. Past performance is
58 not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Europe earnings and buyback yields GTM UK 59
MSCI Europe ex-UK earnings and performance European and US buyback yields
Next 12 months’ earnings per share estimates, EUR (LHS); index level (RHS) %
180 2,700 5
160 2,400
Equities
4
140 2,100
120 1,800
3
100 1,500
80 1,200
2
60 900
40 Country/Region % of revenues 600

Europe ex-UK 36% 1
US 23%
20 300
Asia/Pacific 21%
UK 8%
0 0 0
'88 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21 '24 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
MSCI Europe ex-UK MSCI Europe ex-UK US Europe
forward earnings index level
Source: (Left) FactSet, IBES, MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. Earnings data is based on 12-month forward estimates. (Right)
Bernstein, Bloomberg, Refinitiv Datastream, J.P. Morgan Asset Management. Buyback yields are the value of total stock buyback announcements over the
previous 12 months as a percentage of Datastream regional index market cap. Past performance is not a reliable indicator of current and future results.
Europe equity valuations GTM UK 60
MSCI Europe ex-UK forward P/E ratio

x, multiple
26
Valuation Average
Latest
measure since 1990
24
CAPE ratio 21.1x 19.5x
Equities
22 P/B ratio 2.0x 2.0x
20
18
16
Average: 14.6x
14
12
10
30 Jun 2023:
13.5x
8
6
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Source: IBES, MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. Forward P/E ratio is price to 12-month forward earnings, calculated using IBES
earnings estimates. Cyclically adjusted P/E (CAPE) is price-to-earnings ratio adjusted using trailing 10-year average inflation-adjusted earnings. P/B ratio is trailing
60 price-to-book ratio. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
UK earnings GTM UK 61
FTSE All-Share earnings and performance FTSE All-Share earnings per share growth
Next 12 months’ earnings per share estimates, GBP (LHS); index level (RHS) % change year on year
450 5,000 60
Country/ % of
Region revenues
50
UK 24%
400 4,500
23%
Equities
US
40
Asia/Pacific 20%
350 Europe ex-UK 17% 4,000 30
20
300 3,500
10
250 3,000
0
200 2,500 -10
-20
150 2,000
-30
100 1,500 -40

'99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
FTSE All-Share FTSE All-Share Sales growth Margin growth Earnings growth
forward earnings index level
Source: (All charts) FactSet, FTSE, IBES, Refinitiv Datastream, J.P. Morgan Asset Management. Earnings data are based on 12-month forward estimates. Margin
growth is the growth rate of earnings per share divided by sales per share. Past performance is not a reliable indicator of current and future results.
UK equity valuations GTM UK 62
UK FTSE All-Share forward P/E ratio

x, multiple
24
22
Equities
20
18
16
Average: 14.0x
14
12
10
8
30 Jun 2023:
10.4x
6
'99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
Source: FTSE, IBES, Refinitiv Datastream, J.P. Morgan Asset Management. Forward P/E ratio is price to 12-month forward earnings, calculated using IBES
62 earnings estimates. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
UK large, mid and small capitalisation equities GTM UK 63
FTSE 100 vs. FTSE 250 forward P/E ratios UK small & mid cap exposure
x, multiple %
26 70
% of revenues from
overseas
24
FTSE 250 61%
60
FTSE 100 79%
Equities
22
20 50
18
40
16
30
14
12 20
10
10
8
6 0
'99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
FTSE 100 FTSE 250 25th – 75th percentile range Average fund manager exposure*
Weight of small & mid cap in FTSE All-Share
Source: (Left) FactSet, FTSE, IBES, Refinitiv Datastream, J.P. Morgan Asset Management. Forward P/E ratio is price to 12-month forward earnings, calculated
using IBES earnings estimates. (Right) Bloomberg, Morningstar, J.P. Morgan Asset Management. *Exposure to small & mid cap companies is the exposure of
63 flexible cap UK funds. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Japan equity market and currency GTM UK 64
TOPIX earnings and performance TOPIX and the yen vs. US dollar
Next 12 months’ earnings per share estimates, JPY (LHS); index level (RHS) Index level (LHS); JPY per USD (RHS)
180 3,000 2,400 70
Country/Region % of revenues
Japan 56%
160 2,700 2,200 80
Asia/Pacific 17%
Equities
US 13%
140 Europe 9% 2,400 2,000 90
120 2,100 1,800 100
100 1,800 1,600 110
80 1,500 1,400 120
60 1,200 1,200 130
40 900 1,000 140
20 600 800 Yen depreciating 150
0 300 600 160

'88 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21 '24 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
TOPIX forward earnings TOPIX index level TOPIX index level USDJPY (inverted)
Source: (Left) FactSet, IBES, Refinitiv Datastream, TOPIX, J.P. Morgan Asset Management. Earnings data are based on 12-month forward estimates. (Right)
Refinitiv Datastream, TOPIX, J.P. Morgan Asset Management. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
Emerging market equity valuations GTM UK 65
MSCI EM price-to-book ratio EM price-to-book ratios by country

x, multiple x, multiple
3.2 7
6
2.8
Equities
5
2.4
2.0
Average: 1.8x 3
1.6
2
1.2
30 Jun 2023: 1
1.6x
0.8 0
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 Brazil China EM India Korea Mexico South Taiwan
Africa
Range since 1996 Average since 1996 Current
Source: (All charts) IBES, MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. All indices are MSCI. Past performance is not a reliable indicator of
China equity price-to-book ratio and drawdowns GTM UK 66
MSCI China price-to-book ratio

x, multiple
6
5
4
Equities
3
2
1
0
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
MSCI China historical drawdowns

