locate an office

offices near you

office near you

Economy & Markets

Market Thoughts: Holding the reins tight

May 16, 2023

Recent abrupt market moves, the U.S. economy stuck in a holding pattern, and a bumpy road ahead. Our response: to be even more intentional in our risk taking.

 

Market Thoughts: Holding the reins tight

  • Data dependency is the current approach to monetary policy. The fallacy of ‘no landing’ for the global economy continues to stream from pundits. We’re going to land. It’s a question of when and how hard.
  • The operative market question today is: “Are the flashpoints we’ve seen across the U.S. banking sector idiosyncratic or systemic?” I believe both. The root cause is the pace of rising interest rates.
  • There is a lot being written about whether the U.S. Government will choose to default on its debt. That should never be a question. The tail risk is small, but real.
  • Given market volatility, it’s an environment where we are being very intentional in our risk taking. Volatility can create opportunity. Untethered volatility can do the opposite.


With an ongoing tug of war between recessionists and optimists, some ‘fog of war’ has been lifting. But an all-clear bell isn’t ready to be rung. Macro data is volatile; so are markets. Investors still don’t know enough about what lies ahead. Trends are tough to read in a transitionary environment.

The fear of missing out had modestly crept back into the market narrative. The irony is that sidelined cash may keep a relative floor on how far markets correct. Have fun with family and friends. Ask who’s waiting to buy an equity market selloff. Then toss in “At what level?” My sense is most people will say 5-10% lower. It’s always 5-10% lower.

Range-bound is likely the right way to describe current markets. We’ve been trading the same broad ranges on the S&P 500 for most of this year. Sidelined cash may not let us re-test last October’s low unless something really goes wrong.

. Dogmatically data dependent is how I’d characterize the current approach to monetary policy. That, or “confusion has its cost.” It’s a line from Crosby, Stills & Nash’s song “Helplessly Hoping.” A fitting inflation fighting mantra.

The Federal Reserve (Fed) set itself up for a potential June pause in rate hikes. We’ll see. Their pace of tightening has been faster and more assertive than anything seen since the 1980s, with ten back-to-back hikes totaling 500bps in a little more than one year. We are back to policy rate levels last seen in 2007.

Not only does monetary policy act with a lag, but banks pulling back on credit is an added drag on the global economy, equating to more tightening. If I were sitting at the Fed, I’d hit pause in June. Time is on their side; they’ve done a lot of heavy lifting.

We continue to see inflation in cool down mode, but it’s still too high. Recent U.S. economic data showed wages strong yet coming off the boil. The same can be said more broadly for the labor market. The economy is slowing and in ‘OK’ shape. All of that is good news for the soft landing crowd. But it keeps the Fed keenly aware their fight against inflation is far from over.

Having hiked 25bps in May, the European Central Bank (ECB) left the door wide open for more rate hikes. Like the Fed, they have forcefully increased interest rates (Figure 1). The ECB has hiked 375bps in about a year. We are back to levels last seen in 2008. 

Figure 1: The Fed and ECB have aggressively increased policy rates

Source: National Central Banks, Haver Analytics. Data as of May 2023.
Line chart as of May 2023 showing U.S. and euro area central bank policy rates shown in percentage terms on the y-axis with monthly data points since 2003 on the x-axis. A footnote details that for the euro area, the deposit facility rate is shown. Heading into 2005, the U.S. hiked forcefully to 5.3%; while the euro area started hiking in early 2006, reaching a peak rate of 3.3% by 2008. In 2009, policy rates hovered around zero for both regions. The euro area hiked to 0.8% in late 2011 while the U.S. remained steady. U.S. policy rates began to increase in 2016, realizing a peak of 2.4% by July 2019. However, euro area policy rates decreased over this period to -0.5% by late 2019. After hovering around or below zero since early 2020, policy rates have increased in both regions as their central banks aggressively hiked; with the U.S. at 5.1% and euro area 3.3% most recently.

