Investment Ratings - Palo Alto Networks (PANW) is rated Overweight with a price target (PT) of $340/share [5][19] - Target Corporation (TGT) is rated Neutral with a PT of $153/share [11][19] Core Insights - PANW shares have risen 12.4% year-to-date, performing in line with the S&P 500 index (+13% YTD) and the Nasdaq Composite index (+12% YTD) [5] - Despite a nearly 4% drop following billings weakness in F3Q'24 results, PANW is well-positioned for future growth due to better margin expansion and potential revenue recovery [5] - TGT shares have underperformed, falling almost 4% YTD, as the company faces challenges related to consumer discretionary spending and sales declines [10][11] Summary by Sections Palo Alto Networks (PANW) - The report recommends bullish investors to overlay positions with a September 13th $335/$360 strike 1x2 Call Spread Booster, indicating a 0.1% option premium against a reference price of $331.48 [5] - The implied move for PANW stands at almost 10%, which is above its 5-year (8.3%) and 10-year (8.0%) averages [3] - The valuation is based on a 31.7x EV/FCF multiple of CY24 estimates, implying a 29.6x multiple on CY25 FCF estimates, which is slightly discounted compared to peers [5] Target Corporation (TGT) - The report suggests bearish investors buy a September 13th $150/$132/$127 strike Collared Put Spread, paying a 0.2% option premium against a reference price of $135.50 [6] - TGT's implied move is almost 8%, in line with its medium-term average but above its longer-term history [10] - The team expects management to narrow down guidance for both comps and EPS, potentially leading to downward revisions and pressure on shares [11]

J.P.Morgan Asia Pacific Emerging Markets Research 12 August 2024 Korea: Customs exports rose in early August Customs exports during the first 10-days of August rose 16.7%oya, despite fewer trading days this month than a year ago. As a result, we estimate that the full-month exports should rise 21.4%oya in August vs. 13.9%oya actual growth in July. If seasonally adjusted, the first 10-day exports rebounded 5.5%m/m, sa after a 5.6% fall in July (although it is a noisy 10-day series, not the actual full month ...

Investment Rating - The report indicates a potential for a larger than previously forecasted 25 basis point cut in September, with a likelihood of 40% to 50% [2]. Core Insights - The South African Reserve Bank (SARB) has been cautious in starting an easing cycle despite diminishing local political and fiscal risks. Inflation risks are skewed to the upside, particularly due to foreign exchange pressures and services inflation [2][3]. - The near-term outlook for non-core inflation, especially transport inflation, has improved, which may lead to a reduction in headline inflation by 0.5 percentage points below the target in the next quarter [2]. - The SARB is expected to update its inflation risk assessment to a more balanced view at the next Monetary Policy Committee (MPC) meeting, potentially revising down its inflation outlook by 0.2 percentage points in the near term [2][3]. Economic Data Summary - The report highlights various economic indicators, including: - July CPI for Romania at 5.0%, down from 5.2% in June [4]. - Current account data for Turkey showing a deficit of 0.3 billion USD in January, improving from a deficit of 1.2 billion USD [4]. - A strong rebound in GDP growth for Romania is expected, driven by retail sales data, with a forecast of 6.1% growth for Q2 [4]. - The report also provides forecasts for inflation and monetary policy changes across various countries, indicating a general trend towards easing in several emerging markets [6][10]. Foreign Exchange Outlook - The report presents forecasts for various currency pairs, including: - EUR/USD expected to be 1.09 in 2024, with a slight decrease to 1.05 in 2025 [8]. - USD/ZAR forecasted to decrease from 18.37 to 17.25 by 2025 [8]. - The report indicates a general trend of currency depreciation against the USD for several emerging market currencies [8].

J.P.Morgan Global Markets Strategy 12 August 2024 EM Equity ETF Flows Daily net subscriptions/redemptions of major EM Equity ETFs – 9 August 2024 Total EM: Net redemptions of US$12mn. o EM Broad: Net redemptions of US$1mn. o EM Asia: Net redemptions of US$11mn. o Brazil: Net redemptions of US$38mn. o Mexico: Strong subscriptions of US$28mn. o China: Net redemptions of US$10mn. o Korea: Net subscriptions of US$4mn. o Equity Macro Research Rajiv Batra Ac (65) 6882-8151 rajiv.j.batra@jpmorgan.com Khoi Vu, CFA ...

J.P.Morgan Global Markets Strategy 11 August 2024 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. China Equity Data Tracker A macro and results-heavy week ahead | --- | --- | |---------------------------------------------------------------------------------- ...