% drawdown from local peak, price return in local currency
0
-20
-40
-60
-80
-100
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Source: (All charts) MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. Bottom chart plots all drawdowns of 20% or more from the local peak. Past
66 performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Equity focus: S&P 500 valuations and technology earnings GTM UK 67
Forward P/E ratio of the S&P 500 top 10 vs. the rest MSCI World IT sector and broad index earnings
x, multiple % change year on year, 12-month forward earnings expectations
45 80
Recession
40 60
Equities
35
40
30
20
25
0
20
-20
15
-40
10
5 -60
0 -80
'96 '99 '02 '05 '08 '11 '14 '17 '20 '23 '96 '99 '02 '05 '08 '11 '14 '17 '20 '23
Top 10 Remaining stocks MSCI World Information Technology MSCI World
Source: (Left) FactSet, S&P Global, J.P. Morgan Asset Management. The top 10 stocks are based on the 10 largest index constituents at the start of each month.
(Right) MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. Periods of “recession” are defined using US National Bureau of Economic Research (NBER)
67 business cycle dates. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
World stock market returns GTM UK 68
10-year
2015 2016 2017 2018 2019 2020 2021 2022 Q2 ’23 YTD ann. return
GBP 0.3%
18.2% 33.6% 29.8% 1.6% 26.4% 21.5% 29.9% 5.8% 10.6% 16.0%
FTSE All-
TOPIX S&P 500 Asia ex-Jp S&P 500 S&P 500 Asia ex-Jp S&P 500 S&P 500 S&P 500 S&P 500
Share
Local 12.1% 12.0% 35.9% -4.4% 31.5% 22.7% 28.7% 8.7% 16.9% 12.6%
0.3%
18.3%
7.2% 33.1% 25.8% -6.4% 21.0% 15.0% -4.1% 2.5% 9.7% 9.6%
Equities
FTSE All-
S&P 500 MSCI EM MSCI EM Portfolio Euro ex-UK MSCI EM TOPIX TOPIX Euro ex-UK Portfolio
Share
1.4% 10.1% 31.0% -9.3% 27.5% 19.5% -2.4% 14.4% 13.8% 8.6%
18.3%
5.9% 26.2% 17.0% -8.4% 19.6% 14.7% 17.6% -5.7% 1.0% 6.0% 9.3%
Euro ex-UK Asia ex-Jp Portfolio TOPIX Portfolio S&P 500 Euro ex-UK Portfolio Portfolio TOPIX Euro ex-UK
9.1% 6.4% 21.4% -16.0% 23.2% 18.4% 24.4% -10.3% 4.2% 22.7% 8.1%
19.2%
2.9% 25.4% 16.7% -8.8% 9.6% 14.3% -6.9% 0.6% 5.0% 9.3%
FTSE All-
Portfolio Portfolio Euro ex-UK Asia ex-Jp TOPIX Portfolio Euro ex-UK Euro ex-UK Portfolio TOPIX
Share
1.8% 9.8% 14.5% -12.0% 7.4% 16.4% -12.2% 3.0% 10.5% 10.6%
19.2%
1.0% -0.5% 2.6%

23.4% 15.6% -8.9% 14.6% 8.2% 2.0% -7.8% 7.0%
FTSE All- FTSE All- FTSE All-
TOPIX TOPIX MSCI EM TOPIX Euro ex-UK TOPIX S&P 500 Asia ex-Jp
Share Share Share
0.3% 22.2% -9.7% 18.1% 2.1% 12.7% -18.1% 5.1%
1.0% -0.5% 2.6%
13.1% 6.5%
-3.6% 19.7% -9.1% 14.3% 7.8% -1.3% -9.2% -1.7% -0.6%
FTSE All- FTSE All-
Asia ex-Jp Euro ex-UK Euro ex-UK MSCI EM Portfolio MSCI EM Asia ex-Jp MSCI EM MSCI EM
Share Share
-5.3% 3.2% -10.6% 18.5% 8.4% 0.1% -15.1% 1.8% 5.8%
13.1% 6.5%
16.8% -9.5% -9.8%

-9.7% 11.3% 13.9% -3.6% -9.6% -3.9% -2.4% 4.9%
FTSE All- FTSE All- FTSE All-
MSCI EM S&P 500 Asia ex-Jp Asia ex-Jp MSCI EM Asia ex-Jp Asia ex-Jp MSCI EM
Share Share Share
-5.4% 21.8% 18.2% -2.8% -15.2% -0.1% 4.4% 5.0%
16.8% -9.5% -9.8%
Source: MSCI, Refinitiv Datastream, S&P Global, TOPIX, J.P. Morgan Asset Management. Annualised return covers the period 2013 to 2022 inclusive.
Hypothetical portfolio (for illustrative purposes only and should not be taken as a recommendation): 25% FTSE 100; 25% S&P 500; 15% EM; 15% Euro ex-UK;
10% Asia ex-Japan; 10% TOPIX. All indices are total return. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
Fixed income yields GTM UK 69
Fixed income yields

% Developed market Convertible
Investment-grade bonds High yield bonds Emerging market bonds
government bonds bonds
14
12
10
8
Fixed income
6
Yield at start
of 2022
4
0
Return correlation to MSCI ACWI
-2 -0.1 -0.1 -0.2 0.3 0 0.6 0.6 0.6 0.5 0.6 0.5 0.6 0.8 0.7 0.8 0.8 0.8 0.8 -0.2 0.6 0.4 0.7 0.7 0.7
Duration (years)
4.7 4.5 6.4 7.4 7.2 6.5 6.4 3.3 3.5 4.5 3.5 4.2 4 5.5 8.1 5 4.2 6.8 5.4
Source: Bloomberg, Bloomberg Barclays, ICE BofA, J.P. Morgan Economic Research, Refinitiv Datastream, J.P. Morgan Asset Management. Return correlation to
MSCI All-Country World Index is calculated using monthly total returns since 2008. Indices used are as follows: Euro IG: Bloomberg Barclays Euro-Aggregate –
Corporate; Global IG: Bloomberg Barclays Global Aggregate – Corporate; UK IG: Bloomberg Barclays Sterling Aggregate – Corporate; US IG: Bloomberg
Barclays US Aggregate – Corporate; Convertible bonds: Bloomberg Barclays Global Convertible Rate Sensitive hedged to USD; Euro HY: ICE BofA Euro
Developed Markets Non-Financial High Yield Constrained Index; Global HY: ICE BofA Global High Yield Index; US HY: ICE BofA US High Yield Constrained
Index; EMD corporate: CEMBI Broad Diversified; EMD local: GBI-EM Global Diversified; EMD local – China: JP Morgan GBI-EM Broad Diversified China; EMD
sovereign: EMBI Global Diversified; EMD sov. IG: EMBI Global Diversified IG; EMD sov. HY: EMBI Global Diversified HY. Past performance is not a reliable
Global government bond yields GTM UK 70
Nominal 10-year government bond yields Real global government bond yield
% yield % yield
6 4
5 3
4 2
Fixed income
3 1
2 0
1 -1
0 -2
-1 -3
'02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
US UK Eurozone Japan
Source: (Left) Refinitiv Datastream, J.P. Morgan Asset Management. Eurozone is a GDP-weighted average of the French, German, Italian and Spanish 10-year
government bond yields. (Right) ICE BofA, Refinitiv Datastream, J.P. Morgan Asset Management. Index shown is the ICE BofA Global Inflation-Linked
70 Government Bond index. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
US yield curve GTM UK 71
US yield curve Yield curve inversion and recessions