The ECB has a single price stability mandate. The Fed’s dual mandate includes price stability and maximizing employment. If the Fed is on hold for June and the ECB presses on, the euro should retain its recent strength.

The fallacy of ‘no landing’ continues to stream from pundits. For anyone that’s ever ‘enjoyed’ being stuck on a plane in a holding pattern, circling is a better analogy than no landing for the economy. We’re going to land. It’s a question of when and how hard.

To say the past few months have been a whirlwind for markets doesn’t begin to describe it. The operative question today is: “Are the flashpoints we’ve seen across the U.S. banking sector idiosyncratic or systemic?” I believe both.

The root cause—rising interest rates—is systemic. The issues that caused certain banks to fail appear idiosyncratic. But I don’t believe we’re done seeing smaller shocks to the system. I say that because of the pace with which rates have risen.

Investors recognize in a higher interest rate environment that bank balance sheets are liability sensitive. The key question? Whether the headlines and negative price action provoke renewed deposit outflows. That’s the perfect negative feedback loop for short sellers.

For all the bandying about of the word ‘crisis,’ we’re not in bank crisis mode. We’re stuck in a moment of rightful investor concern and banking sector driven stress. What we’re seeing feels more like the Savings & Loans (S&L) crisis in the 1980s than the 2007-2008 global financial crisis (GFC). That’s good and bad news. The S&L crisis proved a ‘slow-bleed’ on the economy. The GFC defined shock and awe.

Actions taken to date by regulators have signaled their willingness to do more, as needed. The moral hazard arguments being made about encouraging bad (or inept) bank management teams taking on risk at the expense of taxpayers is one that regulators and Washington will need to address.

At the start of this year I would have said the risk of recession in the U.S. was about one-third. After events the past few months, it’s a coin toss. If we get a series of added shocks to the banking system, the risk of a hard landing will quickly creep into scope. The macro data simply isn’t showing that currently. That can change.

We’re seeing a slowing global economy. As base case, I’m anchored on a narrow path to soft landing or a shallow recession. But the outlook is cloudy due to rising tail risks. I’m watching credit markets closely. They’ve been bumpy, but so far haven’t shown concern of a hard landing. They are, however, showing signs of modest stress. Credit markets are a dependable canary in the coalmine. So are banks.

Fixed income markets continue their wild ride. That said, risk assets remain supported. Big tech has driven U.S. equity market returns this year. We’re far from all-clear on risk assets. The steepness of the U.S. Government bond yield curve inversion remains dialed to levels not seen in over 40 years (Figure 2). Some of that is technically driven by trend following shorts forced to unwind positions. Some of it is fundamentally driven, based on a hard landing outlook.

Figure 2: U.S. Government bond yield curve remains deeply inverted

Source: Bloomberg Finance LP; monthly data as of April 2023. Shaded areas indicate economic recessions per NBER and dashed line represents average spread over period shown. 
Line chart of the U.S. Government bond yield curve (defined as the U.S. 10 Year Treasury Bond – 3 Month Treasury-Bill yield spread) shown in basis points on the y-axis and displayed with monthly data points since 1981 through April 2023 on the x-axis. As of April 2023, the yield curve displays a deep inversion of -160bps, a level which hasn’t been seen since 1981. The dashed line indicates an average value of 168bps over the time period shown. Inversions were also seen in 1981 (inverted by -160bps), 1989 (-30bps), 2000 (-78bps), 2007 (-56bps) and 2019 (-48bps). Those prior inversions were followed by economic recessions as defined by NBER, which are indicated by shaded areas.

The economy is slowing, as is inflation. Jobs data remains hardy. The U.S. economy doesn’t look like it’s quickly slipping into recession. That’s good news for consumption and revenue growth. So far, it’s been good for corporate margins as well, which remain above historic levels.

I expect S&P 500 margins will continue to move back towards long-term trend levels, about 11% looking back ten years and 10% over the past twenty years. Margins currently hover right around 11.5%. They peaked in the first quarter of 2022 at around 13.5%.

