Guide to the Markets Guide to the Markets - Asia - MARKET INSIGHTS - JP Morgan Asset Management

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Guide to the Markets - Asia
          MARKET INSIGHTS

Guide to the Markets
Asia | 2Q 2020 | As of March 31, 2020
Global Market Insights Strategy Team                                                                                         GTM – Asia       | 2

                     Dr. David Kelly, CFA
                     New York

                                            Karen Ward
Samantha Azzarello                          London                          Tilmann Galler, CFA Tai Hui
                                                                                                Hong Kong                   Chaoping Zhu, CFA
New York                                                                    Frankfurt
                                                                                                                            Shanghai

                     David Lebovitz
                     New York
                                            Michael Bell, CFA
Dr. Cecelia Mundt                                                           Maria Paola Toschi   Marcella Chow
                                            London
New York                                                                    Milan                Hong Kong

                                                                                                                                      Yoshinori Shigemi
                     Gabriela Santos                                                                                                  Tokyo
                     New York

                                            Hugh Gimber, CFA
                                            London                                               Ian Hui                Agnes Lin
Alex Dryden, CFA                                                            Vincent Juvyns
                                                                                                 Hong Kong              Taipei
New York                                                                    Luxembourg
                                                                                                                                      Shogo Maekawa
                                                                                                                                      Tokyo
                     John Manley
                     New York
                                            Ambrose Crofton, CFA
                                            London
Meera Pandit, CFA                                                                                Dr. Jasslyn Yeo, CFA
                                                                   Manuel Arroyo Ozores, CFA
New York                                                                                         Singapore
                                                                   Madrid
                                                                                                                        Kerry Craig, CFA
                     Jordan Jackson
                                                                                                                        Melbourne
                     New York               Jai Malhi, CFA
                                            London

Tyler Voigt, CFA
New York
                                                                   Lucia Gutierrez Mellado
                     Jennie Li
                                            Max McKechnie          Madrid
                     New York
                                            London
Page reference                                                                                                             GTM – Asia   | 3
     Regional and local economy                                       Fixed income
    4.    Asia: Economic snapshot                                     47.   Global fixed income: Yields and returns
    5.    ASEAN: Economic snapshot                                    48.   Global fixed income: Return composition
    6.    ASEAN: Monetary and fiscal policy                           49.   Global fixed income: Valuations
    7.    China: Economic snapshot                                    50.   Global fixed income: Bond yields and returns
    8.    China: Cyclical indicators                                  51.   Global fixed income: Negative-yielding debt and bond market size
    9.    China: Policy stimulus timeline                             52.   Global fixed income: Yields and risks
    10.   China: Monetary policy                                      53.   Global fixed income: Interest rate sensitivity
    11.   China: Fiscal policy                                        54.   Global fixed income: U.S. business cycles and yield curve
    12.   China: Credit and leverage                                  55.   U.S. real yields
    13.   China: Exchange rate and foreign reserves                   56.   U.S. investment grade bonds
                                                                      57.   U.S. securitized assets
     Global economy                                                  58.   U.S. high yield bonds
    14.   Global growth                                               59.   Emerging market debt
    15.   Global Purchasing Managers’ Index (PMI)                     60.   China bonds
    16.   Global capital expenditures
    17.   Global supply chains                                         Other asset classes
    18.   Global trade                                                61.   Asset class returns
    19.   Barriers to trade                                           62.   Volatility
    20.   Global inflation                                            63.   Market performance in drawdowns
    21.   Central bank policy rates                                   64.   U.S. dollar
    22.   Central bank balance sheets                                 65.   Currencies
    23.   Eurozone & Japan: Monetary policy                           66.   Emerging market external positions
    24.   Government debt and fiscal balance                          67.   Commodities
    25.   Political calendar                                          68.   Gold
    26.   United States: Election                                     69.   Oil: Short-term market dynamics
    27.   United States: Economic growth and the composition of GDP   70.   Alternative sources of income
    28.   United States: Business cycle thermometer                   71.   Understanding alternatives
    29.   United States: Consumer finances
    30.   United States: Employment and wages                          Investing principles
    31.   United States: Inflation                                    72.   Real return on cash and yields
    32.   United States: Monetary policy                              73.   Annual returns and intra-year declines
    33.   Eurozone: Economic snapshot                                 74.   Fixed income annual returns and intra-year declines
                                                                      75.   The compounding effect
     Equities                                                        76.   Portfolio construction, asset class returns and volatility
    34.   Global and Asia equity market returns                       77.   The benefits of diversification and long-term investing
    35.   Global equities: Return composition
    36.   Global equities: Profit margins
    37.   Global equities: Earnings expectations
    38.   Global equities: Valuations
    39.   Global equities: High dividend
    40.   Global equities: Growth versus value
    41.   Emerging market equities: Performance drivers
    42.   APAC ex-Japan equities: Exports & earnings
    43.   Korea & Taiwan: Exports & earnings
    44.   China: Equities snapshot
    45.   United States: Earnings and sector valuations
    46.   United States: Bear markets and subsequent bull returns
3
Asia: Economic snapshot                                                                                                                             GTM – Asia       | 4
                 EM Asia ex-China* manufacturing PMI and real GDP growth                                          EM Asia ex-China* investment and exports
local economy

                 Index                                                           Year-over-year change            Year-over-year change, 3-month moving average
 Regional and

                  60                                                                                      12%      30%
                             Manufacturing PMI                                    GDP growth

                  58
                                                                                                          10%
                                                                                                                   20%
                  56
                                                                                                          8%
                  54                                                                                                                                                      Nominal investment
                                                                                                                   10%
                                                                                                          6%
                  52

                  50                                                                                      4%        0%

                  48
                                                                                                          2%
                                                                                                                  -10%
                  46
                                                                                                                                       Export volumes
                                                                                                          0%
                  44
                                                                                                                  -20%
                                                                                                          -2%
                  42

                  40                                                                                      -4%     -30%
                       '03     '05       '07       '09      '11       '13       '15       '17       '19                  '01     '03      '05     '07      '09      '11         '13   '15   '17     '19
                Source: IHS Markit, J.P. Morgan Economic Research, National Statistics Agencies, J.P. Morgan Asset Management; (Right) Netherlands Bureau of Policy Analysis.
                PMI = Purchasing Managers’ Index. PMIs are relative to 50, which indicates contraction (below 50) or expansion (above 50) of the sector.
                *Emerging Market (EM) Asia ex-China includes Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

      4
ASEAN: Economic snapshot                                                                                                                                GTM – Asia      | 5
                 Exports                                                                                           Consumption growth
local economy

                 Year-over-year change, 6-month moving average                                                     Year-over-year change
 Regional and

                   40%                                                                                             20%

                                                                                                                   15%
                                                                                                                                                                                           Philippines
                   30%                                                       Malaysia
                                                                                                                   10%                                          Vietnam
                                                                                                                                       Malaysia

                                                                                                                     5%
                                                                                          Vietnam
                                                                                                                                                                                           Singapore
                   20%                                                                                               0%
                                                      Philippines
                                                                                                                                                  Thailand                Indonesia
                                                                                                                    -5%
                                                                                             Singapore                 '12                  '14                  '16                 '18             '20

                   10%
                                                                                                                   Current account balance
                                                                                                                   Share of GDP
                                                                                                                    25%
                                                                                                                                                                                      Singapore
                                                                              Thailand                              20%
                    0%
                                                                                                                    15%

                                                                                                                    10%            Philippines                                               Thailand

                  -10%                                                                    Indonesia                  5%                                            Malaysia
                                                                                                                     0%

                                                                                                                     -5%                                                   Vietnam
                                                                                                                                                       Indonesia
                  -20%                                                                                             -10%
                         '12                '14                 '16                 '18                  '20           '12                  '14                  '16                 '18                '20

                Source: FactSet, National Statistics Agencies, J.P. Morgan Asset Management; (Top right) OECD; (Bottom right) Bangko Sentral ng Pilipinas, Bank Indonesia, Bank
                Negara Malaysia, Bank of Thailand, State Bank of Vietnam, Statistics Singapore.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

      5
ASEAN: Monetary and fiscal policy                                                                                                                       GTM – Asia     | 6
                  Central bank policy rates*                                                                          Government deficit or surplus
local economy

                  Per annum                                                                                           Share of GDP
 Regional and

                  7%                                                                                                   3%
                                                                                                                                                                                           Singapore
                                                                                                   Vietnam             2%
                  6%
                                                                                                                       1%

                  5%                                                                                                   0%
                                                                                                                                                    Philippines
                                                                                               Indonesia
                                                                                                                      -1%
                                                                                                                                                                                                    Thailand
                  4%
                                                                                                                      -2%
                                                                                            Philippines
                                                                                                                                                                Indonesia
                                                                                                                      -3%
                  3%

                                                                                                                      -4%                                                                       Malaysia
                                                                                                 Malaysia

                  2%                                                                                                  -5%

                                                                                                                      -6%
                                                                                                                                                                                            Vietnam
                  1%
                                                                                                  Thailand
                                                                                                                      -7%

                  0%                                                                                                  -8%
                       '17                       '18                        '19                       '20                   '10      '11      '12       '13       '14      '15      '16   '17      '18     '19
                Source: Bangko Sentral ng Pilipinas, Bank Indonesia, Bank Negara Malaysia, Bank of Thailand, FactSet, State Bank of Vietnam, J.P. Morgan Asset Management;
                (Right) Bureau of Treasury Philippines, Ministry of Finance Indonesia, Statistics Singapore.
                *The central banks’ policy rates used are: Bank Indonesia 7-day reverse repo rate (Indonesia), overnight policy rate (Malaysia), Bangko Sentral ng Pilipinas overnight
                reverse repurchase facility (Philippines), one-day repurchase rate (Thailand) and Vietnam Base Rate (Vietnam). Singapore is not included as the Monetary Authority of
                Singapore targets the exchange rate of the Singapore dollar, rather than interest rates, to manage monetary policy.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