Basis points, 10-year Treasury yield minus 2-year Treasury yield Number of months from
300
Recession Curve
inversion
Yield to S&P S&P 500 Curve
200 curve 500 peak peak to inversion
inversion before start of to
date recession recession recession
Fixed income
100 Aug ’78 18 0 18
Sep ’80 3 8 11
0
Dec ’88 19 1 20
-100 May ’98 22 12 34
Dec ’05 22 3 25
-200
Median 19 3 20
-300
'77 '82 '87 '92 '97 '02 '07 '12 '17 '22 Average 17 5 22
Source: (Left) Refinitiv Datastream, J.P. Morgan Asset Management. (Right) Refinitiv Datastream, S&P Global, J.P. Morgan Asset Management. Periods of
“recession” are defined using US National Bureau of Economic Research (NBER) business cycle dates. Past performance is not a reliable indicator of current and
71 future results. Guide to the Markets - UK. Data as of 30 June 2023.
Investment-grade bonds GTM UK 72
Investment-grade spreads
%, option-adjusted spread over government bond yields
7
5
Fixed income
0
'01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
US UK Euro
Source: Bloomberg Barclays, Refinitiv Datastream, J.P. Morgan Asset Management. Indices are US inv. grade: Bloomberg Barclays US Aggregate – Corporate;
Euro inv. grade: Bloomberg Barclays Euro Aggregate – Corporate; UK inv. grade: Bloomberg Barclays Sterling Aggregate – Corporate. Past performance is not a
High yield bonds GTM UK 73
US high yield spread and defaults Euro high yield spread and defaults
%, default rate (LHS); %, option-adjusted spread (RHS) %, default rate (LHS); %, option-adjusted spread (RHS)
16 24 20
35 34 25
16 20
12 18
Fixed income
12 15
8 12
8 10
4 6
4 5
0 0 0 0
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Default rate Spread Default rate Spread
Source: (Left) ICE BofA, J.P. Morgan Securities Research, Refinitiv Datastream, J.P. Morgan Asset Management. US HY: ICE BofA US High Yield Constrained.
US HY default rate is defined as the par value percentage of the total market trading at or below 50% of par value and includes any Chapter 11 filing,
prepackaged filing or missed interest payments. (Right) Bloomberg, ICE BofA, J.P. Morgan Securities Research, J.P. Morgan Asset Management. Euro HY: ICE
BofA Euro Developed Markets Non-Financial High Yield Constrained Index. Euro HY defaults occur when bonds are downgraded to C rating. The calculation
universe is based on par value percentage of the EUR and GBP HY Non-Financials Corporate bond universe. Defaults include missed coupon payments,
restructuring and distressed exchanges. 2023 default rate is for the 12 months the last 12 months of available data. Past performance is not a reliable indicator of
Global fixed income spreads GTM UK 74
Fixed income spreads