Freight demand continues to trend lower along with supply chain activity. Broad commodity prices continue to roll over as well, especially energy and food. Central banks are getting what they’re after. The question is how much higher policy rates need to go before this tightening cycle ends.

There is a lot being written about whether the U.S. Government will choose to default on its debt. I view a lot of that as headline filler. The debt ceiling will be increased. There is no choice. The question is how long this can be pushed out before markets push back.

To borrow a line from Jay Powell, we shouldn’t be talking about a world where the U.S. doesn’t pay its bills. That said, never is a word I stopped using after the 2007-2008 global financial crisis. Every nation needs to be mindful of its debt load. Debt levels globally are too high, including the U.S. They need serious address, not political theatre.

We are watching events unfold in Washington closely. The tail risk may be small, but it’s real. We’ve already seen U.S. Government credit default swaps (CDS) push out to levels we haven’t seen since 2011-2012. I’m keeping an eye on U.S. CDS as it’s something that shouldn’t move. When it does it reflects investor concern, hedging expected market turbulence ahead.

If things get pushed to the wire and markets truly become unhinged, we would likely be buyers of U.S. Government bonds and risk assets.

Given the abrupt moves we’re seeing, it’s a market environment where we continue to be very intentional in our risk taking. Volatility can create opportunity. Untethered volatility can do the opposite. The volatility we’ve seen over the past year has weighed heavily on animal spirits (Figure 3). There simply isn’t trust in the near-term outlook… it’s going to take time to rebuild.

Figure 3: Markets experienced episodes of high volatility over the past year

Source: Bloomberg Finance LP; daily data as of May 11, 2023.
Line chart of the VIX (left axis) and MOVE (right axis) Indexes shown in level terms on separate y-axes. The time series are displayed since 2017 through May 11th, 2023 on the x-axis; using daily data. From 2017 to early February 2020, the MOVE Index hovered between 40-90. In March of 2020, the VIX and MOVE Index each jumped to very high levels of 83 and 164, respectively. Since then, the VIX Index has generally been within 15-40. On the other hand, the MOVE Index again reached those very high levels in 2022, and remains elevated vs history. It reached an all-time high of 199 over the time period shown in March 2023.

We added earlier this year to European equities, funded from the U.S. I viewed that shift as defensive repositioning, with upside potential. Europe is attractively valued both to its own history as well as relative to the U.S. In a broad market pullback, I expect Europe’s lower valuation to provide better down-capture relative to the U.S. Should the global economy surprise positively, Europe offers an opportunity for further re-rating. It’s already run hard, helping year to date portfolio performance.

We retain a modest overweight in portfolios to extended credit. We’ve been trimming those positions since last year, adding to investment grade credit both in Europe and the U.S. We’ve been de-risking, moving up in credit quality. We’ve also added to longer maturity Government bonds last year as rates pressed higher.

Bonds are playing a key role as risk diversifiers in portfolios. Given the recent pullback in long-term interest rates, we’ve had some active discussions about our duration positioning both in multi-asset as well as fixed income portfolios.

With the outlook murky and markets on edge, we’re holding onto core bond duration. We’re better buyers of credit, especially investment grade (IG), should we see spreads gap out. Both European and U.S. IG aren’t attractive enough to lean further into. They’re on the shopping list.

We have a bumpy ride ahead. We’re not being paid to take big market bets. Recognizing the noise clouding the macro and market landscape, holding the reins tight on risk continues to feel like the right course of action.

 

INDEX DEFINITIONS

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization.

The VIX Index is a calculation designed to produce a measure of constant, 30-day expected volatility of the U.S. stock market, derived from real-time, mid-quote prices of S&P 500® Index call and put options. On a global basis, it is one of the most recognized measures of volatility - widely reported by financial media and closely followed by a variety of market participants as a daily market indicator.

The ICE BofA MOVE Index is a yield curve weighted index of the normalized implied volatility on 1-month Treasury options. It is the weighted average of volatilities on the CT2, CT5, CT10 and CT30 (i.e., weighted average of 1m2y, 1m5y, 1m10y and 1m30y Treasury implied vols with weights of 20%, 20%, 40% and 20%, respectively).