      6
China: Economic snapshot                                                                                                                                            GTM – Asia              | 7
                 Contribution to real GDP growth                                                                    Caixin/Markit Purchasing Managers’ Indices
local economy

                 Year-over-year change                                                                              Level
 Regional and

                  20%                                                                                               70
                                                                 Gross capital formation (investment)               65
                                                                                                                    60                                            Services
                                                                 Consumption
                                                                                                                    55
                  16%                                            Net exports
                                                                                                                    50
                                                                 GDP                                                45
                                                                                                                                                                             Manufacturing
                                                                                                                    40                                                                                        3/2020: 50.1
                  12%                                                                                               35
                                                                                                                    30
                                                                                                 2019: 6.1%                                                                                                   2/2020: 26.5
                                                                                                                    25
                                                                                                                    20
                   8%                                                                                                    '07     '08     '09     '10     '11    '12    '13     '14    '15     '16      '17     '18    '19    '20

                                                                                                                    Electricity consumption
                   4%                                                                                               Year-to-date, year-over-year change
                                                                                                                    50%

                                                                                                                    40%

                   0%                                                                                               30%

                                                                                                                    20%
                                                                                                                                                                                            Tertiary
                                                                                                                    10%
                   -4%
                                                                                                                      0%
                                                                                                                                                                               Secondary                      2/2020: -3.1%
                                                                                                                    -10%

                   -8%                                                                                              -20%                                                                                         2/2020: -12%
                         '80       '85       '90        '95       '00        '05       '10        '15                      '07     '08     '09     '10    '11    '12    '13     '14    '15      '16     '17     '18    '19    '20

                Source: J.P. Morgan Asset Management; (Left) CEIC, National Bureau of Statistics of China; (Top right) Caixin/Markit, J.P. Morgan Economic Research; (Bottom right)
                CEIC, China Electricity Council.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

      7
China: Cyclical indicators                                                                                                                         GTM – Asia      | 8
                 Retail and online sales                                                                              Fixed asset investment
local economy

                 Year-over-year change, 3-month moving average                                                        Year-to-date, year-over-year change
 Regional and

                  12%                                                                                                 50%
                                                                                          Online sales
                                                                                                               45%    40%
                   8%
                                                                                                                      30%                              Private           State-owned enterprises
                   4%                                                                                          35%
                                                                                                                      20%

                   0%                                                                                                 10%
                                                                                                               25%
                                                                                                                       0%
                   -4%
                                                                                                               15%    -10%
                   -8%                                                                                                                                                                         Total
                                                                                                                      -20%
                               Retail sales
                 -12%                                                                                          5%     -30%
                         '16                  '17               '18                 '19                  '20                 '11    '12      '13       '14       '15   '16    '17     '18    '19         '20

                 Property prices and land sales                                                                       CPI and PPI inflation
                 Year-to-date, year-over-year change                                                                  Year-over-year change
                   30%                                                                                         90%    8%
                                                                                 Land area sold*
                   25%                                                                                         75%    6%
                   20%                                                                                         60%
                                                                                                                      4%                              Headline CPI
                   15%                                                                                         45%
                   10%                                                                                         30%    2%
                                                                                                                                                   Core CPI
                    5%                                                                                         15%    0%
                    0%                                                                                         0%
                                                                                                                      -2%                                                                          PPI
                   -5%                                                                                         -15%
                                                                                                                      -4%
                  -10%                                                                                         -30%
                  -15%          Residential property prices (lagged 12m)                                       -45%   -6%
                         '10     '11    '12         '13   '14   '15   '16     '17         '18   '19      '20                '11    '12       '13       '14       '15   '16    '17     '18    '19         '20

                Source: CEIC, National Bureau of Statistics of China, J.P. Morgan Asset Management.
                CPI = Consumer Price Index; PPI = Producer Price Index.
                *Land area sold is cut off in 2011 to maintain a more reasonable scale, as growth in land area sold exceeded 90% year-over-year.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

      8
China: Policy stimulus timeline                                                                                                                         GTM – Asia   | 9
                 Chinese policy measures
local economy
 Regional and

                         Monetary policy                  Liquidity support to               Loan prime          5bps cut in MLF, LPR and 7-                10bps rate cuts          Targeted RRR
                                                          small and medium-                  rate (LPR)          day reverse repo rates. 5bps               to reverse repo,         cuts of 50bps
                         Fiscal policy                    sized banks                        reform              cut in 14-day reverse repo rate            MLF and LPR              to 100bps

                           2018                1Q 2019                2Q 2019                 3Q 2019                4Q 2019               Jan 2020               Feb 2020             Mar 2020

                   50bps targeted            100bps RRR           RRR cut up to             50bps RRR cut,                           50bps           RMB 800 billion         20bps cut to 7-day
                   RRR cuts;                 cut                  350bps for small          100bps targeted                          RRR cut         re-lending loans        reverse repo rate.
                   200bps overall                                 and medium-               RRR cut and 5bps                                         to SMEs, with           Additional RMB 1 trillion
                   RRR cuts                                       sized banks               drop in LPR rate                                         interest subsidy        re-lending loans to SMEs.

                   RMB 1.95                                                                                                                Social security contribution
                   trillion in local       Local                   Cut in VAT rate       RMB 1 trillion of 2020 special local              waived, tax declaration                 Purchase tax
                   government              government              and firms’            government bond quota allocated                   postponed,                              exemption extended
                   special bonds           bond issuance           social security       early; equity capital requirement*                VAT waiver or cut for small             to end-2022 for new
                   issued                  push                    contributions         loosened to promote investment                    business to May 31                      energy vehicles.

                           2018                 1Q 2019                2Q 2019                3Q 2019                4Q 2019               Jan 2020               Feb 2020             Mar 2020

                   1ppt cut to value-            Special deductibles          Policy support                                          Advance             5G, industrial internet, health care
                   added tax (VAT)               introduced to                for infra-                                              special             infrastructure highlighted in
                   rate; individual              individual income            structure                                               local bond          infrastructure investment plan
                   income tax cut                tax system                   investment*                                             issuance

                Source: Various news sources, J.P. Morgan Asset Management.
                Required Reserve Ratio (RRR), Medium-term Lending Facility (MLF), Loan Prime Rate (LPR), and reserve repo rates are all monetary policy tools. SMEs stand for
                small and medium enterprises.
                *Under the new rules, some of the proceeds from local government special bond issuances can be used as equity capital and this capital can then be leveraged up
                with debt funding from financial institutions to amplify fiscal support for infrastructure investment.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

      9
China: Monetary policy                                                                                                                                         GTM – Asia         | 10
                  Liquidity injection by the PBoC                                                                       Reserve requirement ratio***
local economy
 Regional and

                  RMB billions, net injection                                       RMB billions, net injection          22%
                   2,400                                                                                      600
                                  Open market operation*
                                                                                                                         20%
                                  Monetary policy tools**
                   2,000                                                                                      500        18%                                                               Large banks

                                                                                                                         16%
                   1,600                                                                                      400
                                                                                                                         14%                                  Small- and medium-sized banks
                   1,200                                                                                      300        12%

                                                                                                                         10%
                     800                                                                                      200              '10             '12              '14              '16                '18             '20

                                                                                                                        Key policy rates
                     400                                                                                      100       Per annum
                                                                                                                        7.5%                                                               Loan prime rate (1-year)****

                        0                                                                                     0         6.0%
                                                                                                                                           Lending rate (1-year)
                                                                                                                        4.5%
                    -400                                                                                      -100                      Medium-term lending
                                                                                                                                          facility (1-year)
                                                                                                                        3.0%
                    -800                                                                                      -200                                                    Interbank repo (7-day)
                                                                                                                        1.5%
                                                                                                                                                                Deposit rate (1-year)
                                                                Total, 6-month moving average
                  -1,200                                                                                      -300      0.0%
                            '14        '15          '16          '17          '18          '19          '20                    '15             '16              '17              '18                '19             '20

                Source: CEIC, People’s Bank of China (PBoC), J.P. Morgan Asset Management; (Bottom right) National Interbank Funding Center.
                *Open market operation (OMO) includes reverse repo, repo and central bank bill issuance by the People’s Bank of China.
                **Monetary policy tools include short-term liquidity operations (SLO), standing liquidity facility (SLF), medium-term liquidity facility (MLF) and pledged supplementary
                lending (PSL). ***The PBoC also announced targeted RRR cuts in 2019 and 2020, the actual RRR rates implemented are 100 to 150 bps below the official RRR for
                most banks. ****Starting from August 2019, the PBoC releases a monthly 1-year and 5-year loan prime rate (LPR) based on quotes from 18 banks. For this new
                monthly quote, banks are required to submit them in the form of open market operation rates (especially MLF) plus a margin to the national inter-bank lending center.
                The central bank requests all commercial banks to reference the finalized LPR to price their new lending and use LPR as the benchmark rate in floating rate loan
      10        contracts going forward.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
China: Fiscal policy                                                                                                                                         GTM – Asia        | 11
                  Fiscal revenue and expenditure*                                                                        Fiscal balance
                                                                                                                                balance***
local economy

                  Year-over-year change, 3-month moving average                                                          % of nominal GDP
 Regional and

                   30%                                                                                                      0%
                                                             Fiscal expenditure
                   20%
                                                                                                                                                                                          Budget deficit
                                                                                                                           -2%
                   10%

                    0%                                                                                                     -4%
                                                Fiscal revenue                                                                                                            Actual deficit
                  -10%
                                                                                                                           -6%
                  -20%
                          '14          '15            '16            '17             '18              '19

                                                                                                                           -8%
                  Local government bond issuance**                                                                                                                                Augmented deficit
                  RMB billions
                 1,000
                                Special bonds                                                                            -10%
                   800          General bonds

                   600                                                                                                   -12%

                   400
                                                                                                                         -14%
                   200