%, option-adjusted spread
10
8
Fixed income
0
US IG Euro IG UK IG EMD (local sov.) EMD (corp. USD) US HY EMD (USD sov.) Euro HY
Range since 2010 Current spread Average spread since 2010
Source: Bloomberg, Bloomberg Barclays, ICE BofA, J.P. Morgan Economic Research, Refinitiv Datastream, J.P. Morgan Asset Management. Euro IG: Bloomberg
Barclays Euro Agg. – Corporate; US HY: ICE BofA US High Yield Constrained; EM Debt: J.P. Morgan EMBI Global Diversified; Euro HY: ICE BofA Euro
Developed Markets Non-Financial High Yield Constrained; US IG: Bloomberg Barclays US Agg. Corporate – Investment Grade; UK IG: Bloomberg Barclays
Sterling Agg.– Corporates; EMD local: J.P. Morgan GBI-EM Global Diversified; EMD corporate: J.P. Morgan CEMBI Broad Diversified. Past performance is not a
Fixed income focus: Diversification potential GTM UK 75
Historical returns from 10-year govt. bonds during shocks Total return scenarios for US Treasuries
%, total return over the period when stocks were falling %
35 30
30
20
25
Fixed income
10
20
15 0
10
-10
5
0 -20
-5
Tech bubble Global financial Eurozone sov. Covid-19 -30
crisis debt crisis -300bps -200bps -100bps 0bps +100bps +200bps +300bps
Yield change over next 12 months
US Germany UK 2-year 10-year
Source: (Left) Refinitiv Datastream, J.P. Morgan Asset Management. Returns are shown over the period when MSCI World was falling in local currency terms.
Tech bubble: 24 Mar '00 to 21 Sep '01; Global financial crisis: 13 Jul '07 to 9 Mar '09; Eurozone sovereign debt crisis: 18 Feb '11 to 3 Oct '11; Covid-19: 19 Feb '20
to 23 Mar ’20. (Right) Bloomberg, J.P. Morgan Asset Management. Chart indicates the calculated total return achieved by purchasing US Treasuries at the current
yield and selling in 12 months’ time given various changes in yield. For illustrative purposes only. Past performance is not a reliable indicator of current and future
75 results. Guide to the Markets - UK. Data as of 30 June 2023.
Global fixed income returns GTM UK 76
10-year
2015 2016 2017 2018 2019 2020 2021 2022 Q2 ’23 YTD ann. return
GBP 7.0% 40.1% 10.6% 7.1% 11.0% 11.3% 6.3% -0.0% -0.6% 1.0% 7.1%
EM Debt US HY Euro HY US Treas. UK IG Infl Linked US HY US HY EM Debt Euro HY US HY
Local 1.2% 17.5% 6.3% 0.9% 11.0% 11.3% 5.3% -11.2% 2.2% 4.4% 3.9%
6.7% 31.4% 4.9% 3.8% 10.6% 9.1% 3.9% -1.4% -0.9% -0.3% 5.1%
US Treas. EM Debt UK IG US HY EM Debt UK IG Infl Linked US Treas. Euro HY US HY US IG
0.8% 10.2% 4.9% -2.3% 15.0% 9.1% 3.9% -12.5% 1.4% 5.4% 2.0%
5.1% 27.6% 2.3% 3.6% 10.1% 8.9% -0.1% -5.1% -1.2% -1.0% 4.7%
US IG Euro HY Infl Linked US IG US IG UK Gilts US IG US IG US HY UK IG EM Debt
Fixed income
-0.7% 10.2% 2.3% -2.5% 14.5% 8.9% -1.0% -15.8% 1.6% -1.0% 1.6%
2.8% 26.6% 2.0% 1.9% 10.0% 7.9% -0.9% -6.3% -3.0% -1.5% 4.1%
Portfolio US IG UK Gilts Portfolio US HY Euro HY Portfolio Euro HY US IG EM Debt Euro HY
-0.1% 6.1% 2.0% -1.5% 14.4% 2.2% -1.1% -11.3% -0.3% 4.1% 3.2%
0.9% 25.2% 0.7% 1.7% 7.9% 6.5% -0.9% -7.4% -3.4% -2.3% 3.7%
US HY Infl Linked EM Debt EM Debt Portfolio US IG EM Debt EM Debt UK IG Portfolio US Treas.
-4.6% 25.2% 10.3% -4.3% 10.6% 9.9% -1.8% -17.8% -3.4% 0.9% 0.6%
0.7% 23.1% 0.2% 0.5% 7.1% 6.5% -1.4% -12.8% -3.5% -2.3% 3.6%
UK IG Portfolio Portfolio UK Gilts UK Gilts Portfolio US Treas. Portfolio Portfolio US IG Portfolio
0.7% 10.8% 5.0% 0.5% 7.1% 8.0% -2.3% -19.0% -1.9% 3.2% 1.8%
0.5% 20.5% -1.8% -0.3% 6.5% 4.7% -3.0% -19.3% -4.1% -2.9% 2.3%
UK Gilts US Treas. US HY Infl Linked Infl Linked US Treas. Euro HY UK IG US Treas. Infl Linked UK IG
0.5% 1.0% 7.5% -0.3% 6.5% 8.0% 3.4% -19.3% -1.4% -2.9% 2.3%
-1.2% 12.3% -2.8% -2.2% 4.7% 2.8% -3.3% -25.1% -6.0% -3.9% 1.9%
Infl Linked UK IG US IG UK IG Euro HY US HY UK IG UK Gilts UK Gilts US Treas. Infl Linked
-1.2% 12.3% 6.4% -2.2% 10.9% 6.1% -3.3% -25.1% -6.0% 1.6% 1.9%
-3.7% 10.7% -6.5% -3.0% 2.7% 2.0% -5.3% -34.5% -6.9% -3.9% 0.4%
Euro HY UK Gilts US Treas. Euro HY US Treas. EM Debt UK Gilts Infl Linked Infl Linked UK Gilts UK Gilts
1.4% 10.7% 2.3% -4.0% 6.9% 5.3% -5.3% -34.5% -6.9% -3.9% 0.4%
Source: Bloomberg, Bloomberg Barclays, ICE BofA, J.P. Morgan Economic Research, Refinitiv Datastream, J.P. Morgan Asset Management. Euro IG: Bloomberg
Barclays Euro Agg. – Corporate; US HY: ICE BofA US High Yield Constrained; EM Debt: J.P. Morgan EMBI Global Diversified; Euro HY: ICE BofA Euro
Developed Markets Non-Financial High Yield Constrained; US IG: Bloomberg Barclays US Agg. Corporate – Investment Grade; UK IG: Bloomberg Barclays
Sterling Agg.– Corporates; UK Gilts: Bloomberg Barclays Sterling Gilts; US Treasuries: Bloomberg Barclays US Agg. Gov. – Treasury; Infl Linked: ICE BofA UK
Gilt Inflation-Linked Government. Hypothetical portfolio (for illustrative purposes only and should not be taken as a recommendation): 20% UK Gilts; 15% US
Treasuries; 10% Linkers; 15% US IG; 10% UK IG; 10% US HY; 5% Euro HY; 15% EM Debt. Annualised return covers period 2013 to 2022 inclusive. Returns are
unhedged in sterling and local currencies. Past performance is not a reliable indicator of current and future results.
Oil GTM UK 77
WTI crude oil price and US rig count Crude oil production by country
USD per barrel (LHS); number of rigs (RHS) Million barrels per day
160 2,400 20
18
140 2,100
16
120 1,800
14
100 1,500
12
Other assets
80 1,200 10
8
60 900
6
40 600
4
20 300
2
0 0 0
'07 '09 '11 '13 '15 '17 '19 '21 '23 '07 '09 '11 '13 '15 '17 '19 '21 '23
Oil price Oil rigs US Russia Saudi Arabia Iran Venezuela
OPEC (ex-Saudi Arabia, Iran & Venezuela)
Source: (Left) Baker Hughes, Bloomberg, J.P. Morgan Asset Management. (Right) EIA, Refinitiv Datastream, J.P. Morgan Asset Management. Past performance
77 is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Commodities GTM UK 78
Real US 10-year Treasury yield vs. gold Commodity prices

