EYE ON THE MARKET • MICHAEL CEMBALEST • J.P.

MORGAN
Access our full coronavirus analysis web portal here September 27, 2021

“Dude, Where’s My Stuff?”

The global supply chain mess will require increased global vaccination and acquired immunity, semiconductor
capacity expansion and the end of extraordinary housing/labor supports to resolve. We expect all three to
occur over the next few months, leading to a global growth bounce in 2022
The containership industry is a good illustration of the supply chain mess: as shown in the first chart, more than
70 containerships are stacked up outside Los Angeles/Long Beach ports waiting to unload. Idle containerships
are back to just 3% of the total fleet, shipping costs are surging, manufacturing delivery times are extended and
rail shipments are declining sharply from their summer peak, illustrating the far reaching impact of the delays.
Anchored containerships in LA and Long Beach ports Idle containerships
Number of containerships % of global containership fleet
80 10%
70 9%

60 8%
7%
50
6%
40
5%
30
4%
20
3%
10
2%
0 1%
Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21 Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21
Source: Cornerstone Macro. September 20, 2021. Source: USDA. July 2021.

Shipping rates US rail shipments

US$ / 40ft box Index Thousands of carloads, 4 week average
$12,000 6,000 310
Container freight rate (lhs) 300
$10,000 Baltic Dry Index (rhs) 5,000 290
280
$8,000 4,000
270
$6,000 3,000 260
250
$4,000 2,000 240
230
$2,000 1,000
220
$0 0 210
2018 2019 2020 2021 2017 2018 2019 2020 2021
Source: Bloomberg. September 23, 2021. Source: Association of American Railroads. September 18, 2021.

Arrangement of freight and cargo prices (PPI) Global manufacturing delivery times
Index (100 = Dec 2008) Index
170 35
Longer lead times
160
40
150

140 45
130

120 50

110
55
100
Shorter lead times
90 60
2009 2011 2013 2015 2017 2019 2021 1998 2002 2006 2010 2014 2018 2022
Source: Bloomberg. August 2021. Source: Bloomberg, JP Morgan Economic Research. August 2021.

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EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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Why so many bottlenecks? Supply chain disruptions due to shipping cost discrepancies
COVID has disrupted supply chains in two major ways: surging demand for imported consumer goods in the
West due to pandemic work from home trends and home improvement spending, and a decline in workers
required to maintain and operate these supply chains. The surge in US import demand has led to a sharp rise
in eastbound freight rates (see charts for Shanghai->LA and Shanghai->Rotterdam). However, westbound
freight rates have not risen nearly as much, leading to an odd and problematic phenomenon: incentives for
container owners to move them back to China empty to accelerate receipt of eastbound freight rates, instead
of waiting for containers to be refilled to earn westbound freight rates as well. This is illustrated in the fourth
chart which shows departing containers from LA/LB: a lot of them started leaving empty once eastbound freight
rates surged. This further exacerbates supply chain issues, since US goods (i.e., grains) that were supposed to
depart US railcars and warehouses for export remain in place, occupying space that US imported goods were
destined for.
A surge in US goods spending Container freight rate between LA and Shanghai
Difference in rolling 5 quarter growth rates, goods - services US$ / 40ft box
25% $14,000
Shanghai to Los Angeles
20% $12,000 Los Angeles to Shanghai
15%
$10,000
10%
$8,000
5%
$6,000
0%

-5% $4,000

-10% $2,000
-15% $0
1950 1960 1970 1980 1990 2000 2010 2020 2012 2014 2016 2018 2020
Source: BEA, JPMAM. Q2 2021. Source: Bloomberg. September 23, 2021.

Container freight rate between Shanghai and Rotterdam Los Angeles / Long Beach empty vs loaded container
US$ / 40ft box exports, 20-foot-equivalent units
$16,000 800,000
Shanghai to Rotterdam Empty containers
$14,000 Rotterdam to Shanghai 700,000
Loaded containers
$12,000 600,000

$10,000 500,000

$8,000 400,000

$6,000 300,000

$4,000 200,000

$2,000 100,000

$0 0
2012 2014 2016 2018 2020 Jan '19 Jun '19 Nov '19 Apr '20 Sep '20 Feb '21 Jul '21 Dec '21
Source: Bloomberg. September 23, 2021. Source: Port of Los Angeles and Long Beach. August 2021.