                      0                                                                                                  -16%
                          Jan '18    May '18      Sep '18       Jan '19       May '19       Sep '19         Jan '20                 '10     '11     '12     '13     '14     '15     '16     '17    '18     '19   '20
                Source: CEIC, J.P. Morgan Asset Management; (Top and bottom left) Ministry of Finance of China; (Right) Agricultural Development Bank of China, China Development
                Bank, China Trustee Association, People’s Bank of China, Wind. *Fiscal revenue includes taxes, government funds, which are mostly derived from local government
                land sales, and other government revenues. Fiscal expenditure includes government spending of funds raised from taxes, government funds and general bond
                issuance. **A general local government bond is issued to raise funds and offset fiscal deficit so as to maintain the ordinary operation of local government. It is backed by
                the future fiscal revenue of the local government. A special local government bond is issued to support the investment in a specific infrastructure or public project. It is
                backed by the future revenue from the project. ***Actual deficit = fiscal revenue - fiscal expenditure (as shown in top left chart). Budget deficit = actual deficit adjusted
                with the fiscal stability fund. Augmented deficit is an estimate of all the fiscal resources motivated by the government to support economic growth, i.e. fiscal balance plus
      11        investment via local government financing vehicles, policy banks and other channels. 2019 and 2020 are J.P. Morgan Asset Management estimates.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
China: Credit and leverage                                                                                                                                GTM – Asia         | 12
                  Difference between credit* growth and nominal GDP growth
local economy

                  Percentage points, year-over-year change, 3-month moving average
 Regional and

                  30
                                                  Rapid rebound in CPI & PPI
                  25                                                                                                                                                                                     COVID-19
                                                                             Tightening: 125bps
                  20                                                                                         Interbank                                                                                    virus
                                                                             rate hikes, BASEL III
                                                                             adoption                         liquidity               Loosening:                                                         outbreak
                  15                  Loosening:
                                                                                            Loosening:         crunch                 165bps rate                                                         Loosening:
                                      216bps rate cuts,                                                                                              A-share
                                                                                            56bps rate                                cuts, LGFV                                                          RRR cuts
                  10                  4tn stimulus                                                                                                 market crash
                                                                                            cuts, trust                               debt swap***
                   5                                                                                                                                                          Tightening
                                                                                            boom             Tightening: shadow
                                                                                                             banking tightening                        Rate cut
                   0

                  -5                Global Financial Crisis Wenzhou small and medium enterprise (SME) crisis**
                       '07           '08          '09           '10            '11           '12           '13            '14              '15           '16           '17            '18         '19            '20

                  Total social financing                                                                              Chinese credit impulse and global new orders
                  RMB billions                     Year-over-year change, 3-month moving average                      % of nominal GDP, year-over-year change                      Difference from one year ago
                   5,000                                                 Total social financing            200%        20%                                                                                         8
                                   Bank loans +
                                                                                                                                                                     Global composite PMI - New orders
                                   direct financing                                                                    15%                                                                                         6
                   4,000
                                   Off-balance sheet                                                       150%
                                                                                                                       10%                                                                                         4
                   3,000           financing
                                                                                                           100%         5%                                                                                         2
                   2,000                                                                                                0%                                                                                         0
                                                                                                           50%         -5%                                                                                         -2
                   1,000
                                                                                                                      -10%                                                                                         -4
                                                                                                           0%
                        0
                                                                                                                      -15%                                                                                         -6
                                                                                                                                   Credit impulse**** (advanced 6 months)
                  -1,000                                                                                   -50%       -20%                                                                                         -8
                             '15           '16          '17            '18            '19            '20                     '10     '11         '12   '13     '14    '15    '16      '17   '18    '19     '20

                Source: CEIC, People’s Bank of China, J.P. Morgan Asset Management; (Top) China Central Depository & Clearing Co., Shanghai Clearing House; (Bottom right)
                Ministry of Finance of China. Credit growth, and credit impulse, to GDP growth ratio utilize rolling 12-month nominal GDP and credit stock. CPI stands for consumer
                price index and PPI stands for producer price index. *Stock of credit to the real economy, defined as the net total social financing plus government financing.
                **Wenzhou SME crisis refers to the wave of bankruptcies and funding problems faced by a large number of SMEs in Wenzhou in 2011. ***LGFV refers to local
                government financing vehicle. ****Credit impulse measures the year-over-year change of credit flow (net total social financing plus government financing) as a
                percentage of nominal GDP.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
      12
China: Exchange rate and foreign reserves                                                                                                           GTM – Asia   | 13
                 Chinese yuan exchange rate: CFETS CNY* vs. USD                                                  USD / CNY and change in FX reserves
local economy

                 Index, Jan. 2016 = 100
 Regional and

                 106                                                                                              120                                                                                 6.0
                                                                                                                                                                         USD / CNY (inverted)
                              Stronger yuan

                 104                                                                                                90
                                                                                                                                                                                                      6.2
                 102
                                                  USD / CNY                                                         60

                 100                                                                                                                                                                                  6.4
                                                                                                                    30

                   98
                                                                                                                     0                                                                                6.6
                   96

                                                                                                                   -30
                   94                                                                                                                                                                                 6.8

                                                                                                                   -60
                   92

                                                          CFETS CNY index
                                                                                                                                                                                                      7.0
                                                                                                                   -90
                   90
                             Weaker yuan
                                                                                                                            Change in monthly FX reserves (USD billions)
                   88                                                                                            -120                                                                                 7.2
                     '16                 '17                 '18                '19                 '20              '13         '14        '15       '16        '17          '18   '19         '20
                Source: FactSet, J.P. Morgan Asset Management; (Left) China Foreign Exchange Trade Center, J.P. Morgan Economic Research; (Right) People’s Bank of China.
                *CFETS RMB index is the China Foreign Exchange Trade System basket of 24 currencies traded against the Chinese renminbi. Past performance is not a reliable
                indicator of current and future results.
                Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

      13
Global growth                                                                                                    GTM – Asia       | 14
                   Contribution to real GDP growth
                   Year-over-year change                                                                                                     Global
                    5%                                                                                                                       EM ex-China
                                                                                                                                             DM ex-U.S.
                                                                                                                                             U.S.
                    4%
Global economy

                                                                                                                                             China

                    3%

                    2%

                    1%

                    0%

                   -1%

                   -2%

                   -3%
                          '80                    '85                   '90                   '95                    '00        '05   '10              '15
                 Source: World Bank, J.P. Morgan Asset Management. EM stands for emerging markets, DM for developed markets.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   14
Global Purchasing Managers’ Index (PMI)                                                                                                                                             GTM – Asia                          | 15
                   Global manufacturing and services PMI                                                               Global manufacturing PMI breakdown
                   Index

                                                                                                                                                                                          Aug '19
                                                                                                                                                            May '19

                                                                                                                                                                                                                        Nov '19
                                                                                                                                                                      Jun '19

                                                                                                                                                                                                    Sep '19

                                                                                                                                                                                                                                  Dec '19

                                                                                                                                                                                                                                                       Feb '20
                                                                                                                                                  Apr '19

                                                                                                                                                                                                              Oct '19

                                                                                                                                                                                                                                            Jan '20

                                                                                                                                                                                                                                                                 Mar '20
                                                                                                                                                                                Jul '19
                   65

                                                                                                                       Global                                                                                                                         47.1 47.6
                                                         Services
                                                                                                                       DM*                                                                                                                            49.5 46.0
                   60
Global economy

                                                                                                                       EM**                                                                                                                           44.6 49.1
                                                                                                                       U.S. (Markit)                                                                                                                  50.7 48.5
                                                                                                                       U.S. (ISM)                                                                                                                     50.1 49.1
                   55                                                                                                  Euro area                                                                                                                      49.2 44.5
                                                                                                                       Germ any                                                                                                                       48.0 45.4
                                                                                                                       France                                                                                                                         49.8 43.2

                   50                                                                                                  Italy                                                                                                                          48.7 40.3
                                                                                                                       Spain                                                                                                                          50.4 45.7
                                                                                                                       UK                                                                                                                             51.7 47.8
                                                                                                                       Australia                                                                                                                      50.2 49.7
                   45
                                                                                                                       Japan                                                                                                                          47.8 44.8
                                                                                                                       China (Markit)                                                                                                                 40.3 50.1
                                                                                                                       China (NBS)                                                                                                                    35.7 52.0
                   40                                                                                                  Korea                                                                                                                          48.7 44.2
                                                                                                                       Taiw an                                                                                                                        49.9 50.4
                                                                                                                       Indonesia                                                                                                                      51.9 45.3
                   35                          Manufacturing                                                           India                                                                                                                          54.5 51.8
                                                                                                                       Russia                                                                                                                         48.2 47.5
                                                                                                                       Brazil                                                                                                                         52.3 48.4
                                                                                                                       Mexico                                                                                                                         50.0 47.9
                   30
                                                                                                                       # m arkets above 50       13         9         6         3         6         6         6         5         7         7          7         3
                        '99     '01     '03     '05     '07     '09      '11     '13     '15     '17     '19
                 Source: Australian Industry Group, Institute for Supply Management, J.P. Morgan Economic Research, Markit, J.P. Morgan Asset Management.
                 PMIs are relative to 50, which indicates deceleration (below 50) or acceleration (above 50) of the sector. Heatmap colors are based on PMI relative to the 50 level,
                 with green (red) corresponding to acceleration (deceleration). *Developed market includes Australia, Canada, Denmark, Euro area, Japan, New Zealand, Norway,
                 Sweden, Switzerland, UK and U.S. **Emerging market includes Brazil, Chile, China, Colombia, Croatia, Czech Republic, Hong Kong SAR, Hungary, India, Indonesia,
                 Israel, Korea, Malaysia, Mexico, Philippines, Poland, Romania, Russia, Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, Turkey and Vietnam. Japan
                 December 2019 number is a flash estimate.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
   15
Global capital expenditures                                                                                                                    GTM – Asia     | 16
                  Capital goods imports and investment goods output                                                 Global manufacturing PMI - New orders sub-index
                  Index, 7-month lead                                   Year-over-year change, 3MMA                 Index
                   60                                                                                    25%        60
                              Global Mfg. PMI – Investment Goods Output sub-index

                   58                                                                                    20%        58
Global economy