Contact us to discuss how we can help you experience the full possibility of your wealth.

Please tell us about yourself, and our team will contact you. 

*Required Fields

Contact us to discuss how we can help you experience the full possibility of your wealth.

Please tell us about yourself, and our team will contact you. 

Enter your First Name

> or < are not allowed

Only 40 characters allowed

Enter your Last Name

> or < are not allowed

Only 40 characters allowed

Select your country of residence

Enter valid street address

> or < are not allowed

Only 150 characters allowed

Enter your city

> or < are not allowed

Only 35 characters allowed

Select your state

> or < are not allowed

Enter your ZIP code

Please enter a valid zipcode

> or < are not allowed

Only 10 characters allowed

Enter your postal code

Please enter a valid zipcode

> or < are not allowed

Only 10 characters allowed

Enter your phone number

Tell Us More About You

0/1000

Only 1000 characters allowed

> or < are not allowed

Checkbox is not selected

Your Recent History

Important Information

International investments may not be suitable for all investors. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Some overseas markets may not be as politically and economically stable as the United States and other nations. Investments in international markets can be more volatile.​

Bonds are subject to interest rate risk, credit, and default risk of the issuer. Bond prices generally fall when interest rates rise.​

This material is for information purposes only, and may inform you of certain products and services offered by private banking businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information.

GENERAL RISKS & CONSIDERATIONS

Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.

NON-RELIANCE

Certain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/ reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.

Your investments and potential conflicts of interest

Conflicts of interest will arise whenever JPMorgan Chase Bank, N.A. or any of its affiliates (together, “J.P. Morgan”) have an actual or perceived economic or other incentive in its management of our clients’ portfolios to act in a way that benefits J.P. Morgan. Conflicts will result, for example (to the extent the following activities are permitted in your account): (1) when J.P. Morgan invests in an investment product, such as a mutual fund, structured product, separately managed account or hedge fund issued or managed by JPMorgan Chase Bank, N.A. or an affiliate, such as J.P. Morgan Investment Management Inc.; (2) when a J.P. Morgan entity obtains services, including trade execution and trade clearing, from an affiliate; (3) when J.P. Morgan receives payment as a result of purchasing an investment product for a client’s account; or (4) when J.P. Morgan receives payment for providing services (including shareholder servicing, recordkeeping or custody) with respect to investment products purchased for a client’s portfolio. Other conflicts will result because of relationships that J.P. Morgan has with other clients or when J.P. Morgan acts for its own account.

Investment strategies are selected from both J.P. Morgan and third-party asset managers and are subject to a review process by our manager research teams. From this pool of strategies, our portfolio construction teams select those strategies we believe fit our asset allocation goals and forward-looking views in order to meet the portfolio's investment objective.

As a general matter, we prefer J.P. Morgan managed strategies. We expect the proportion of J.P. Morgan managed strategies will be high (in fact, up to 100 percent) in strategies such as, for example, cash and high-quality fixed income, subject to applicable law and any account-specific considerations.

While our internally managed strategies generally align well with our forward-looking views, and we are familiar with the investment processes as well as the risk and compliance philosophy of the firm, it is important to note that J.P. Morgan receives more overall fees when internally managed strategies are included. We offer the option of choosing to exclude J.P. Morgan managed strategies (other than cash and liquidity products) in certain portfolios.

Legal entity, brand & regulatory information

In the United States, bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC.

JPMorgan Chase Bank, N.A. and its affiliates (collectively “JPMCB”) offer investment products, which may include bank managed investment accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC (“JPMS”), a member of FINRA and SIPC. Annuities are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPM. Products not available in all states.