%, inverted (LHS); USD per Troy ounce (RHS) Index level, rebased to 100 in Jan 2007
-1.5 2,100 275
250
-1.0 1,900
225
-0.5 1,700 200
175
0.0 1,500
150
Other assets
125
0.5 1,300
100
1.0 1,100 75
50
1.5 900
25
2.0 700 0
'12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '07 '09 '11 '13 '15 '17 '19 '21 '23
Real 10-year Treasury yield Gold Crude oil Agriculture Industrial metals
Source: (Left) Refinitiv Datastream, J.P. Morgan Asset Management. Real yield is the US 10-year Treasury inflation-protected security yield. (Right) Bloomberg,
J.P. Morgan Asset Management. Industrial metals include aluminium, copper, nickel and zinc. Agriculture includes coffee, corn, soybeans, soybean oil, sugar and
78 wheat. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Volatility and alternative investments GTM UK 79
Macro hedge fund relative performance & volatility Hedge fund style returns during bear markets
Index level (LHS); % change year on year (RHS) % total return
60 80 30
20
50 60
10
40 40 0
-10
Other assets
30 20
-20
20 0 -30
-40
10 -20
0 -40
'01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
VIX Macro hedge fund relative 2000 bear market 2008 bear market 2020 bear market
performance to FTSE All-Share 2022
Source: (Left) CBOE, FTSE, Hedge Fund Research Indices (HFRI), Refinitiv Datastream, J.P. Morgan Asset Management. Macro hedge fund (total return in USD)
relative performance is calculated relative to the FTSE All-Share (total return in GBP). VIX is the implied volatility of S&P 500 Index based on options pricing.
(Right) Hedge Fund Research Indices (HFRI), Refinitiv Datastream, J.P. Morgan Asset Management. 2000 bear market is from 31 March 2000 to 31 October
2002, 2008 bear market is from 31 October 2007 to 28 February 2009, 2020 bear market is from 31 January 2020 to 30 April 2020. Hedge fund strategies are
defined in the HFRI hedge fund strategy classification system. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
Inflation protection and alternative investments GTM UK 80
Global core infrastructure returns Selected public and private market returns in 2022
%, rolling 4-quarter returns from income and capital appreciation %, total return in USD
20
Timber
Infrastructure
US core real estate
15
Direct lending
Europe core real estate
TOPIX
10 Private equity
Hedge funds
Other assets
Global HY
5 MSCI Europe
Global IG
Global government bonds
S&P 500
0
Venture capital
MSCI China
Global inflation-linked
-5
'09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 -25 -20 -15 -10 -5 0 5 10 15
Income Capital appreciation Fixed income Equity Alternative
Source: (Left) MSCI, J.P. Morgan Asset Management. Infrastructure returns represented by the MSCI Global Quarterly Infrastructure Asset Index “low risk” category. Rolling
one-year returns from income and capital appreciation. (Right) Bloomberg, Burgiss, Cliffwater, FactSet, HRFI, MSCI, NCREIF, Refinitiv Datastream, S&P Global, J.P. Morgan
Asset Management. Global government bonds: Bloomberg Global Aggregate – Government; Global inflation-linked: Bloomberg Global Inflation-Linked; Global IG: Bloomberg
Barclays Global Aggregate – Corporate; Global HY: ICE BofA Global High Yield Index; Hedge funds: HRFI Fund Weighted Composite; US core real estate: NCREIF Property
Index – Open End Diversified Core Equity; Europe core real estate: MSCI Global Property Fund Index – Continental Europe; Direct lending: Cliffwater Direct Lending Index;
Global infrastructure: MSCI Global Quarterly Infrastructure Asset Index (equal-weighted blend); Timber: NCREIF Timberland Total Return Index. Private equity and venture
80 capital are time-weighted returns from Burgiss. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Asset return expectations GTM UK 81
2023 Long-Term Capital Market Assumptions expected returns in coming 10-15 years
%, annualised return in GBP
China
Eurozone large cap
Japan
Emerging markets
Asia ex-Japan
UK large cap
Other assets
US large cap
UK investment-grade corporates
UK core real estate
Global infrastructure
UK Gilts
UK inflation-linked Gilts
UK cash
0 1 2 3 4 5 6 7 8 9 10 11
Equity Fixed income Alternatives
Source: 2023 Long-Term Capital Market Assumptions, J.P. Morgan Asset Management. Returns are nominal and in GBP. The projections in the chart above are
based on J.P. Morgan Asset Management’s proprietary long-term capital market assumptions (10-15 years) for returns of major asset classes. The resulting
projections include only the benchmark return associated with the portfolio and do not include alpha from the underlying product strategies within each asset class.
The assumptions are presented for illustrative purposes only. Past performance and forecasts are not reliable indicators of current and future results.
Emissions targets and consumer concerns GTM UK 82
Greenhouse gas emission targets US sales growth

Billion tonnes per year, CO2 equivalent %, annualised growth rate from 2018 - 2022
18 7
Current policy Illustrative path to
forecasts net zero targets
16
6
14
5
12
10 4
8 3
6
2
ESG
1
2
0 0
1990 2000 2010 2020 2030 2040 2050 2060 Products without ESG-related Products with ESG-related claims
China US EU claims
Source: (Left) Climate Action Tracker, J.P. Morgan Asset Management. Current policy forecast is the November 2022 forecast provided by Climate Action Tracker
for China and the EU, and the August 2022 forecast for the US. CO2 equivalent tonnes standardise emissions to allow for comparison between gases. One
equivalent tonne has the same warming effect as one tonne of CO2 over 100 years. (Right) McKinsey & Company, NielsenIQ, J.P. Morgan Asset Management.
82 The study covered 600,000 products representing USD 400 billion in annual retail revenues. Guide to the Markets - UK. Data as of 30 June 2023.
Carbon pricing GTM UK 83
Global emissions covered by carbon pricing initiatives Emissions trading system prices
% of global greenhouse gas emissions USD per tonne of CO2 equivalent
25 120
100
20
80
15
60
10
40
ESG
5
20
0 0
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '15 '16 '17 '18 '19 '20 '21 '22 '23
Other EU ETS Japan carbon tax South Korea ETS EU South Korea China
China ETS
Source: (Left) World Bank, J.P. Morgan Asset Management. ETS is emissions trading system. (Right) International Carbon Action Partnership, J.P. Morgan Asset
Management. China ETS price is the Shanghai ETS price up to July 2021, and the mainland price thereafter. CO2 equivalent tonnes standardise emissions to
allow for comparison between gases. One equivalent tonne has the same warming effect as one tonne of CO2 over 100 years. Guide to the Markets - UK.
Global CO2 emissions by country GTM UK 84
Share of global CO2 emissions by country Global CO2 emissions per capita
%, 2021 Tonnes, 2021
100 16
32 14.9
80 12.1
12
3
5
7
60
8 8.6
8.0
8
13
6.1
40
31
ESG
4
20
1.9
0 0
China US UK & EU India Russia Japan Other US Russia Japan China UK & EU India
Source: (All charts) Gapminder, Global Carbon Project, Our World in Data, United Nations, J.P. Morgan Asset Management. CO2 emissions are from the burning
of fossil fuels for energy and cement production. Emission impact from land use change (such as deforestation) is not included. Guide to the Markets - UK.
Global energy mix and greenhouse gas emissions by sector GTM UK 85
Global energy mix Global net zero Share of global greenhouse gas emissions by sector
% primary energy consumption 2050 forecast % of global greenhouse gas emissions (2016), CO2 equivalent tonnes
100
Agriculture: 18%
90 Energy in
industry: 24%
80
70
60 Wastewater /
landfill: 3%
50 Chemicals /
cement: 5%
40
30
ESG
20
Other Energy in
10 energy: buildings:
15% 18%
0
'70 '80 '90 '00 '10 '20 '30 '40 '50 Energy in transport: 16%
Oil Coal Natural gas Nuclear and hydro Renewables
Source: (Left) BP Energy Outlook 2020, J.P. Morgan Asset Management. Forecast is based on BP’s scenario for global net zero emissions by 2050. (Right)
Climate Watch, Our World in Data, World Resource Institute, J.P. Morgan Asset Management. Greenhouse gas emissions include CO2, methane, nitrous oxide
and fluorinated greenhouse gases. CO2 equivalent tonnes standardise emissions to allow for comparison between gases. One equivalent tonne has the same
85 warming effect as one tonne of CO2 over 100 years. Guide to the Markets - UK. Data as of 30 June 2023.
Global energy transition GTM UK 86
Global investment in clean energy and energy efficiency Mineral content of electric vehicles and conventional cars
USD trillions Kilograms per vehicle
5 250
Forecast based on IEA’s