                   56                                                                                               56
                                                                                                         15%
                                                                                                                               Consumer goods
                   54                                                                                               54
                                                                                                         10%

                   52                                                                                               52
                                                                                                         5%
                   50                                                                                               50
                                                                                                         0%
                   48                                                                                               48

                                                                                                         -5%
                   46                                                                                               46

                                                                                                         -10%                                                                     Investment goods
                   44                                                                                               44

                   42                                                                                    -15%       42

                                         Global (ex-China) capital goods imports growth*
                   40                                                                                    -20%       40
                        '11    '12    '13     '14      '15     '16     '17     '18     '19     '20                       '11      '12     '13      '14      '15      '16    '17    '18    '19    '20

                 Source: Factset, J.P. Morgan Economic Research, National Statistics Agencies, J.P. Morgan Asset Management.
                 *The series aggregates monthly capital goods imports growth data of 29 developed and emerging markets, weighted by their nominal gross domestic product.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   16
Global supply chains                                                                                                                                         GTM – Asia    | 17
                   Foreign value added in domestic exports                                                              Supplier delivery times
                   Source of foreign value add in exports as a % of total goods exports*, 2015                          Manufacturing PMI subindex, G4** average
                                                                                                                       56
                   35%          U.S.          Japan           Taiwan           Other
                                                                                                                       53
                                China         Korea           Euro area
                                                                                                                       50
Global economy

                   30%                                                                                                 47

                                                                                                                       44

                                                                                                                       41
                   25%
                                                                                                                       38

                                                                                                                       35
                                                                                                                            '07          '09           '11          '13           '15        '17       '19
                   20%

                                                                                                                       Manufacturing as share of global total
                                                                                                                        30%
                   15%
                                                                                                                                                                          2000     2008     2018
                                                                                                                        25%

                   10%                                                                                                  20%

                                                                                                                        15%

                    5%                                                                                                  10%

                                                                                                                         5%

                    0%                                                                                                   0%
                               U.S.         China          Japan         Korea         Taiwan       Euro area                     U.S.         China         EU        Japan       Korea     Taiwan    ROW

                 Source: J.P. Morgan Asset Management; (Left) OECD Trade in Value Add; (Top right) J.P. Morgan Economics Research, Markit; (Bottom right) United Nations
                 Industrial Development Organization.
                 *Origin country of value-added to goods exported from each country to the world, divided by gross exports from each country. 2015 is the latest year for which country
                 by country data are available.
                 **G4 is defined as the four largest economies: China, Japan, Euro area, United States.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   17
Global trade                                                                                                                                       GTM – Asia       | 18
                  Global trade activity                                                                             Exports as a percentage of GDP – 2018
                  Year-over-year change, 3MMA                                           Index, 4-month lead         Goods share of GDP
                   20%                                                                                      65
                                Global trade volume growth                                                               U.S.            8.1%

                   15%                                                                                                  EU**                  12.4%
                                                                                                            60
Global economy

                                                                                                                       Japan                    14.8%
                   10%                                                                                                                                                                 U.S.
                                                                                                                     Canada                                  26.1%
                                                                                                                                                                                       EU
                                                                                                            55
                                                                                                                                                                                       Japan
                     5%
                                                                                                                        India                11.9%                                     China
                                                                                                                                                                                       Other
                                                                                                            50         Brazil                 13.0%
                     0%
                                                                                                                       China                        18.7%
                    -5%                                                                                               Russia                                 27.1%
                                                                                                            45

                                                                                                                      Mexico                                          36.9%
                   -10%
                                                                                                            40

                   -15%                                                                                             Australia                      17.9%

                                                                                                                       Korea                                         35.2%
                                                                                                            35
                   -20%                                                                                              ASEAN                                                     48.6%

                                                                                New export orders*                   Taiwan                                                         54.9%
                   -25%                                                                                     30
                          '01     '03    '05     '07      '09     '11     '13     '15     '17     '19                           0%                    25%                     50%                75%
                 Source: FactSet, J.P. Morgan Asset Management; (Left) Markit, Netherlands Bureau of Policy Research; (Right) International Monetary Fund.
                 *Series shown is the Global Manufacturing Purchasing Managers’ Index Sub-Index for new export orders.
                 **EU exports as a percentage of GDP exclude intra-EU trade as the European Union is considered one regional economy.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   18
Barriers to trade                                                                                                                                             GTM – Asia             | 19
                   China & U.S. tariffs
                   Weighted average tariff rate on imports from other*                                                                                China tariffs
                   25%                                                                    Third round of Sec. 301 tariffs &                           on imports
                                    U.S.    U.S. steel &
                                                                                          retaliation (U.S. on USD 200B of                             from U.S.
                                    solar   aluminum
                                                                                          imports; China USD 60B)
                   20%              panel & tariffs First round
                                    washing         of Sec. 301                                                                                                           Tariffs placed on
                                    machine             tariffs &                                                                                                         remainder of imports
                   15%
Global economy

                                    tariffs           retaliation
                                                    (USD 34B)
                   10%                                                                                           U.S. tariffs on imports                                                      U.S. & China
                                                                                                                       from China                   U.S. & China                             decrease Sec.
                                                                                              Second round of
                                                                                                                                                    increase Sec.                            301 tariff rates
                     5%                                                                       Sec. 301 tariffs &
                                                                                                                                                    301 tariff rates
                                                                                              retaliation (USD 16B)
                     0%
                      Jan '18                     May '18                      Sep '18                      Jan '19                    May '19                      Sep '19                     Jan '20

                   Non-tariff barriers to trade**                                                                        Effective weighted average tariff rate***
                   Number of measures in effect, 2017                                                                    10%                                           2017
                   6,000
                                                                    Health and safety regulations                                                                      Retaliation for new U.S. tariffs
                                                                                                                           8%                                          U.S. steel & aluminum tariffs
                   5,000                                            Technical barriers
                                                                    Anti-dumping duties                                                                                U.S. tariffs on China in place
                   4,000                                                                                                   6%
                                                                    Countervailing duties                                                                              U.S. threatened tariffs on China
                   3,000
                                                                                                                           4%
                   2,000
                                                                                                                           2%
                   1,000

                       0                                                                                                   0%
                                 U.S.             China              EU              Japan            Mexico                     Brazil    India   China Russia Japan          UK      EU      U.S.   Canada Mexico

                 Source: J.P. Morgan Asset Management; (Top) Chad Bown, China Ministry of Finance, International Trade Center, Peterson Institution for International Economics;
                 (Top and bottom right) Office of the U.S. Trade Representative, U.S. International Trade Commission; (Bottom left) United Nations. *Trade-weighted average tariffs
                 computed from product-level tariff and trade data, weighted by U.S. exports to the world and China's exports to the world in 2017. **Barriers can take the form of
                 health and safety regulations—sanitary production requirements or health and invasive species restrictions; technical barriers—minimum standards or certifications for
                 products sold in a certain country; anti-dumping duties—taxes on imports to prevent other countries offloading excess supply at artificially cheap prices; countervailing
                 duties—taxes on imports to offset subsidies received elsewhere. ***Value of imports-weighted average tariff for 2017, plus additional tariffs from trade actions in 2018
                 or 2019 related to U.S. trade disputes calculated as the additional tariffs collected as a result of each new action as a percent of total imports for that year.
   19            Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
Global inflation                                                                                                                            GTM – Asia      | 20
                  Headline consumer prices
                  Year-over-year change, quarterly
                                                       Below trend                                            Inflation running                                                          Above trend
                                        Legend

                                                              2010   2011        2012            2013            2014            2015            2016            2017            2018        2019      Jan    Feb
Global economy

                    Developed Markets

                                        U.S.                                                                                                                                                           2.5%   2.3%

                                        UK                                                                                                                                                             1.8%   1.7%

                                        Eurozone                                                                                                                                                       1.4%   1.2%

                                        Japan                                                                                                                                                          0.7%   0.5%

                                        Australia                                                                                                                                                      1.8%   1.6%

                                        China                                                                                                                                                          5.4%   5.2%

                                        India                                                                                                                                                          7.6%   6.6%

                                        Korea                                                                                                                                                          1.5%   1.1%
                    EM Asia

                                        Taiwan                                                                                                                                                         1.1%   0.4%

                                        Indonesia                                                                                                                                                      2.7%   3.0%

                                        Malaysia                                                                                                                                                       1.6%   1.3%

                                        Thailand                                                                                                                                                       1.1%   0.7%

                                        Brazil                                                                                                                                                         4.2%   4.0%
                    Other EM

                                        Mexico                                                                                                                                                         3.2%   3.7%

                                        Russia                                                                                                                                                         -2.5% -2.8%

                                        Turkey                                                                                                                                                         12.2% 12.4%

                                        South Africa                                                                                                                                                   4.5%   4.6%

                 Source: Department of Statistics Malaysia, DGBAS, Eurostat, FactSet, Goskomstat of Russia, IBGE, India Ministry of Statistics & Programme Implementation, INEGI,
                 J.P. Morgan Economics Research, Korean National Statistical Office, Melbourne Institute, Ministry of Commerce Thailand, Ministry of Internal Affairs &
                 Communications Japan, National Bureau of Statistics China, Office for National Statistics UK, Statistics Indonesia, Statistics Institute Turkey, Statistics South Africa,
                 U.S. Department of Labor, J.P. Morgan Asset Management. Quarterly averages, with the exception of the two most recent figures, which are single month readings,
                 are shown. Colors are based on z-score of year-over-year inflation rate relative to each country’s own 10-year history where red (blue) indicates inflation above (below)
                 long-run trend. EM represents emerging markets.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
   20
Central bank policy rates                                                                                                                                        GTM – Asia   | 21
                   G4 central bank key policy rates                                                                       Changes in central bank policy rates
                   Per annum                                                                                              Number of hikes or cuts***
                    7%                                                                                    Deposit          150
                                                                                         Policy rate
                                                                                                           rate*
                                                                          Eurozone           0.0%            -0.5%
                    6%                                                    Japan**        -0.1 to 0.0%        -0.1%                                                         Developed markets
                                                                                                                           100                                                                      Rate hikes
                                                                          UK                 0.1%            0.1%
Global economy