2
EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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The other big bottleneck: the semiconductor shortage

Semiconductors are the world’s 4th most traded good after crude oil, refined oil and cars. Strong demand existed
before COVID and reflected the chip-intensity of 5G, AI, electric vehicles (3-5x the chip content of ICE cars) and
the internet of things. Current chip shortages are mostly related to older and simpler 200-mm silicon wafers
used in cars, computers, monitors, laptops, TVs, refrigerators and washing machines. Demand for many of
these items soared during the pandemic as people built out home offices and related projects; this surge in
demand is illustrated below via the rise in Taiwanese electronic component exports. One by-product of the
shortage: a rise in US auto manufacturer inventories and a collapse in dealer inventories as manufacturers
wait for the chips they need. Auto consulting firm Alix now estimates that the semiconductor shortage will cost
US auto manufacturers $210 bn this year, up from their $60 bn estimate back in January. Ford is actually offering
customers faster delivery if they agree to “lower feature content”, which translates into fewer semiconductors.
There’s limited economic incentive to build new 200-mm chip plants given wafer-thin margins; only a handful
of new ones are planned for 2022. Even so, there’s a few billion dollars being invested to expand capacity by
~20% in existing plants, in which case the semiconductor squeeze may start to ease by Q2 2022. Auto
manufacturers are also discussing longer term contracts with Tier 2 suppliers that might incent them to build
out new 200-mm capacity. As shown below, adding capacity to existing factories will take a few months at least,
in which case the semiconductor shortage will drag on into next year.
Taiwan exports of electronic components US auto manufacturer vs dealer inventories
Index (100 = Q4 2019) Real inventory/sales ratio, index (100 = Jan 2005)
150 250
Manufacturers
225
125 Wholesalers
200
Dealers
100
175

75 150

125
50
100
25
75

0 50
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2005 2007 2009 2011 2013 2015 2017 2019 2021
Source: Ministry of Finance, JPMAM. August 2021. Source: Gavekal, BEA, JPMAM. June 2021.

Semiconductor fab capacity utilization rate Semiconductor shortage solutions

% Tier 1 suppliers Silicon design Silicon manufacturing
100%
Redesign the part and switch suppliers
95%
Move to a different factory
90%

Increase factory utilization to maximum capacity

85%

80% Add capacity to factory

75% Build a new factory

70% 0 4 8 12 16 20 24 28 32 36
Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Months required
Source: Suttle Economics, SIA. 2021. Source: Bain. June 2021. Dotted bars indicate high end estimates.

3
EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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Note that global supply chain problems are not getting better as growth momentum slows, since production
growth is declining as fast as new order growth. For all the clients that have asked me about the political and
economic problems associated with the rise of autonomous vehicles and more unemployed truckers, I keep
telling them they’ve got it backwards: the US has had a trucker shortage for the last few years, and it’s
projected to get worse. In other words, COVID has worsened some existing vulnerabilities in the US supply
chain, just as global trade is surging. As for the August US inflation report in which CPI came in lower than
expectations, that was mostly a function of COVID related declines in airfare, lodging and rental cars. These
categories will probably bounce back when the Delta wave fades, and the other categories are still rising sharply.
Global manufacturing survey (PMI) US truck driver shortage
50+ = expansion Thousands of drivers
60 180
New orders
160
55
140
Production
50 120
100
45 80
60
40
40
35 20
0
30
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21
Source: Bloomberg. August 2021. Source: American Trucking Associations. 2019. Dotted bars = forecasts.

Global trade volume Core CPI components

Index (100 = Jan 2015) annualized m/m % change annualized m/m % change
120 120% 6%
COVID-19 basket (lhs)
115
100% Other (rhs) 5%
110 Owners' Equivalent Rent (rhs)
80% 4%
105
60% 3%
100
40% 2%
95
90 20% 1%
85 0% 0%
80 -20% -1%
75 -40% -2%
70 Jan '19 Jul '19 Feb '20 Aug '20 Mar '21 Sep '21
2007 2009 2011 2013 2015 2017 2019 2021 Source: Suttle Economics, BLS, JPMAM. August 2021. COVID-19 basket
Source: CPB. June 2021. includes: apparel, lodging, airline fares, used cars, car insurance/rental.