2050 net zero pathway
4 200
3 150
2 100
ESG
1 50
0 0
2015 2022e 2030e EV Conventional car
Low-carbon energy and carbon capture Energy efficiency Copper Lithium Nickel Manganese
EVs, grids and battery storage Cobalt Graphite
Source: (Left) IEA, J.P. Morgan Asset Management. Data is from the IEA’s World Energy Investment 2022 report. 2030e is based on the IEA’s net zero by 2050
scenario. (Right) IEA, J.P. Morgan Asset Management. Data is from the IEA’s "The Role of Critical Minerals in Clean Energy Transitions" report.
Global energy consumption and renewable capacity GTM UK 87
Global energy mix Change in renewable capacity forecasts, 2022 vs. 2021
% of primary energy consumption (2021) % increase in forecasted expansion over next five years
40
Spain
35
Germany
30
Italy
25
China
20
UK
15
France
ESG
10
US
5
India
0
0 20 40 60 80 100 India UK US Global China EU
Oil Coal Natural gas Nuclear Renewables
Source: (Left) Our World in Data, J.P. Morgan Asset Management. Renewables include hydro, wind, solar and biomass fuels. (Right) IEA, J.P. Morgan Asset
Management. Chart shows percentage increase in forecasted renewables capacity expansion from the IEA’s 2021 Renewables report to the 2022 report.
Droughts and food prices GTM UK 88
Land affected by droughts Food prices

% of global land affected by droughts per year Index level
60 160
1972 Russian
drought
140
50 2010 Russian drought
120
40
100
30 80
60
20
ESG
40
10
20
0 0
'60 '70 '80 '90 '00 '10 '20 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20
1 month 3 months 6 months Nominal Real
Source: (Left) Global Standardised Precipitation-Evapotranspiration Index Database, 2021. Beguería, S et al., The Lancet Countdown on Health and Climate
Change: 2022 Report, J.P. Morgan Asset Management. (Right) Food and Agriculture Organization of the United Nations, J.P. Morgan Asset Management.
ESG and capital markets GTM UK 89
Global green, social and sustainable bond issuance Spread between green and traditional corporate bonds
USD billions Basis points
1,000 2
900 1
800 0
700 -1
600 -2
500 -3
400 -4
300 -5
ESG
200 -6
Green bonds trading at a
100 -7 premium/lower spread
vs. traditional bonds
0 -8
'12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '19 '20 '21 '22 '23
Green bonds Social bonds Sustainable bonds YTD
Source: (Left) Refinitiv Eikon, J.P. Morgan Asset Management. Green bonds have 100% of the net bond proceeds allocated to green projects. Social bond
proceeds have a focus on delivering positive social outcomes. Sustainable bond proceeds are directed to a mix of both green and social projects or if the bond
coupon/characteristics can vary based on achieving predefined sustainability targets. 2023 year-to-date is up to 30 June. (Right) Barclays Research, J.P. Morgan
Asset Management. Data shown is latest available for a Barclays Research custom universe of green and non-green, USD and EUR denominated investment-
grade credits, matched by issuer, currency, seniority and maturity. Spread difference is measured using the option-adjusted spread. Past performance is not a
Life expectancy GTM UK 90
Probability of reaching ages 80 and 90

% probability, persons aged 65, by gender and combined couple
100
92
90
76
80
67
70
60
51
50
40
35
30
24
Investing principles
20
10
0
80 years 90 years
Men Women Couples - at least one lives to specified age
90 Source: ONS 2018-2020 Life Tables, J.P. Morgan Asset Management. Guide to the Markets - UK. Data as of 30 June 2023.
The effect of compounding GTM UK 91
£5,000 invested annually with 5% growth per year £5,000 investment with/without income reinvested
GBP GBP, FTSE All-Share returns
700,000 140,000
£639,000
£118,000
600,000 120,000
500,000 100,000
400,000 80,000
£354,000
300,000 60,000
200,000 40,000
100,000 20,000
£30,000
0 0
25 30 35 40 45 50 55 60 65 '86 '90 '94 '98 '02 '06 '10 '14 '18 '22
Starting at age 25 Starting at age 35 With dividends reinvested Without dividends reinvested
Source: (Left) J.P. Morgan Asset Management. For illustrative purposes only, assumes all income reinvested, actual investments may incur higher or lower growth
rates and charges. (Right) Bloomberg, FTSE, J.P. Morgan Asset Management. Based on FTSE All-Share Index and assumes no charges. Past performance is
91 not a reliable indicator of current and future results. Guide to the Markets - UK. Data as of 30 June 2023.
Cash investments GTM UK 92
Income generated by £100,000 in a three-month bank deposit Effect of 2% inflation on purchasing power of £100,000
GBP GBP, thousands
10,000 100
£100,000
9,000 90
8,000 80
7,000 70
6,000 60
£45,000
5,000 50
4,000 40
3,000 30
2,000 20
1,000 10
0 0
2002 2022 0 5 10 15 20 25 30 35 40
Bank deposit income Income required to beat inflation Years
Source: (Left) ONS, Refinitiv Datastream, J.P. Morgan Asset Management. Data shown are averages over the course of the calendar year.
(Right) J.P. Morgan Asset Management. For illustrative purposes only, assumes no return on cash and an inflation rate of 2%. Past performance is not a reliable
Long-term asset returns GTM UK 93
Total return of £1 in real terms