Investment Rating - The report has moved from Underweight (UW) to Marketweight (MW) for Asia FX in GBI-EM [3] Core Views - Rate differentials have been a significant factor in low-yielding Asia FX, with short-term valuations correcting in funders like JPY, CNH, and THB, while MYR appears tactically rich [3] - The recent decline in USD/CNH is attributed to relative rate momentum, with Chinese corporates holding up to $300-600 billion in unsold dollars, posing a risk for further CNY strength [3][10] - The Federal Reserve is expected to cut rates more aggressively, leading to a lower year-end USD/CNY target of 7.15, down from 7.30 previously [3][17] - Geopolitical risks are highlighted as a significant factor affecting CNY FX, leading to a cautious outlook on the long-term forecast for USD/CNH [3][17] Summary by Sections Asia FX Dynamics - Asian currencies perform best in the early stages of the business cycle, requiring firmer current accounts and easier financial conditions for a sustained rally [3] - The report remains constructive on domestically oriented high yielders like INR and PHP, awaiting fairer valuations before re-engaging [3] Malaysia's Economic Outlook - Malaysia is experiencing a resurgence, driven by prudent fiscal reforms and stable politics, although significant FX hoarding remains a concern [3][40] - The MYR has rallied 6% against the USD recently, but longer-term valuations are misaligned with fundamentals due to shifts in market psychology [3][41] USD/CNH Projections - The fair value range for USD/CNH has been lowered to 6.95-7.15 from 7.18-7.25, preserving room for further downside [3][17] - The report emphasizes that the path for USD/CNY may not be linear due to geopolitical headwinds, suggesting a more cautious approach to positioning [3][17] Tactical Considerations - The report suggests that paying CNH points may be a better strategy for narrowing the US-CN yield gap in the medium term [3][17] - The report notes that increased hedging demand from corporates could pressure CNH points on the lower side, indicating a need for caution [3][17]

Global Commodities Northern summer energy demand drives down global commodity availability - in fundamental contrast to the BCOM crunch • Global commodity inventory availability declined by -0.9% MOM through July to a three-month low of 64.3 days-of-use, from 64.9 days-ofuse in June, as rising energy demand through the Northern summer and declining crude & product inventories weighed on availability. On an ExChina basis (Ex-China CIM), the monitor, which is a proxy for globally tradeable inventories, was st ...

Feedstocks for Thought European Chemicals | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------| | | | | | European Credit – Basic Resources and General Industrials | | | Ed McGuinness, CFA AC | | | (44-20) 7134-0456 ed.mcguinness ...

Investment Rating - The report maintains a Neutral investment rating across all bonds for Gerdau, indicating a cautious outlook despite strong credit metrics and liquidity [4][8][9]. Core Insights - Gerdau's results were better than expected in a challenging steel environment, with EBITDA of US$503 million falling 11% sequentially and 34% year-over-year [5][6]. - The company generated US$40 million in cash during the quarter, an improvement from a US$51 million cash burn in the previous quarter, driven by smaller working capital consumption [6][35]. - Management expects a positive outlook for most business units in the second half of 2024, with anticipated demand recovery in Brazil and North America [6][8]. Summary by Relevant Sections Financial Performance - Gerdau's EBITDA margin deteriorated from 17.4% in Q1 2024 to 15.8% in Q2 2024, reflecting pressures from pricing and costs [5][6]. - Total shipments in Brazil fell by 9% sequentially and 12% year-over-year, impacted by lower export volumes and production shutdowns [3][15]. - Average realized prices in Brazil were US$994 per ton, down 1% sequentially and 9% year-over-year, with domestic prices showing a 5% decline sequentially [15][17]. Regional Performance - North America saw a 3% sequential increase in shipments, driven by stable backlogs in key industries, but pricing was weaker, with average realized prices at US$1,180 per ton, down 6% sequentially [21][23]. - South America experienced a 10% sequential increase in shipments, but overall demand remains weak, leading to a 25% decline in EBITDA sequentially [28][29]. - The specialty steel segment showed a sequential improvement in shipments, with EBITDA rising 17% sequentially despite lower realized prices [32][33]. Management Outlook - Management is optimistic about demand recovery in Brazil's auto and construction sectors, expecting lower imports in the second half of 2024 due to government tariff adjustments [6][8]. - Cost reduction initiatives are underway, aiming for R$1 billion in savings in Brazil and R$1.5 billion company-wide [3][6]. - A new share buyback program has been approved, indicating management's confidence in future cash generation [35].

02 August 2024 J P M O R G A N Global Rates Strategy Fabio Bassi AC (44-20) 7134-1989 fabio.bassi@jpmorgan.com J.P. Morgan Securities plc Elisabetta Ferrara (44-20) 7134-2765 elisabetta.ferrara@jpmorgan.com J.P. Morgan Securities plc Overview When direction is clear, it is all about speed and destination Increasing confidence on the broad disinflation dynamic across DM has driven a repricing of monetary policy expectations, with a sharp acceleration recently on combination of central bank rhetoric and macro ...