4
EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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Bottleneck resolution
First, the world is going to need more containers, which carry more than 90% of the world’s traded goods.
Chinese companies affiliated with its government make 95% of the world’s containers and have ramped up
production. The number of containerships in service is rising as well, albeit more slowly; again, China stands to
benefit as the world’s largest shipbuilder (37% of the shipbuilding market in 2019 by deadweight, and 45% of
all new shipbuilding orders). Another example of how China continues to reap unforeseen economic gains from
COVID; another is the rise in global export market share that China has gained vs its Asian export competitors.
China container production Global containerships in service
Million cubic meters Index (100 = Jan 2015)
25 110

105
20
100
15 95

90
10
85
5
80

0 75
2007 2009 2011 2013 2015 2017 2019 2021 2007 2009 2011 2013 2015 2017 2019 2021
Source: Bloomberg. August 2021. Source: Bloomberg. August 2021.

But more containers and containerships won’t solve problems in the West unless other supply chain issues
are resolved as well. That will probably require (a) an end to extraordinary housing and income support
measures, and (b) less community spread and concern about COVID. So far, most analyses show very little job
growth differentials between US states that terminated subsidies vs those that didn’t 1. That said, some
forecasts call for 1.3 million new jobs by year-end due to expiring unemployment benefits and another 300,000
new jobs due to school reopening. Around 2/3 of continuing claimants receive some pandemic unemployment
assistance, which is another sign that such benefits are impacting the labor force participation rate.
2021 payroll gains with Sep-Dec forecasts Ratio of continuing claims to job openings (US)
Thousand jobs 7x
1,100 Claims under pandemic assistance programs
6x Continuing claims
1,000
900
5x
800
700 4x
600
500 3x
400
2x
300
Other
200 School reopening 1x
100 Unemployment benefit expiration
Total payroll gains 0x
0
Jan '20 May '20 Sep '20 Jan '21 May '21
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: GS. September 13, 2021. Bars represent forecasts. Source: Department of Labor, BLS, JPMAM. July 2021.

1
“Estimating the Impact of Unemployment Insurance Benefit Expiration on Employment Using August
Microdata”, Joseph Briggs, Goldman Sachs, September 16, 2021.
5
EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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The federal foreclosure moratorium officially ended on July 31. However, we don’t anticipate a sharp rise in
new foreclosure filings due to a CFPB rule issued in June that established procedural safeguards that have to be
met before foreclosures can begin (hurdles are hard to meet and include provisions that a property has to be
abandoned, or that the servicer hasn’t heard from the borrower for an extended period). The new rule expires
in December 2021, after which normal foreclosure patterns might resume. Foreclosures fell close to zero in the
US once the moratorium was put in place. The second chart shows the gap between the MBA definition of
delinquency which defines deferred payments as delinquent, and the Fed definition which does not. See
Appendix on page 9 for a discussion of homeowner vs renter treatment.
One more thing on housing: read about the issues with LoanDepot. So, one of many undercapitalized fintech
lenders (most of whom have limited special servicing capabilities) allegedly processed thousands of loans
without required documents such as employment and income verifications? Color me unsurprised 2.
US home foreclosures Mortgage delinquency rates depend on treatment of
Thousands forbearance plans, Delinquency rate
600 12%

500 10% Mortgage Bankers

Association
delinquency rate
400 8%

300 6%

200 4%

100 2%
Fed delinquency rate
0 0%
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Bloomberg, Federal Reserve. June 2021. Source: Bloomberg. Q2 2021.