GBP, log scale for total returns
1,000
Annualised real returns
Equities: £386
1900-2022 2000-2022
Equities 5.0% 0.9%
Bonds 1.1% 0.3%
Cash 0.6% -1.1%
100
Bonds: £4
10
Cash: £2
0
1900 1920 1940 1960 1980 2000 2020
Cash Bonds Equities
Source: Bloomberg, Bloomberg Barclays, Dimson, FactSet, FTSE, J.P. Morgan, Marsh and Staunton ABN AMRO/LBS Global Investment Returns calculated from
the Yearbook 2008, J.P. Morgan Asset Management. Equities: FTSE 100; Bonds: JPMorgan GBP Government Bond Index; Cash: three-month GBP LIBOR (prior
to 2008 cash is short-dated Treasury bills). Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
Annual returns and intra-year declines GTM UK 94
FTSE All-Share intra-year declines vs. calendar-year returns

%; despite average intra-year drops of 15.4% (median 12.3%), annual returns are positive in 25 of 37 years
40
30
30
23 25
22 21 YTD
19 20 18
20 17 17
15 15 14 15
12 13 12
11 9 11 9
10 6 8
4
2 2
-2 -3
0
-4 -4 -3
-10 -4
-6 -6 -7 -7 -8 -6
-9 -10 -8
-9 -10 -11 -10 -10 -12
-12 -12 -12 -12
-14-14 -8 -15 -13
-15
-14
-20 -17 -13
-18 -18 -12 -17
-19 -17
-22
-25 -23
-30 -25
-30 -31 -33
-40 -37 -36
-43
-50
'86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22
Calendar-year return Intra-year decline
Source: FTSE, Refinitiv Datastream, J.P Morgan Asset Management. Returns shown are price returns in GBP. Intra-year decline refers to the largest market fall
from peak to trough within the calendar year. Returns shown are calendar years from 1986 to 2022. Past performance is not a reliable indicator of current and
94 future results. Guide to the Markets - UK. Data as of 30 June 2023.
Asset class risk-return trade-off GTM UK 95
Historic risk vs. return for selected asset classes

%, annualised return 2004 – 2022 in GBP
12
Higher return
10
Global equities
8
Emerging market debt
Compound return
Global high yield bonds
6
Global investment-grade bonds
4
UK Gilts
2
Cash
0
0 2 4 6 8 10 12 14
Volatility Higher risk
Source: Bloomberg Barclays, MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. Volatility is the standard deviation of annual returns since 2004. Cash:
JP Morgan Cash United Kingdom (3M); UK Gilts: Bloomberg Barclays Sterling Gilts; Global investment-grade bonds: Bloomberg Barclays Global Aggregate –
Corporate; Emerging market debt: J.P. Morgan EMBI Global Diversified; Global high yield bonds: ICE BofA Global High Yield; Global equities: MSCI All-Country
World Index (includes developed and emerging markets). Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
S&P 500 and fund flows GTM UK 96
US mutual fund and ETF flows and S&P 500

USD billions, three-month net flows (LHS); index level (RHS)
200 5,000
150 4,375
100 3,750
50 3,125
0 2,500
-50 1,875
-100 1,250
-150 625
Avoid selling at the bottom
-200 0
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23
Three-month net fund flows S&P 500 index level
Source: Investment Company Institute, Refinitiv Datastream, Standard & Poor’s, J.P. Morgan Asset Management. Fund flows are US long-term equity fund flows
with ETF flows included from 2006 onwards. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
25% drawdowns and subsequent returns GTM UK 97
Subsequent 12-month returns after 25% drawdowns

%, S&P 500 total return in USD
70
60
50
40
30
20
10
0
-10
-20
-30
2001 2008 1974 1947 1987 1962 1970 2020
Source: Bloomberg, S&P Global, J.P. Morgan Asset Management. Past performance is not a reliable indicator of current and future results.
US asset returns by holding period GTM UK 98
Range of equity and bond total returns

%, annualised total returns, 1950-present
75
61%
48% 49%
50
30%
25 24% 24%
21%
17% 17% 18%
13% 15%
1% 4% 4%
1% 1%
0
-3% -1%
-3%
-7%
-23%
-25 -24%
-43%
-50 -43%
1-year rolling
1-year 5-year rolling
5-year 10-year rolling
10-year 20-year
20-yearrolling
rolling rolling rolling rolling
Large cap equity Bonds 50/50 portfolio
Source: Bloomberg Barclays, Refinitiv Datastream, S&P Global, Strategas/Ibbotson, J.P. Morgan Asset Management. Large cap equity represents the S&P 500
Composite and Bonds represents the Strategas/Ibbotson US Government Bond Index, the US Long-term Corporate Bond Index until 2000 and the Bloomberg
Barclays US Agg. Corporate – Investment Grade Index from 2000 onwards. Returns shown are per annum and are calculated based on monthly returns from
1950 to latest available and include dividends. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
Asset class returns (GBP) GTM UK 99
10-year
2015 2016 2017 2018 2019 2020 2021 2022 Q2 ’23 YTD ann. return Vol.
EM DM EM DM DM DM
REITs HY bonds Govt bonds REITs Cmdty Cmdty
equities equities equities equities equities equities
8.2% 36.9% 5.8% 41.2% 30.7% 18.8%
25.8% 23.4% 15.0% 4.1% 9.2% 12.8%
DM DM Hedge
EMD Cmdty HY bonds REITs Cmdty Cash Cash REITs REITs
equities equities funds
7.0% 33.3% 2.7% 23.1% 28.3% 0.8% 1.2% 10.1% 18.5%
12.4% 12.9% 7.6%
DM EM EM DM EM
Portfolio IG bonds Portfolio Cash Portfolio Portfolio Portfolio
equities equities equities equities equities
5.6% 2.4% 7.1% 0.0% -0.5% 0.7% 7.0%
5.5% 33.1% 14.3% 23.5% 14.7%
DM
Govt bonds EMD EMD REITs Portfolio IG bonds Portfolio HY bonds EMD HY bonds HY bonds
equities
2.3% 31.4% 0.7% 1.9% 12.6% 7.0% 9.7% -2.3% -0.6% -0.4% 6.3%
11.5%
Hedge EM EM
IG bonds REITs HY bonds EMD EMD Govt bonds Portfolio HY bonds EMD
funds equities equities
2.0% 30.4% 0.6% 1.7% 10.6% 6.1% -4.4% -1.2% 10.9%
4.6% -0.6% 4.9%
Hedge DM Hedge
Cash Cash HY bonds HY bonds HY bonds IG bonds REITs EMD HY bonds
funds equities funds
0.4% 0.9% 9.3% 4.7% 2.3% -6.2% -1.2% -1.5% 10.5%
1.9% 29.0% 4.9%
Hedge EM
HY bonds Portfolio REITs Portfolio IG bonds Cash Govt bonds IG bonds EMD Portfolio
funds equities
1.4% 27.0% -0.2% -0.5% 7.2% 0.1% -7.1% -2.0% 4.7% 8.1%
3.5% -1.7%
Hedge Hedge DM Hedge
Portfolio IG bonds IG bonds EMD EMD REITs IG bonds IG bonds
funds funds equities funds
1.2% 24.4% -0.4% 2.0% -0.9% -2.4% 3.9% 8.1%