                                                                                                                                                                           Emerging markets
                                                                          U.S.           0.0 to 0.25%        0.1%
                    5%
                                                                                                                            50

                    4%
                                                                                                                              0

                    3%
                                                                                                                            -50

                    2%

                                                                                                                          -100
                                                                                                                                                                           Developed markets
                    1%                                                                                                                                                                              Rate cuts
                                                                                                                                                                           Emerging markets

                                                                                                                          -150
                    0%

                                                                                                                          -200
                   -1%                                                                                                             '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD
                      '00       '02      '04      '06      '08      '10      '12      '14     '16      '18      '20                                                                         '20

                 Source: J.P. Morgan Asset Management; (Left) FactSet; (Right) BIS.
                 G4 are the Bank of England, the Bank of Japan (BoJ), the European Central Bank and the U.S. Federal Reserve. *Key deposit rates that central banks charge
                 commercial banks on their excess reserves. **The BoJ has adopted a three-tier system in which a negative interest rate of -0.1% will be applied to the policy rate
                 balance of the aggregate amount of all financial institutions that hold current accounts at the BoJ. ***Count covers the 38 central banks included in the Bank for
                 International Settlements’ central bank policy monitor. Year-to-date data reflect most recently available as of 25/03/20. Past performance is not a reliable indicator of
                 current and future results.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
   21
Central bank balance sheets                                                                                                                        GTM – Asia          | 22
                  Central bank bond purchases
                   12-month rolling flow of bond purchases by G4 central banks*, USD billions
                   6,000
                                                                                                                                                                                   Projections

                   5,000
Global economy

                                          U.S.
                                          Eurozone
                                          UK
                   4,000
                                          Japan
                                          Net

                   3,000

                   2,000

                   1,000

                        0

                  -1,000
                            '06        '07        '08         '09         '10         '11        '12         '13         '14         '15        '16         '17         '18        '19           '20
                 Source: Bank of England, Bank of Japan, Bloomberg Finance L.P., European Central Bank, U.S. Federal Reserve, J.P. Morgan Asset Management.
                 *New purchases of bonds are based on period to period changes in average holdings during the quarter across various asset purchase programs as reported by each
                 respective G4 central bank (the Bank of England, the Bank of Japan, the European Central Bank and the U.S. Federal Reserve), announced purchase plans of these
                 central banks and J.P. Morgan Asset Management projections, converted to common currency by average monthly exchange rates.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   22
Eurozone & Japan: Monetary policy                                                                                                                          GTM – Asia      | 23
                  ECB bond purchases                                                                                 Bank of Japan’s holdings
                  Public sector bond purchases, EUR billions                                                         Share of market total
                  2,200                                                                                              100%

                                                                 Total outstanding debt
                  2,000                                                                                               80%
                                                                 Cumulative ECB PSPP purchases
                                                                                                                                                                  Equity ETF market
                                                                 33% limit*
Global economy

                  1,800                                                                                               60%

                  1,600                                                                                               40%

                  1,400                                                                                               20%                                               Government bond market

                  1,200                                                                                                0%
                                                                                                                            '11       '12         '13   '14    '15        '16         '17   '18     '19         '20

                  1,000
                                                                                                                     Bank of Japan pace of purchases
                    800
                                                                                                                     JPY billions, rolling six-month average                                      Share of total
                                                                                                                     120,000                                                                                    35%
                                                                                                                                      Government bonds                                      Equity ETFs
                    600                                                                                              100,000          Equity ETFs                                                               30%

                                                                                                                                                                                                                25%
                    400                                                                                               80,000
                                                                                                                                                                                                                20%
                                                                                                                      60,000
                    200                                                                                                                                                                                         15%
                                                                                                                      40,000
                                                                                                                                                                                                                10%
                       0
                                                                                                                      20,000                                                                                    5%

                                                                                                                            0                                                                                   0%
                                                                                                                                '14         '15         '16       '17           '18         '19           '20

                 Source: FactSet, J.P. Morgan Asset Management. (Left) ECB, Eurostat; (Top right) Bank of Japan, Investment Trusts Association of Japan; (Bottom right) Bank of
                 Japan.
                 *The ECB public sector purchase program (PSPP) had a limit of 33% for maximum share of an issuer’s outstanding securities that the ECB is prepared to buy. This
                 limit was initially set at 25% at the start of the PSPP and was revised upwards to 33% in September 2015. The ECB asset purchase program will now include the
                 pandemic emergency purchase program (PEPP) and PSPP where the 33% limit will not be binding.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   23
Government debt and fiscal balance                                                                                            GTM – Asia     | 24
                  Gross government debt and fiscal balance
                  % of GDP, 2020 estimates

                                           250%                 Emerging Market                                         Japan

                                                                Developed Market
Global economy

                                           200%
                   Gross government debt

                                           150%                                                                                 Italy

                                                    Singapore                                    U.S.
                                                                                                                             France
                                           100%                                                                                          Spain           Canada
                                                                                                          India
                                                                                   China                                                UK
                                                                                                                  Malaysia                                               Germany

                                                                                           South Korea                       Thailand
                                           50%
                                                                                                                                                                            Australia
                                                                                                          Philippines
                                                                                                                                                               Taiwan
                                                                                                                                             Indonesia

                                            0%
                                              -9%     -8%          -7%            -6%      -5%           -4%         -3%                -2%              -1%        0%          1%        2%
                                                                                                          Fiscal Balance
                 Source: Bloomberg, European Commission AMECO forecasts, Government Budgets, International Monetary Fund - World Economic Outlook, J.P. Morgan Asset
                 Management. Emerging and developed markets classification based on MSCI 2019 Annual Market Classification Review.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   24
Political calendar                                                                                                                               GTM – Asia    | 25
                  Developed markets political timeline
                                                                                                                                                             2021
                                               June Global                                                       21-22 November          December UK
                                               WTO Ministerial                                                   Global                  Brexit transition
                                               meeting*                                                          G20 summit              period ends
Global economy

                        Apr            May            Jun             Jul           Aug             Sep            Oct             Nov             Dec          Jan           Feb        Mar

                                  10-12 June Global        13-16 July U.S.      24-27 August U.S.                3 November U.S.                             20 Jan U.S.
                                  G7 Summit                U.S. Democratic      U.S. Republican                  U.S. General election                       Presidential inauguration
                                                           candidate is         candidate is selected
                                                           selected

                  Emerging markets political timeline
                                                                                                                                                             2021
                                                                                                                          November
                   6-9 Apr ASEAN                 9 Jun OPEC                                                               ASEAN
                   ASEAN Summit*                 OPEC Meeting                                                             ASEAN Summit

                        Apr            May            Jun             Jul           Aug             Sep            Oct             Nov             Dec          Jan           Feb        Mar

                   15 April South Korea                                          September Hong Kong             October/November China
                   Legislative election                                          Legislative Council             Fifth Plenum of the 19th
                                                                                 election                        CPC Central Committee

                 Source: Bloomberg Finance L.P., J.P. Morgan Asset Management. *Events have been postponed until further notice.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   25
United States: Election                                                                                                                                      GTM – Asia     | 26
                   U.S. presidential elections and the incumbency factor                                                Congressional seat gain/loss by chamber*
                   Percent of times result occurred, 1796 through 2016                                                  Avg. # of seats switching parties as a % of seats on ballot**
                  80%
                                                                                                                        20%
                                                                                                                                       In 2020:       Dems need           Reps need

                  70%                        68%                                                                                       House*        Keep 17 (4%)       Pick up 17 (4%)
Global economy

                                                                                                                                       Senate*     Pick up 4 (11%)        Keep 3 (9%)
                                                                                                                        16%
                  60%

                  50%
                                                                                                                        12%

                  40%

                                                                                        32%
                                                                                                                          8%
                  30%

                  20%
                                                                                                                          4%

                  10%

                    0%                                                                                                    0%
                               Incumbent wins re-election                 Incumbent loses re-election                                Presidential Election Years                       Midterm Elections
                 Source: J.P. Morgan Asset Management; (Left) 270toWin; (Right) U.S. House of Representatives, U.S. Senate. *Seats in the House of Representatives are filled by
                 direct election every two years (members of the United States House of Representatives serve two-year terms), but only one-third of Senate seats are on the ballot
                 every two years (United States Senators serve six-year terms). As a result, during every presidential election year, the entire House and one-third of the Senate are up
                 for election. 2018 House of Representatives has one vacancy as the election result in one North Carolina district is still under dispute. The right chart assumes no
                 change in the White House and thus, a Republican Vice President to break any tie in a Senate vote. **Covers period 1932 – present.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   26
United States: Economic growth and the composition of GDP                                                                                    GTM – Asia   | 27
                  Real GDP                                                                                                            Components of GDP
                  Year-over-year change                                                                                               4Q19 nominal GDP, USD trillions
                  10%                                                      Real GDP                                   4Q19
                                                                                                                                      23                     3.8% Housing
                                                                        Year-over-year change:                           2.3%
                                                                                                                                      21
                    8%                                                  Quarter-over-quarter SAAR* change:               2.1%
                                                                                                                                                       13.3% Investment ex-housing
Global economy

                                                                                                                                      19

                    6%                                                                                 Average post-Global            17
                                                                                                                                                          17.6% Gov’t spending
                                                                                                       Financial Crisis: 2.3%
                                                              Average: 2.8%
                                                                                                                                      15
                    4%
                                                                                                                                      13

                    2%                                                                                                                11

                                                                                                                                       9
                    0%                                                                                                                                     68.1% Consumption
                                                                                                                                       7

                   -2%                                                                                                                 5

                                                                                                                                       3
                   -4%
                                                                                                                                       1

                   -6%                                                                                                                -1
                         '69       '74       '79        '84       '89       '94        '99       '04      '09      '14          '19                         -2.7% Net exports