Housing and income policy may have to normalize before labor supplies do. As shown below, G7 manufacturing
wages are rising at a very high rate given the prevailing level of unemployment, another sign of labor markets
whose supply-demand equilibrium has shifted. By the way, I find it interesting that some people arguing for
continued extension of COVID benefits also argue for the largest amount of new Congressional spending ($3.5
trillion), without explaining what that might do to current labor shortages, where all these new workers are
supposed to come from and how all that spending might impact inflation and Fed policy. In August, 50% of small
business owners said they had job openings they already couldn’t fill, the highest level on record.
G7 unemployment and earnings US small businesses with hard to fill job openings
y/y % change % % of small business survey respondents
5% Hourly earnings in manufacturing (lhs) 9% 55%
Unemployment rate (rhs) 50%
4%
8% 45%

3% 40%
7% 35%
2% 30%
6% 25%
1%
20%
5% 15%
0%
10%
-1% 4% 5%
Jul '01 Jul '05 Jul '09 Jul '13 Jul '17 Jul '21 1985 1990 1995 2000 2005 2010 2015 2020
Source: OECD. July 2021. 3 month average. Source: Bloomberg, NFIB. August 2021.

2
According to a paper released by the Philadelphia Federal Reserve, 70% of the massive rise in fintech loans is
simply due to regulatory arbitrage rather than fintech lenders having superior technology or lower costs. Also:
shadow banks now control the riskiest segment of the market (FHA). You get what you pay for. See “Fintech,
Regulatory Arbitrage and the Rise of Shadow Banks”, Buchak et al, NBER, 2017.
6
EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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As for COVID, concerns may dissipate in the next few months. As we explained on our August webcast, this
fall was going to be a very bad one in the US. Even so, given the high degree of Delta variant contagiousness, a
combination of vaccination and acquired immunity should drive down pandemic measures substantially by
November. The latest infection and hospitalization data from Hotspot states, horrific as they are (i.e., the
world’s highest reported mortality rate) are beginning to roll over; mortality should follow. For anyone that
disbelieves COVID mortality data, see the sixth chart below: there has been another surge in mortality from all
causes in the US relative to seasonal trends. If you can think of another reason for this other than COVID, please
let me know. The biggest risk to this outlook is fading immunity of vaccinated people; we will know over the
next couple of months how this plays out in the US. Booster shots in Israel appear to drive antibody levels up
substantially, and also result in Pfizer efficacy vs severe infection that rises above 90% again.
Developed regions Hotspots: AL AK FL GA KY SC TN WV WY
500 8 1,200 16
450 7 Daily infections # per mm (LHS) 14
400 Daily infections # per mm (LHS) 1,000
6 12
350 800 Current hospitalizations # per mm (LHS)
300 5 10
Daily deaths # per mm (RHS)
250 4 600 Daily deaths # per mm (RHS) 8
200 3 6
150 400
2 4
100 200
50 1 2
0 0 0 0
02/20 05/20 08/20 11/20 03/21 06/21 09/21 02/20 05/20 08/20 11/20 03/21 06/21 09/21
Source: JHU, IMF, JPMAM. Sep 25, 2021. 7 day smoothing. Source: JHU, IMF, HHS, JPMAM. Sep 25, 2021. 7 day smoothing.
25 highest mortality rates vs Dev World ex-US Israel
Daily deaths, # per mm; US states, top 50 countries by GDP
25 1,400 8
US States Daily infections # per mm (LHS) 7
1,200
20 Countries
6
1,000 Current hospitalizations # per mm (LHS)
5
15 800
Daily deaths # per mm (RHS) 4
Dev World ex-US

600
3
10
South Carolina

North Carolina

400
West Virginia

2
Washington
Tennessee
Mississippi

Oklahoma
Louisiana

Wyoming

Arkansas
Kentucky
Alabama

Montana

200
Missouri

5 1
Georgia

Nevada

Arizona
Indiana
US hot
Florida

Alaska
Texas
Idaho

MAL

0 0
US

0 02/20 05/20 08/20 11/20 03/21 06/21 09/21

Source: Johns Hopkins University, IMF, JPMAM. September 26, 2021. Source: JHU, IMF, OWID, JPMAM. Sep 25, 2021. 7 day smoothing.