-0.9% 4.4% -7.4% -2.3%
Hedge DM EM
Cash Govt bonds Cmdty Cash EMD IG bonds Govt bonds Govt bonds Govt bonds
funds equities equities
0.7% -2.0% 3.5% 0.6% -7.4% -2.7% -4.8% 1.9% 8.0%
22.3% -2.5% -1.3%
EM Hedge EM Hedge Hedge
Govt bonds Cmdty Govt bonds Cmdty IG bonds Govt bonds Cmdty
equities funds equities funds funds
21.3% -5.7% 1.5% -6.1% -2.0% -5.1% 1.7%
-9.7% -3.2% -9.6% -4.9% 6.5%
EM
Cmdty Cash Cmdty Cash REITs Govt bonds REITs Cmdty Cmdty Cash Cash
equities
-20.3% 0.7% -7.1% 1.0% -8.8% -5.7% -15.7% -5.2% -12.8% 0.5% 0.3%
-8.9%
Source: Bloomberg Barclays, FTSE, J.P. Morgan Economic Research, MSCI, Refinitiv Datastream, J.P. Morgan Asset Management. Annualised return and
volatility covers the period from 2013 to 2022. Vol. is the standard deviation of annual returns. Govt bonds: Bloomberg Barclays Global Aggregate Government
Treasuries; HY bonds: ICE BofA Global High Yield; EMD: J.P. Morgan EMBI Global Diversified; IG bonds: Bloomberg Barclays Global Aggregate – Corporates;
Cmdty: Bloomberg Commodity; REITs: FTSE NAREIT All REITS; DM equities: MSCI World; EM equities: MSCI EM; Hedge funds: HFRI Global Hedge Fund
Index; Cash: JP Morgan Cash United Kingdom (3M). Hypothetical portfolio (for illustrative purposes only and should not be taken as a recommendation): 30% DM
equities; 10% EM equities; 15% IG bonds; 12.5% government bonds; 7.5% HY bonds; 5% EMD; 5% commodities; 5% cash; 5% REITs and 5% hedge funds. All
returns are total return, in GBP, and are unhedged. Past performance is not a reliable indicator of current and future results. Guide to the Markets - UK.
J.P. Morgan Asset Management: Risks and disclosures GTM UK
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business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by Unless otherwise stated, all data as of 30 June 2023 or most recently available.
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Global Market Insights Strategy Team GTM UK 2

Americas Europe Asia

Dr. David Kelly, CFA Karen Ward Tai Hui

Global economy Equities ESG

% change year on year Index level

Global manufacturing PMI

Eurozone 44.8 43.4

France 45.7 46.0

Germany 43.2 40.6

Italy 45.9 43.8

Spain 48.4 48.0

Greece 51.5 51.8

Ireland 47.5 47.3

Sweden 40.7 44.8

Japan 50.6 49.8

China 50.9 50.5

Indonesia 50.3 52.5

Korea 48.4 47.8

Taiwan 44.3 44.8

India 58.7 57.8

South Africa 49.2 -

% change year on year

Median of economists’ forecasts for headline CPI Market-based inflation expectations

% change year on year, quarterly average %, 5y5y inflation swap

Proportion of firms struggling to find workers Core inflation

z-score, four-quarter moving average % change year on year

% USD trillions Forecast

Public sector investment Public sector wage growth

% change year on year, three-year moving average % change year on year

Government debt Government interest payments

% of nominal GDP % of nominal GDP

Home ownership by mortgage status Nominal house prices

% of households Index level, rebased to 100 in 2015

US mortgage origination by credit score Core tier 1 capital ratios

USD billions %, regulatory tier 1 capital to risk-weighted assets

Household debt Fixed investment in construction

% of nominal GDP % of nominal GDP

USD real effective exchange rate

Population split by age: US Population split by age: eurozone

Millions of people Millions of people

Population split by age: UK Population split by age: China

Percentile rank relative to historic data since 1990

% change year on year (LHS); index level (RHS) % of nominal GDP

US household debt to GDP US accumulated excess savings

% of nominal GDP USD trillions

% %, three-month moving averages, wage growth is year on year

US headline inflation breakdown US goods and services inflation

% change year on year % change year on year

Federal Reserve policy rate expectations US credit conditions

% % of banks tightening lending standards

US mortgage cost Share of outstanding US mortgages on adjustable rates

Payments on a new mortgage as a % of total income %

US single-family home sales and housing starts US housing inventories

Thousands, seasonally adjusted annualised rate Thousands, seasonally adjusted

1,400 2,800 4,000

200 400 500

% change year on year % change year on year

Eurozone economic indicators

Percentile rank relative to historic data since 1999