                 Source: Bureau of Economic Analysis, FactSet, J.P. Morgan Asset Management.
                 *SAAR stands for seasonally adjusted annualized rate.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   27
United States: Business cycle thermometer                                                                                                                               GTM – Asia    | 28
                   U.S. business cycle indicators
                   Current percentile rank relative to range of data since Jan. 1990
                  100
Global economy

                                                                                                                                                                                                             Latest

                                                                                                                                                                                                                       Elevated
                    75

                    50

                                                                                                                                                                                                                       Retrenched
                    25
                                                                                                                                                                                                               3
                                                                                                                                                                                                             months
                                                                                                                                                                                                              ago

                      0
                             Consumer           Wage           Nonfarm          Housing      Light Vehicle      Business         Capex           Durable         Industrial       Leading         Credit     Example
                             Confidence         Growth         Payrolls          Starts          Sales         Confidence                        Orders         Production       Economic       Conditions
                                                                                                                                                                                   Index
                                                            Consumers                                                                Businesses
                 Source: BEA, Conference Board U.S., FactSet, U.S. Census Bureau, U.S. Department of Labor, Wards Intelligence, J.P. Morgan Asset Management.
                 Indicators are: Consumer Confidence – Monthly survey index of how consumers perceive their own financial status and the general economy; Wage Growth – Average hourly
                 earnings of production and non-supervisory workers; Nonfarm Payrolls – Monthly change in U.S. nonfarm employment (three-month moving average); Housing Starts – Number of
                 private housing units that construction has started within a specified timeframe; Light Vehicle Sales – Cars and passenger trucks sold in a given month; Business Confidence –
                 Monthly survey of Chief Executive Officers about their outlook for the economy; Capex – Monthly new orders of non-defense capital goods (excluding aircraft); Durable Orders –
                 Monthly new orders of durable goods in the manufacturing sector, seasonally adjusted; Industrial Production – Monthly output of the industrial sector; Leading Economic Index – An
                 index aggregating values of 10 key variables intended to forecast future U.S. economic activity; Credit Conditions – Leading Credit Index that aggregates performance of six financial
   28            market instruments to track credit conditions in the U.S. economy. Durable Orders percentile rank change from 3 months ago is -0.6 and therefore does not appear on the chart.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
United States: Consumer finances                                                                                                                                     GTM – Asia          | 29
                  Consumer balance sheet                                                                             Household debt service ratio
                  4Q19, USD trillions outstanding, not seasonally adjusted                                           Debt payments as % of disposable personal income, SA
                                                                                                                     14%                                                                         4Q07:
                   140           Total assets: $134.9tn                  3Q07 Peak: $85.6tn
                                                                                                                                                                                                 13.2%
                                                                         1Q09 Low: $74.6tn
                   130                                                                                               13%

                   120
Global economy

                                      Homes: 24%                                                                     12%

                   110                                                                                                      1Q80:
                                                                                                                     11%    10.6%
                                                                                                                                                                                                                          1Q20**:
                   100             Other tangible: 5%                                                                                                                                                                       9.7%
                                                                                                                     10%
                    90                Deposits: 8%
                                                                                                                      9%
                    80                                                                                                     '80          '85          '90         '95         '00          '05          '10         '15            '20

                    70            Pension funds: 21%                                                                 Household net worth
                                                                                                                     Not seasonally adjusted, USD billions                                                            1Q20**:
                    60                                                                                                                                                                                               $115,703
                                                                                                                     130,000
                                                                                                                                                                                     3Q07:
                    50                                                         Other non-revolving: 2%               110,000                                                       $71,338
                                                                                        Revolving*: 7%
                    40                                                                  Auto loans: 7%                90,000
                                                                                   Other liabilities: 9%
                    30               Other financial                                 Student debt: 10%                70,000
                                      assets: 42%
                                                                                                                      50,000
                    20                                                    Total liabilities: $16.6tn
                                                                                                                      30,000
                    10
                                                                              Mortgages: 66%                          10,000
                     0                                                                                                           '90   '92    '94   '96    '98   '00   '02   '04    '06   '08    '10   '12   '14    '16     '18

                 Source: FactSet, FRB, J.P. Morgan Asset Management; (Top and bottom right) Bureau of Economic Analysis.
                 Data include households and nonprofit organizations. SA stands for seasonally adjusted.
                 *Revolving includes credit cards. Values may not sum to 100% due to rounding. **1Q20 figures for debt service ratio and household net worth are J.P. Morgan Asset
                 Management estimates.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   29
United States: Employment and wages                                                                          GTM – Asia   | 30
                  Unemployment rate and average hourly earnings*
                  Percent of labor force, year-over-year change, seasonally adjusted
                  12%

                                                                                                                     Recessions
                   10%
Global economy

                    8%

                                                                        Unemployment rate

                    6%

                                                                                                                                                 2/2020: 3.5%
                    4%

                    2%                                                     Average hourly                                                        2/2020: 3.3%
                                                                             earnings

                    0%
                      '85                        '90                       '95                      '00                  '05      '10   '15             '20
                 Source: FactSet, U.S. Bureau of Labor Statistics, J.P. Morgan Asset Management.
                 *Average hourly earnings are calculated from the wages of production and non-supervisory workers.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   30
United States: Inflation                                                                                                                                GTM – Asia   | 31
                   Headline and core consumer price index (CPI)
                   Year-over-year change, seasonally adjusted
                   15%
                                                                                                                                                                     50-yr. avg.      Latest
                                                                                                                                          Headline CPI                  3.9%          2.3%
                                                                                                                                          Core CPI                      3.9%          2.4%
                   12%
Global economy

                                                                                                                                          Food CPI                      3.9%          1.8%
                                                                                                                                          Energy CPI                    4.4%          2.8%
                                                                                                                                          Headline PCE deflator         3.4%          1.8%

                    9%                                                                                                                    Core PCE deflator             3.4%          1.8%

                    6%

                    3%

                    0%

                   -3%
                                         '75               '80               '85               '90               '95               '00               '05               '10             '15        '20
                 Source: Bureau of Economic Analysis, Department of Labor Statistics, FactSet, J.P. Morgan Asset Management.
                 Core CPI is defined as CPI excluding food and energy prices. The Personal Consumption Expenditure (PCE) deflator employs an evolving chain-weighted basket of
                 consumer expenditures instead of the fixed-weight basket used in CPI calculations. Latest inflation numbers are February 2020 for CPI & sub-indexes and for PCE
                 deflators.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   31
United States: Monetary policy                                                                                                                  GTM – Asia         | 32
                   Federal funds rate expectations
                   Market expectations for the fed funds rate
                   6%                                                                                            Federal Reserve Policy Actions
                                                                                                                 Restarted unlimited asset purchase programs

                                                                                                                 Reduced reserve requirements for the banking sector
Global economy

                   5%                                                                                            Expanded the asset purchase program to include commercial mortgage-backed
                                                                                                                 securities

                                                                                                                 Restarted Term Asset-Backed Securities Loan Facility (TALF)

                   4%                                                                                            Launched a Primary (PMCCF) and Secondary Market Corporate Credit Facility
                                                                                                                 (SMCCF)

                                                                                                                 Allowed municipal debt to be eligible as collateral in Money Market Fund Liquidity
                                                                                                                 Facility (MMLF) and Commercial Paper Funding Facility (CPFF)
                                                                    Federal funds rate
                   3%
                                                                    Market expectations on 31/03/20

                   2%

                   1%

                                                                                                                                                                                     0.06%       0.11%
                   0%
                        '05                 '07                  '09                  '11                  '13                '15               '17                '19                '21
                 Source: Bloomberg Finance L.P., FactSet, U.S. Federal Reserve, J.P. Morgan Asset Management.
                 Market expectations are the federal funds rates priced into the Fed Fund futures market as of 31/03/20.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

   32
Eurozone: Economic snapshot                                                                                                                            GTM – Asia                 | 33
                  Eurozone PMIs                                                                                      Eurozone CPI inflation
                  Index, 3-month moving average                                                                      Year-over-year change
                   65                                                                                                 3.5%

                                                                                 Mar ’20                              3.0%
                                          Eurozone Manufacturing PMI –                                                2.5%
                                                                                  37.0                                                                             ECB inflation target: 2%
                                          New Export Orders                                                           2.0%
Global economy

                                          Germany Composite PMI                   37.2
                                                                                                                      1.5%
                   60                     France Composite PMI                    30.2
                                                                                                                      1.0%
                                          Italy Composite PMI* (Feb ’20)          50.7
                                                                                                                      0.5%                  Core CPI

                                                                                                                      0.0%
                                                                                                                      -0.5%                                                       Headline CPI
                   55                                                                                                 -1.0%
                                                                                                                           '09      '10    '11    '12    '13    '14     '15    '16      '17         '18         '19     '20

                                                                                                                     Consumer confidence** and retail sales
                                                                                                                     Year-over-year change, 3-month moving average                                                    Index
                   50                                                                                                 5%                                                                                                    0
                                                                                                                                 Retail sales
                                                                                                                      4%
                                                                                                                                                                                                                            -5
                                                                                                                      3%
                                                                                                                      2%                                                                                                    -10
                   45                                                                                                 1%
                                                                                                                      0%                                                                                                    -15

                                                                                                                     -1%
                                                                                                                                                                                                                            -20
                                                                                                                     -2%                                                       Consumer confidence
                   40                                                                                                -3%                                                                                                    -25
                        '10    '11      '12     '13      '14     '15       '16      '17    '18     '19     '20                    '11     '12    '13     '14     '15     '16      '17         '18         '19         '20
                 Source: FactSet, J.P. Morgan Asset Management; (Left) J.P. Morgan Economic Research, Markit; (Top and bottom right) Eurostat; (Bottom right) European
                 Commission.
                 PMIs are relative to 50, which indicates contraction (below 50) or expansion (above 50) of the sector. Core CPI is defined as CPI excluding food and energy prices.
                 *Services component of Italy’s Composite PMI for March 2020 is not available as of 31/03/20.
                 **Eurozone consumer confidence as reported by the European Commission, which measures the level of optimism that consumers have about the economy in relation
                 to prior months and is typically below zero.
                 Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
   33
Global and Asia equity market returns                                                                                                                          GTM – Asia    | 34
                                                                                                                                                                                           10-yrs ('10 - '20)
              2009           2010          2011          2012          2013          2014           2015          2016          2017          2018           2019         1Q '20         Ann. Ret. Ann. Vol.