US daily vaccinations Tracking US excess deaths from COVID

Millions of people, 7-day average Total deaths per week
3.5 90,000
Actual deaths from all causes
3.0 Threshold for excess deaths
80,000
2.5 Full
vaccinations 70,000
2.0 (2nd of 2 doses)
1.5 Full 60,000
vaccinations Booster
1.0 (1 dose) shots
50,000
0.5 Partial vaccinations
(1st of 2 doses) 40,000
0.0 2017 2018 2019 2020 2021
1/7 1/28 2/18 3/11 4/1 4/22 5/13 6/3 6/24 7/15 8/5 8/26 9/16
Source: CDC, JHU, JPMAM. September 18, 2021. Dots are estimated using
Source: OWID, JPMAM. September 25, 2021. most recent JHU data.

7
EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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Developing world infections and mortality are declining due to exhaustion of Lambda and Gamma variants in
Latin America and the decline in the Delta variant in Asia (although mortality is rising in Eastern Europe again).
Many Asian countries have higher COVID stringency rules than developed countries, an indication of how
seriously govt’s view the risks and the ability of their healthcare systems to respond to it. Emerging markets are
not the epicenter of most supply chain problems, at least as measured by supplier delivery times. But countries
like Malaysia play an outsized role in the semiconductor food chain due to its role as a major center for chip
testing and packaging, the last step in the semiconductor food chain which is also more labor-intensive than
automated wafer fabrication. The delta variant has caused Infineon, NXP and STMicroelectronics shutdowns in
Asia, which resulted in component shortages at Nissan, Toyota, Ford and GM operations elsewhere. Malaysia
is also a large producer of multilayer ceramic capacitors, used in smartphones and cars.
Some good news on Asia. As noted above, infections and mortality are finally rolling over. Vaccination rates
have hit 70% in Malaysia; while they are still less than 50% in Indonesia, Thailand, Philippines and Vietnam,
acquired immunity appears to be playing a role now as well. Furthermore, mRNA vaccines should make greater
inroads in the entire region in 2022, displacing Chinese vaccines with lower observed efficacy 3. Finally, capital
flows are returning in anticipation of less severe bottleneck issues ahead.
Emerging markets COVID trends Country vaccination rates
Daily deaths, # per mm, smoothing = 7 days Unique people vaccinated as % of population
10.0 80%
E Europe
9.0 70%
8.0 Latin America
60%
7.0 EM Asia 5 (Indo, Thai, Mal, Phil, Viet)
6.0 M East 50%
5.0 40%
4.0
South Korea

Netherlands

Philippines
30%
3.0

Indonesia
Germany

Australia
Malaysia

Thailand

Vietnam
Taiwan*
Canada

2.0 20%

Mexico
France

Russia
India
1.0 10%
UK

US
0.0
02/20 05/20 08/20 11/20 03/21 06/21 09/21 0%
Source: Johns Hopkins University, IMF, JPMAM. Sep 26, 2021. Source: OWID, JPMAM. September 25, 2021.

Oxford lockdown stringency index EM capital inflows

Index, 100 = highest level of lockdown US$, billions, cumulative flows since Sept 2013
90 $250
Total (bonds + equity)
80 $200
$150 Equity
70
$100 Bonds
60
US state composite

50 $50

40 $0
South Korea

30 -$50
Singapore
Indonesia

Germany
Australia
Malaysia

Vietnam

-$100
Canada

Taiwan
Mexico

20
France

Japan
China

Spain
India

-$150
Italy

10
UK

-$200
0
Sep '13 Sep '15 Sep '17 Sep '19 Sep '21
Source: University of Oxford, JPMAM. September 26, 2021. Source: EPFR, JPMAM. August 2021.