In Germany, this material is issued by J.P. Morgan SE, with its registered office at Taunustor 1 (TaunusTurm), 60310 Frankfurt am Main, Germany, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB). In Luxembourg, this material is issued by J.P. Morgan SE – Luxembourg Branch, with registered office at European Bank and Business Centre, 6 route de Treves, L-2633, Senningerberg, Luxembourg, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Luxembourg Branch is also supervised by the Commission de Surveillance du Secteur Financier (CSSF); registered under R.C.S Luxembourg B255938. In the United Kingdom, this material is issued by J.P. Morgan SE – London Branch, registered office at 25 Bank Street, Canary Wharf, London E14 5JP, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – London Branch is also supervised by the Financial Conduct Authority and Prudential Regulation Authority. In Spain, this material is distributed by J.P. Morgan SE, Sucursal en España, with registered office at Paseo de la Castellana, 31, 28046 Madrid, Spain, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE, Sucursal en España is also supervised by the Spanish Securities Market Commission (CNMV); registered with Bank of Spain as a branch of J.P. Morgan SE under code 1567. In Italy, this material is distributed by 
J.P. Morgan SE – Milan Branch, with its registered office at Via Cordusio, n.3, Milan 20123, Italy, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Milan Branch is also supervised by Bank of Italy and the Commissione Nazionale per le Società e la Borsa (CONSOB); registered with Bank of Italy as a branch of J.P. Morgan SE under code 8076; Milan Chamber of Commerce Registered Number: REA MI 2536325. In the Netherlands, this material is distributed by J.P. Morgan SE – Amsterdam Branch, with registered office at World Trade Centre, Tower B, Strawinskylaan 1135, 1077 XX, Amsterdam, The Netherlands, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Amsterdam Branch is also supervised by De Nederlandsche Bank (DNB) and the Autoriteit Financiële Markten (AFM) in the Netherlands. Registered with the Kamer van Koophandel as a branch of
J.P. Morgan SE under registration number 72610220. In Denmark, this material is distributed by J.P. Morgan SE – Copenhagen Branch, filial af J.P. Morgan SE, Tyskland, with registered office at Kalvebod Brygge 39-41, 1560 København V, Denmark, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Copenhagen Branch, filial af J.P. Morgan SE, Tyskland is also supervised by Finanstilsynet (Danish FSA) and is registered with Finanstilsynet as a branch of J.P. Morgan SE under code 29010. In Sweden, this material is distributed by J.P. Morgan SE – Stockholm Bankfilial, with registered office at Hamngatan 15, Stockholm, 11147, Sweden, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Stockholm Bankfilial is also supervised by Finansinspektionen (Swedish FSA); registered with Finansinspektionen as a branch of J.P. Morgan SE. In France, this material is distributed by JPMorgan Chase Bank, N.A.–Paris Branch, registered office at 14,Place Vendome, Paris 75001, France, registered at the Registry of the Commercial Court of Paris under number 712 041 334 and licensed by the Autorité de contrôle prudentiel et de resolution (ACPR) and supervised by the ACPR and the Autorité des Marchés Financiers. In Switzerland, this material is distributed by J.P. Morgan (Suisse) SA, with registered address at rue du Rhône, 35, 1204, Geneva, Switzerland, which is authorised and supervised by the Swiss Financial Market Supervisory Authority (FINMA) as a bank and a securities dealer in Switzerland.

In Hong Kong, this material is distributed by JPMCB, Hong Kong branch. JPMCB, Hong Kong branch is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission of Hong Kong. In Hong Kong, we will cease to use your personal data for our marketing purposes without charge if you so request. In Singapore, this material is distributed by JPMCB, Singapore branch. JPMCB, Singapore branch is regulated by the Monetary Authority of Singapore. Dealing and advisory services and discretionary investment management services are provided to you by JPMCB, Hong Kong/Singapore branch (as notified to you). Banking and custody services are provided to you by JPMCB Singapore Branch. The contents of this document have not been reviewed by any regulatory authority in Hong Kong, Singapore or any other jurisdictions. You are advised to exercise caution in relation to this document. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. For materials which constitute product advertisement under the Securities and Futures Act and the Financial Advisers Act, this advertisement has not been reviewed by the Monetary Authority of Singapore. JPMorgan Chase Bank, N.A., a national banking association chartered under the laws of the United States, and as a body corporate, its shareholder’s liability is limited.