              India        ASEAN           U.S.          India         U.S.         China A        Japan        Taiwan         China          U.S.         Taiwan          China           U.S.     China A

             102.8%         32.4%          2.1%         26.0%         32.4%          52.1%         9.9%          19.6%         54.3%         -4.4%          37.7%         -10.2%          10.5%      24.5%

             China A        Korea        ASEAN          China         Japan          India        China A         U.S.         Korea          India        China A        China A         Taiwan      India

             98.5%          27.2%         -6.1%         23.1%         27.3%          23.9%         2.4%          12.0%         47.8%         -7.3%          37.2%         -11.6%           7.3%      22.8%

             Taiwan        Taiwan        Europe         ASEAN         Europe          U.S.          U.S.         Korea          India        Taiwan          U.S.         Japan           China      Korea

             80.2%          22.7%        -10.5%         22.8%         26.0%          13.7%          1.4%          9.2%         38.8%         -8.2%          31.5%         -16.6%           4.6%      20.6%
                                                        APAC                                                     APAC          APAC
             ASEAN           India        Korea                       Taiwan        Taiwan        Europe                                     ASEAN         Europe         Taiwan          Japan      China
                                                        ex-JP                                                    ex-JP         ex-JP
             75.0%          20.9%         -11.8%        22.6%          9.8%          10.1%         -2.3%          7.1%         37.3%         -8.4%          24.6%         -19.0%           4.1%      20.3%
Equities

             APAC           APAC                                                                                                                                                          APAC
                                          Japan         Korea          Korea         China          India       ASEAN         China A        Japan          China           U.S.                     Europe
             ex-JP          ex-JP                                                                                                                                                         ex-JP
             73.7%          18.4%        -14.2%         21.5%          4.2%          8.3%          -6.1%          6.2%         32.6%         -12.6%         23.7%         -19.6%          3.5%       17.1%
                                          APAC                                                                                                APAC                         APAC                      APAC
              Korea         Japan                       Europe         China        ASEAN          Korea         Japan         ASEAN                        Japan                         Europe
                                          ex-JP                                                                                               ex-JP                        ex-JP                     ex-JP
              72.1%         15.6%        -15.4%         19.9%          4.0%          6.4%          -6.3%          2.7%         30.1%         -13.7%         20.1%         -20.7%           3.1%      16.9%
                                                                       APAC          APAC                                                                   APAC
              China          U.S.         China         Taiwan                                     China         China         Taiwan        Europe                        Korea          China A    Taiwan
                                                                       ex-JP         ex-JP                                                                  ex-JP
             62.6%          15.1%        -18.2%         17.7%          3.7%           3.1%         -7.6%          1.1%         28.5%         -14.3%         19.5%         -22.4%           2.6%      16.9%
                                                                                                   APAC
             Europe         China        Taiwan          U.S.        China A         Japan                      Europe         Europe         China         Korea         Europe          Korea      ASEAN
                                                                                                   ex-JP
             36.8%          4.8%         -20.2%         16.0%         -2.6%          -3.7%         -9.1%          0.2%         26.2%         -18.7%         13.1%         -24.2%           2.6%      16.4%

               U.S.        Europe        China A       China A         India        Europe        Taiwan          India        Japan          Korea        ASEAN          ASEAN           ASEAN      Japan

             26.5%          4.5%         -20.5%         10.9%         -3.8%          -5.7%        -11.0%         -1.4%         24.4%         -20.5%          8.8%         -30.4%           1.4%      13.5%

             Japan         China A         India        Japan         ASEAN          Korea        ASEAN         China A         U.S.        China A          India         India           India      U.S.

              6.4%          -8.4%        -37.2%          8.4%         -4.5%         -10.7%        -18.4%        -15.2%         21.8%         -27.6%          7.6%         -31.1%          -0.4%      13.3%
           Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management.
           Returns are total returns based on MSCI indices, except the U.S., which is the S&P 500, and China A, which is the CSI 300 index in U.S. dollar terms. China return is
           based on the MSCI China index. 10-yr total (gross) return data is used to calculate annualized returns (Ann. Ret.) and annualized volatility (Ann. Vol.) and reflect the
           period 31/03/10 – 31/03/20. Past performance is not a reliable indicator of current and future results.
           Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

  34
Global equities: Return composition                                                                                                                    GTM – Asia        | 35
            Sources of global equity returns*
            Total return, USD
             40%

                          31.5%
                                                                                                     2019            2020 YTD

              30%                          24.6%

                                                                                                                                      Total return                     Multiple expansion**
                                                           20.1%
                                                                            19.5%           18.9%
              20%                                                                                                                     Currency return                  Dividend yield
                                                                                                                                      EPS growth outlook***

              10%
Equities

               0%

             -10%

             -20%                                                                                                                                             -16.6%
                                                                                                                             -19.6%
                                                                                                                                                                                -20.7%
                                                                                                                                             -24.2%                                           -23.6%
             -30%
                           U.S.           Europe           Japan        Asia Pacific          EM                              U.S.           Europe           Japan        Asia Pacific        EM
                                                                         ex-Japan                                                                                           ex-Japan
           Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management. *All return values are MSCI Gross Index (official) data, except the U.S., which is the S&P
           500. **Multiple expansion is based on the forward price-to-earnings ratio. ***Earnings per share (EPS) growth outlook is based on next 12 month aggregate (NTMA)
           earnings estimates. Past performance is not a reliable indicator of current and future results.
           Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

  35
Global equities: Profit margins                                                                                                                        GTM – Asia       | 36
            MSCI AC World EPS and developed market inflation                                                 U.S. wage growth** and profit margins
            Year-over-year change                                           Year-over-year change            Year-over-year change                                            Year-over-year change
             12%                                                                                  50%          60                       Recession                                                         5.0
                          PPI inflation*                            Earnings per share                                                                                         Wage growth**
                                                                                                               50                                                                                         4.5
                                                                                                               40                                                                                         4.0
                                                                                                  40%
                                                                                                               30
                                                                                                                                                                                                          3.5
               8%                                                                                              20
                                                                                                  30%                                                                                                     3.0
                                                                                                               10
                                                                                                                                                                                                          2.5
                                                                                                                0
                                                                                                  20%                                                                                                     2.0
                                                                                                              -10
               4%
                                                                                                              -20                                                                                         1.5
                                                                                                                          Profit margins
                                                                                                  10%         -30                                                                                         1.0
Equities

                                                                                                                 '90              '95         '00         '05         '10          '15             '20

               0%                                                                                 0%
                                                                                                             Europe vs. U.S. operating profit margins
                                                                                                             Earnings per share / sales per share
                                                                                                              13%
                                                                                                  -10%
                                                                                                              12%
              -4%                                                                                                                                                                    S&P 500
                                                                                                  -20%        11%

                                                                                                              10%

                                                                                                  -30%         9%
              -8%                                                                                              8%

                                                                                                  -40%         7%
                                                                                                                                                                                         MSCI Europe
                                                                                                               6%

             -12%                                                                                 -50%         5%
                    '99   '01    '03    '05    '07    '09    '11    '13     '15    '17    '19                       '00     '02         '04   '06   '08     '10     '12      '14    '16      '18         '20

           Source: FactSet, J.P. Morgan Asset Management; (Left) J.P. Morgan Economic Research; (Top right) U.S. Bureau of Economic Analysis, U.S. Department of Labor;
           (Bottom right) Standard & Poor’s; (Left and bottom right) MSCI. *PPI is producer price index. **Wage growth is the year-over-year change in the average hourly
           earnings of production and non-supervisory workers.
           Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

  36
Global equities: Earnings expectations                                                                                                              GTM – Asia          | 37
            Earnings growth                                                                                  Earnings revisions ratios
            Earnings per share, year-over-year change, consensus estimates                                   Net earnings revisions to consensus estimates, 13-week moving average
             30%                                                                                             60%
                                                                                      2018
                                                                                                                                                                             U.S.
                                                                                      2019
             25%     24%
                                                                                                             40%
                                                                                      Initial 2020*
                                                                                                                                                          Japan
                                                                                      Current 2020
             20%
                                                                                                             20%
                                                   15%
             15%
Equities

                                                       12%             13%
                                                                                                               0%
                                                                            10%
             10%                9%                                                             9%
                                           8%
                                                                                                                                                                   Europe
                                                                                    6%
                                                               5%                                            -20%
              5%
                                     3%
                           2%                                                                       2%

              0%                                                                                             -40%
                                                                    -1%                                                                                                             Asia Pacific
                                                -1%
                                                                                                                                                                                     ex-Japan
                                                                                         -2%
             -5%
                            U.S.                 EM            Asia Pacific ex-          Europe              -60%
                                                                   Japan                                            '13         '14          '15          '16          '17            '18          '19

           Source: IBES, MSCI, Standard & Poor’s, Thomson Reuters Datastream, J.P. Morgan Asset Management. Asia Pacific ex-Japan, EM, Europe and U.S. equity indices
           used are the MSCI Asia Pacific ex-Japan, MSCI Emerging Markets, MSCI Europe and S&P 500, respectively. *Initial 2020 earnings are 2020 earnings expectations as
           at 31/12/19. Consensus estimates used are calendar year estimates from IBES. Revisions are based on the current unreported year. Net earnings revisions is
           (number of companies with upward earnings revisions – number of companies with downward earnings revisions) / number of total companies. Past performance is
           not a reliable indicator of current and future results.
           Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

  37
Global equities: Valuations                                                                                                                                                                                GTM – Asia               | 38
             Equity market valuations – Price to earnings
             Forward P/E ratios                                                                                                                                                                                                       15-yr. range
                                                                                                                                                  38.3                                                      35.8
             30x                                                                                                                                                                                                                      15-yr. average
                                                                                                                                                                                                                                      Latest