3
“Ravaged by Delta outbreak, Southeast Asia shifts away from China’s vaccines”, Washington Post, August 10
8
EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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Appendix: Homeowners vs Renters and US housing policy

• As discussed on page 6, the federal foreclosure moratorium has expired and there are safeguards in place
which should keep the number of foreclosures low until early next year when a CFPB rule expires. The
federal eviction moratoria are separate policies; some have already expired, while GSE and FHA versions
will expire at the end of September. Eviction rules cover renters and homeowners, while foreclosure rules
only apply to homeowners. Several Democratic Senators have introduced legislation to reinstate federal
eviction moratoria after the Supreme Court ruled that the CDC overstepped its authority in mandating it
• States can apply their own foreclosure and eviction moratoria alongside the federal government; banks are
required to follow both. There are currently live foreclosure moratoria in NY, Oregon and DC
• While federal eviction moratoria prohibited evictions of renters and homeowners, the treatment for
missed payments is different. For example, delinquent renters at the end of the moratorium are treated
differently than homeowners who missed payments while in a CARES Act forbearance. Homeowners with
federally backed mortgages (or with mortgages from banks applying this approach to all borrowers at their
discretion) are allowed to defer missed payments and are not considered to be delinquent. In these cases,
homeowners that don’t pay will not face immediate payment of accrued balances, which in most cases will
be added as a balloon at the end of their mortgages. Banks generally record unpaid interest as current on
an accrual basis. Finally, there are programs in place to modify mortgages for borrowers unable to resume
their prior payments due to financial distress.
• Renters, however, are not explicitly allowed to defer; the eviction moratorium simply prohibits landlords
from evicting them for non-payment. Renters could face immediate payment of accrued amounts, with
any negotiated terms up to the landlord. In addition, non-payment could affect a renter’s credit score,
while the same is usually not the case with homeowners under the circumstances outlined above.
• The Federal Emergency Rental Assistance program made $47 billion in funding available for tenants and
landlords to be distributed by states and local governments. This funding was aimed at helping tenants cover
rent, back rent and utilities as well as helping landlords cover mortgage payments. However, only $5 billion
of this program was distributed as of July 2021.
• The National Equity Atlas estimated that as of mid-August 2021, 15% of renters (5.9 million renter
households) were behind on rent payments. This compares to ~7% of renters unable to pay rent in 2017.
• Landlords who hold federally backed mortgages were eligible for the federal mortgage and foreclosure relief
programs, which were extended through June 30, 2021.
• In addition, some states established their own rental relief programs. For example, New York’s landlord
loan program provides loans to small landlords with a loss of rental income, and California’s rental assistance
program helps both tenants and landlords cover rent and mortgage payments at the expiration of the
eviction and foreclosure moratorium
Estimates of delinquent renters and outstanding payments
Dec '20 Jan '21 Feb '21 Mar '21 Apr '21 May '21 Jun '21
Delinquent rent, utilities & late fees ($, billions) $44.1 $52.6 $36.3 $31.9 $34.9 $38.5 $41.2
Number of delinquent renters (millions) 8.8 9.4 7.3 6.0 6.3 6.6 6.7
Amount delinquent per renter ($) $5,015 $5,586 $4,964 $5,282 $5,499 $5,854 $6,148
Average months delinquent 3.4 3.8 3.4 3.6 3.8 4.0 4.2
Source: Census Pulse Survey, BLS CES, Census HVS, Equifax, Moody's Analytics. Based on Moody's Analytics' February 2021
baseline economic outlook; assumes no additional fiscal relief; includes all delinquent renters, not just renters impacted directly by
the pandemic.

9
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(Asia) Limited, each of which is regulated by the Securities and Futures Commission of Hong Kong; JPMorgan Asset Management (Singapore) Limited (Co. Reg. No.
197601586K), which this advertisement or publication has not been reviewed by the Monetary Authority of Singapore; JPMorgan Asset Management (Taiwan)
Limited; JPMorgan Asset Management (Japan) Limited, which is a member of the Investment Trusts Association, Japan, the Japan Investment Advisers Association,
Type II Financial Instruments Firms Association and the Japan Securities Dealers Association and is regulated by the Financial Services Agency (registration number
“Kanto Local Finance Bureau (Financial Instruments Firm) No. 330”); in Australia, to wholesale clients only as defined in section 761A and 761G of the Corporations
Act 2001 (Commonwealth), by JPMorgan Asset Management (Australia) Limited (ABN 55143832080) (AFSL 376919). For all other markets in APAC, to intended
recipients only.