With respect to countries in Latin America, the distribution of this material may be restricted in certain jurisdictions. We may offer and/or sell to you securities or other financial instruments which may not be registered under, and are not the subject of a public offering under, the securities or other financial regulatory laws of your home country. Such securities or instruments are offered and/or sold to you on a private basis only. Any communication by us to you regarding such securities or instruments, including without limitation the delivery of a prospectus, term sheet or other offering document, is not intended by us as an offer to sell or a solicitation of an offer to buy any securities or instruments in any jurisdiction in which such an offer or a solicitation is unlawful. Furthermore, such securities or instruments may be subject to certain regulatory and/or contractual restrictions on subsequent transfer by you, and you are solely responsible for ascertaining and complying with such restrictions. To the extent this content makes reference to a fund, the Fund may not be publicly offered in any Latin American country, without previous registration of such fund´s securities in compliance with the laws of the corresponding jurisdiction. Public offering of any security, including the shares of the Fund, without previous registration at Brazilian Securities and Exchange Commission–CVM is completely prohibited. Some products or services contained in the materials might not be currently provided by the Brazilian and Mexican platforms.

References to “J.P. Morgan” are to JPM, its subsidiaries and affiliates worldwide. “J.P. Morgan Private Bank” is the brand name for the private banking business conducted by JPM. This material is intended for your personal use and should not be circulated to or used by any other person, or duplicated for non-personal use, without our permission. If you have any questions or no longer wish to receive these communications, please contact your J.P. Morgan team.

JPMorgan Chase Bank, N.A. (JPMCBNA) (ABN 43 074 112 011/AFS Licence No: 238367) is regulated by the Australian Securities and Investment Commission and the Australian Prudential Regulation Authority. Material provided by JPMCBNA in Australia is to “wholesale clients” only. For the purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Corporations Act 2001 (Cth). Please inform us if you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.

JPMS is a registered foreign company (overseas) (ARBN 109293610) incorporated in Delaware, U.S.A. Under Australian financial services licensing requirements, carrying on a financial services business in Australia requires a financial service provider, such as J.P. Morgan Securities LLC (JPMS), to hold an Australian Financial Services Licence (AFSL), unless an exemption applies. JPMS is exempt from the requirement to hold an AFSL under the Corporations Act 2001 (Cth) (Act) in respect of financial services it provides to you, and is regulated by the SEC, FINRA and CFTC under US laws, which differ from Australian laws. Material provided by JPMS in Australia is to “wholesale clients” only. The information provided in this material is not intended to be, and must not be, distributed or passed on, directly or indirectly, to any other class of persons in Australia. For the purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Act. Please inform us immediately if you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.

This material has not been prepared specifically for Australian investors. It:

  • may contain references to dollar amounts which are not Australian dollars;
  • may contain financial information which is not prepared in accordance with Australian law or practices;
  • may not address risks associated with investment in foreign currency denominated investments; and
  • does not address Australian tax issues.

© $$YEAR JPMorgan Chase & Co. All rights reserved.

LEARN MORE About Our Firm and Investment Professionals Through FINRA Brokercheck

To learn more about J.P. Morgan’s investment business, including our accounts, products and services, as well as our relationship with you, please review our J.P. Morgan Securities LLC Form CRS and Guide to Investment Services and Brokerage Products

 

JPMorgan Chase Bank, N.A. and its affiliates (collectively "JPMCB") offer investment products, which may include bank-managed accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC ("JPMS"), a member of FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states. Please read the Legal Disclaimer in conjunction with these pages.

INVESTMENT AND INSURANCE PRODUCTS ARE: • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED

Bank deposit products, such as checking, savings and bank lending and related services are offered by JPMorgan Chase Bank, N.A. Member FDIC. Not a commitment to lend. All extensions of credit are subject to credit approval.