             20x
                         15.5                                                                                15.4               16.4
                                                                                                                                                          15.4                  14.9       15.7
                                    13.2                                 13.6                                                 14.2                                                                   13.4        14.1                                    15.1
                         14.7                   12.6                                12.5                         13.6                        13.6                                                                            13.6
                                                          11.4                                     11.7                                                  12.2                   14.7                            13.7                         10.9
                                    13.0       12.2                     12.0                                                               11.4                         9.6                                                                             11.2
             10x                                          11.2                     11.0           11.7                                                                                      9.8      10.7                   11.8             10.6
                                                                                                                                                                        9.5                                                                                             7.0
                                                                                                                                                                                                                                                                        6.6

              0x
                    S&P 500     Europe     Asia Pac Emerging     ASEAN         China A     China          Hong          India       Indonesia     Japan         Korea     Malaysia Philippines Singapore    Taiwan     Thailand     Brazil      Mexico         Russia
Equities

                                ex-UK      ex-Japan markets                   (CSI 300)                   Kong

             Equity market valuations – Price to book
             Trailing P/B ratios                                                                                                                                                                                                      15-yr. range
                                                                                                                        5.2          5.2
             5x                                                                                                                                                                                                                       15-yr. average
                                                                                                                                                                                                                                      Latest
             4x
                                                                                                                                           3.4
             3x          3.2                                                                                                  3.0
                         2.6                                                                                                                                                              2.4                                                           2.7
                                                                                                                          2.6
                                                                        2.0                                                                2.2                                  2.0
             2x                                                                    1.9                                                                                                                                       2.0        1.8
                                    1.7         1.7       1.7                                 1.6                                                                                                                1.9                                    1.8
                                                                                  1.7                                                                                                     1.6        1.5       1.9         1.6          1.8
                                    1.6        1.5       1.5        1.4                       1.6           1.4                                          1.4                   1.4
                                                                                                                                                                    1.3
             1x                                                                                             1.1                                          1.1                                        1.1                                                                 1.0
                                                                                                                                                                   0.9                                                                                                 0.8
             0x
                   S&P 500     Europe    Asia Pac Emerging      ASEAN      China A        China       Hong          India        Indonesia       Japan         Korea     Malaysia Philippines Singapore    Taiwan    Thailand      Brazil      Mexico         Russia
                               ex-UK     ex-Japan markets                 (CSI 300)                   Kong

           Source: Bloomberg Finance L.P., China Securities Index, FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management.
           Price-to-earnings (P/E) and price-to-book (P/B) ratios are in local currency terms. China A valuations based on the CSI 300 Index and use 10 years of data due to
           availability. China valuation is based on the MSCI China. 15-year range for P/E and P/B ratios are cut off to maintain a more reasonable scale for some indices.
           Past performance is not a reliable indicator of current and future results.
           Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

  38
Global equities: High dividend                                                                                                                                GTM – Asia         | 39
             MSCI AC Asia Pacific ex-Japan: Performance comparison*
             USD index, Jan. 2000 = 100
             800
             700
                                 High Dividend Total Return index
             600
                                 Total Return index
             500
                                 Price index
             400
             300
             200
             100
                0
Equities

                 '00      '01      '02       '03      '04       '05      '06      '07       '08      '09       '10         '11      '12      '13       '14    '15          '16      '17         '18   '19      '20

             Risk and return profile**                                                                               Number of companies yielding greater than 3% by region
                                                                                                                     Constituents of MSCI AC World Index
                                            Annualized          Annualized          Risk-adjusted
                                                                                                                     400         367
                                              return             volatility             return
                                                                                                                     350
                 MSCI World (DM)                   5.9%            15.2%                 0.39                        300
                                                                                                                                                    250
                                                                                                                     250                                            220
                 MSCI World (DM)                                                                                     200                                                                  169
                                                   8.0%            12.7%                 0.63                                                                                                           143
                 High Dividend
                                                                                                                     150
                 MSCI AC Asia                                                                                        100
                                                   6.6%            20.4%                 0.33
                 Pacific ex-Japan                                                                                    50

                 MSCI AC APAC                                                                                         0
                                                   9.5%            13.4%                 0.71                                Asia Pac. ex-         Europe           U.S.            EM ex-Asia         Japan
                 ex-JP High Div
                                                                                                                                Japan

           Source: FactSet, MSCI, J.P. Morgan Asset Management.
           *Total returns based on MSCI indices in U.S. dollar terms. **Annualized return and volatility based on total monthly return data (USD) over the latest 15 years. Risk-
           adjusted return is calculated as annualized return / annualized volatility.
           Positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results.
           Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

  39
Global equities: Growth versus value                                                                                                          GTM – Asia      | 40
            Growth vs. value valuations*                                                                            Growth vs. value relative performance and rates
            MSCI World growth / value fwd. P/E ratio, # of std. dev. over / under average                           MSCI World value / growth performance                     10-2 year spread
             3                                                                                                      1.8                                                                     3.5%
                                                                                                                                            Growth
                                                                                                                                            underperforming
                                    Growth expensive                                                                1.7                     value
             2                      relative to value

                                                                                                                    1.6
                                                                                                                                                                                            2.5%
             1                                                                                                      1.5

                                                                                                                    1.4
Equities

             0

                                                                                                                    1.3                                                                     1.5%

             -1
                                                                                                                    1.2

                                                                                                                                            Growth
                                                                                                                    1.1                     outperforming
             -2
                                                                                                                                            value                                           0.5%
                                                                                                                    1.0

             -3                                                                Growth cheap relative
                                                                               to value                             0.9
                                                                                                                              Value vs. growth                              Spreads
             -4                                                                                                     0.8                                                                     -0.5%
                  '05   '06   '07    '08   '09   '10   '11   '12   '13   '14    '15   '16   '17   '18   '19   '20         '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
           Source: FactSet, MSCI, J.P. Morgan Asset Management.
           *Growth is the MSCI World Growth index and value is the MSCI World Value index.
           Past performance is not a reliable indicator of current and future results.
           Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

  40
Emerging market equities: Performance drivers                                                                                                                GTM – Asia         | 41
             EM vs. DM growth and equity performance                                                                EM price to book and subsequent returns
             %, next 12 months’ growth estimates                                                Index level         %, next 12 months’ price return in USD
              5%                                                                                         160        100%
                                                                                                                                                                     Current level
                         EM minus DM GDP growth                                                                      80%
                                                                                                                     60%
                                                                                                         140         40%
              4%          EM growth & equity
                                                                                                                     20%
                          outperformance
                                                                                                                      0%
                                                                                                         120
                                                                                                                    -20%
                                                                                                                    -40%
              3%
                                                                                                         100        -60%
                                                                                                                    -80%
Equities

                                                                                                                        0.8x              1.2x               1.6x          2.0x         2.4x            2.8x

              2%                                                                                         80
                                                                                                                    Relative EM / DM equity performance and USD REER
                                                                                                                    Relative index level, Dec. 1997 = 100                                        Index level
                                                                                                                    300                                                                                     80
                                                                                                         60                      MSCI EM / MSCI DM
              1%                                                                                                    250
                                                                                                                                                                                                            90

                                                                         EM growth & equity                         200
                                                                                                         40                                                                                                 100
                                                                         underperformance
                                                                                                                    150
              0%                                                                                                                                                                                            110
                                                                                                         20         100

                                                                                                                                                                                                            120
                                                                                                                      50
                                                                         MSCI EM / MSCI DM                                                                                   USD REER (inverted)*
             -1%                                                                                         0             0                                                                                    130
                   '96   '98    '00    '02    '04    '06    '08    '10   '12    '14    '16    '18                          '98    '00   '02      '04   '06     '08   '10   '12    '14   '16    '18    '20

           Source: FactSet, MSCI, J.P. Morgan Asset Management; (Left) J.P. Morgan Economic Research; (Top right) MSCI.
           EM = Emerging markets; DM = Developed markets.
           *REER is the real effective exchange rate. Past performance is not a reliable indicator of current and future results.
           Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.

  41
APAC ex-Japan equities: Exports & earnings                                                                                                           GTM – Asia       | 42
            Domestic vs. exports-oriented Asian companies*                                                      Growth in nominal exports and earnings per share
            MSCI AC Asia Pacific ex-Japan, earnings per share, Jan. 2009 = 100                                  USD, year-over-year change
             600                                                                                                 80%

                                                                                                                                                                     MSCI AC Asia
                                                                                                                 60%                                                 Pacific ex-Japan EPS
             500

                                                      Less than 70% of
                                                      revenue derived
                                                                                                                 40%
                                                      domestically
             400

                                                                                                                 20%
Equities

             300

                                                                                                                  0%

             200
                                                                                                                -20%                                                    EM Asia ex-China exports**

                                                                             Between 70% and
                                                                             95% of revenue
             100                       More than 95% of                      derived domestically               -40%
                                       revenue derived
                                       domestically

               0                                                                                                -60%
                   '09     '10   '11    '12     '13     '14    '15     '16     '17    '18     '19    '20               '01     '03      '05      '07     '09      '11      '13    '15    '17    '19
           Source: FactSet, MSCI, J.P. Morgan Asset Management; (Right) CEIC, national statistics agencies.
           Earnings per share (EPS) used is next 12 months’ aggregate estimate. *Universe of stocks within the MSCI AC Asia Pacific ex-Japan index are split into three buckets
           depending on their revenue exposure to their domestic market. Over the time period examined (01/01/09 – 31/03/20), monthly adjustments are made to the buckets to
           reflect changes in a company's operations over time. Subsequently, earnings-per-share (EPS) for each bucket is calculated by summing the market-value weighted
           EPS for each company on a monthly basis over the examined period. Each EPS series is then indexed to 100 on 01/01/09. **EM Asia ex-China includes Hong Kong,
           Korea, Malaysia, Singapore, Taiwan, Thailand and Vietnam. Overall exports aggregate is gross domestic product (GDP)-weighted. Past performance is not a reliable
           indicator of current and future results. For illustrative purposes only.
  42       Guide to the Markets – Asia. Data reflect most recently available as of 31/03/20.
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