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In the United States, bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member
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Products not available in all states.
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EYE ON THE MARKET • MICHAEL CEMBALEST • J.P. MORGAN
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España is registered under number 1516 within the administrative registry of the Bank of Spain and supervised by the Spanish Securities Market Commission
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Frankfurt, Germany, jointly supervised by the Commission de Surveillance du Secteur Financier (CSSF) and the European Central Bank (ECB), and in certain areas
also supervised by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). In Italy, this material is distributed by J.P. Morgan Bank Luxembourg S.A– Milan
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In the Netherlands, this material is distributed by J.P. Morgan Bank Luxembourg S.A., Amsterdam Branch, with registered office at World Trade Centre, Tower
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Commission de Surveillance du Secteur Financier (CSSF) and jointly supervised by the European Central Bank (ECB) and the CSSF in Luxembourg; J.P. Morgan Bank
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Netherlands. Registered with the Kamer van Koophandel as a branch of J.P. Morgan Bank Luxembourg S.A. under registration number 71651845. In Denmark,
this material is distributed by J.P. Morgan Bank Luxembourg, Copenhagen Br, filial af J.P. Morgan Bank Luxembourg S.A. with registered office at Kalvebod Brygge
39-41, 1560 København V, Denmark. J.P. Morgan Bank Luxembourg, Copenhagen Br, filial af J.P. Morgan Bank Luxembourg S.A. is authorized and regulated by
Commission de Surveillance du Secteur Financier (CSSF) and jointly supervised by the European Central Bank (ECB) and the CSSF. J.P. Morgan Bank Luxembourg,
Copenhagen Br, filial af J.P. Morgan Bank Luxembourg S.A. is also subject to the supervision of Finanstilsynet (Danish FSA) and registered with Finanstilsynet as a
branch of J.P. Morgan Bank Luxembourg S.A. under code 29009. In Sweden, this material is distributed by J.P. Morgan Bank Luxembourg S.A., Stockholm
Bankfilial, with registered office at Hamngatan 15, Stockholm, 11147, Sweden. J.P. Morgan Bank Luxembourg S.A., Stockholm Bankfilial is authorized and regulated
by Commission de Surveillance du Secteur Financier (CSSF) and jointly supervised by the European Central Bank (ECB) and the CSSF. J.P. Morgan Bank Luxembourg
S.A., Stockholm Bankfilial is also subject to the supervision of Finansinspektionen (Swedish FSA). Registered with Finansinspektionen as a branch of J.P. Morgan
Bank Luxembourg S.A. In France, this material is distributed by JPMorgan Chase Bank, N.A. (“JPMCB”), Paris branch, which is regulated by the French banking
authorities Autorité de Contrôle Prudentiel et de Résolution and Autorité des Marchés Financiers. In Switzerland, this material is distributed by J.P. Morgan
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Dealing and advisory services and discretionary investment management services are provided to you by JPMCB, Hong Kong/Singapore branch (as notified to
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JPMorgan Chase Bank, N.A. (JPMCBNA) (ABN 43 074 112 011/AFS Licence No: 238367) is regulated by the Australian Securities and Investment
Commission and the Australian Prudential Regulation Authority. Material provided by JPMCBNA in Australia is to “wholesale clients” only. For the
purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Corporations Act 2001 (Cth). Please inform us if
you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.
JPMS is a registered foreign company (overseas) (ARBN 109293610) incorporated in Delaware, U.S.A. Under Australian financial services licensing
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Corporations Act 2001 (Cth) (Act) in respect of financial services it provides to you, and is regulated by the SEC, FINRA and CFTC under U.S. laws,
which differ from Australian laws. Material provided by JPMS in Australia is to “wholesale clients” only. The information provided in this material is not
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paragraph the term “wholesale client” has the meaning given in section 761G of the Act. Please inform us immediately if you are not a Wholesale Client
now or if you cease to be a Wholesale Client at any time in the future.
This material has not been prepared specifically for Australian investors. It:
• May contain references to dollar amounts which are not Australian dollars;
• May contain financial information which is not prepared in accordance with Australian law or practices;
• May not address risks associated with investment in foreign currency denominated investments; and
• Does not address Australian tax issues.

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