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 does not explicitly state an investment rating for the industry or specific securities [1]. Core Insights - The analysis focuses on the spreads to Treasury Spline and Swap Analysis, indicating a detailed examination of the relative value of various securities [2][34]. - The report highlights the importance of monitoring the average spreads and their fluctuations over a 61-day data history, which is crucial for understanding market trends [3][34]. - The report emphasizes the significance of coupon rates and their impact on investment returns, particularly in the context of different maturities [12][62]. Summary by Sections Treasury Spline and Swap Analysis - The report provides a comprehensive overview of the Treasury Spline and Swap Spread, detailing various maturities and their corresponding spreads [31][34]. - It includes specific data points such as the average, maximum, and minimum spreads, which are essential for evaluating investment opportunities [36][50]. Spread to Treasury Spline - The analysis includes a breakdown of spreads to Treasury Spline, indicating the relative performance of different securities against benchmark rates [48][60]. - The report notes that the bars representing spreads are shaded to indicate significant deviations from the average, which can signal potential investment opportunities [22][41]. Interpolated Swap Spread - The report discusses the interpolated swap spread, providing insights into how these spreads relate to overall market conditions and investor sentiment [23][55]. - It highlights the importance of understanding the dynamics of swap spreads in relation to Treasury yields, which can influence investment decisions [10][37].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Reserve balances in the US have fallen to their lowest levels since 2023, now constituting around 11% of GDP, indicating a shift towards "ample" liquidity conditions [2] - Repo rates have increased since May, with SOFR settling in a new range of 5.33% - 5.35%, and daily volumes are at record highs, reflecting high demand for repo leverage [2] - The August quarterly refunding announcement introduced a recommendation for T-bills to constitute an average of around 20% of outstanding debt, which may lead to higher bill supply in the coming quarters [3] - The Treasury has ramped up its debt buyback operations, which could positively impact funding conditions by reducing dealer inventories [3] - The report anticipates that the Fed will introduce plans to wind down quantitative tightening (QT) in early 2025, concluding around mid-year [6] - Money market funds (MMFs) are expected to see moderate asset growth as the yield gap between bank deposits and money market yields remains wide [7] - SOFR is expected to rise over the coming months, potentially reaching or exceeding the IORB level in Q4 [7] - A technical adjustment to lower the ON RRP rate by 5 basis points could occur later this year if SOFR rises sustainably [8] Summary by Sections Recent Developments - Reserve balances have declined significantly, and ON RRP balances have resumed their decline [2] - Repo rates have increased, with high demand for repo leverage due to rising Treasury inventories [2] Policy and Market Outlook - QT is expected to stop when reserve balances reach around $3 trillion, with plans to wind down QT anticipated in early 2025 [6] - ON RRP usage is expected to decrease, with average daily use potentially falling to around $200 billion by mid-September [6] Money Market Funds - Moderate asset growth is expected for MMFs as the yield gap remains historically wide [7] - MMFs have been conservative on WAM extensions, leading to increased investment in repo [40] Treasury and Debt Operations - The TBAC's updated recommendation for T-bills may result in higher bill supply over the next few quarters [47] - The Treasury anticipates a reduction in the TGA from $850 billion to $700 billion, which may alleviate year-end funding pressures [3]

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific securities [1]. Core Insights - The upcoming auction on August 8, 2024, will offer $25 billion of 30-year bonds, unchanged from the previous auction [4]. - Thirty-year yields have decreased by 16 basis points from the last auction, currently trading around 4.25% [4]. - Indirect bidder participation has decreased to 60.8%, the lowest since November, while direct bidder participation has increased to 23.4%, the highest since December 2014 [4]. - Investment funds accounted for 74.5% of the total allocation, marking an increase from June's 73.4% and the highest since January [4]. - The auction had a tail of 2.3 basis points, while the previous auction had a stop-through of 1.3 basis points [4]. Summary by Sections Auction Statistics - The average size of the 30-year bond auction is $22.3 billion, with the July 2024 auction size at $22.0 billion [2]. - The cover ratio for the July auction was 2.30, slightly lower than the 1-year average of 2.39 [2]. - Direct and indirect bidders accounted for 84.1% of the total bids in July, with direct bidders at 23.4% and indirect bidders at 60.8% [2]. Auction Allotments - In the July auction, investment funds took 74.5% of the total allocation, while foreign and international bidders accounted for 7.4% [3]. - The total less SOMA for the July auction was $16.4 billion, with dealers and brokers taking $3.9 billion [3]. Bidding Aggressiveness - The auction bidding aggressiveness index indicates a more aggressive bidding environment compared to previous auctions [5][6]. Federal Reserve SOMA Add-ons - The Federal Reserve is expected to rollover $4.75 billion into its SOMA portfolio during the upcoming auction [4].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report indicates that reserve balances have fallen to their lowest levels since 2023, constituting around 11% of GDP, which is the lowest since the start of quantitative tightening (QT) [1] - Repo rates have increased since May, with the Secured Overnight Financing Rate (SOFR) settling in a new range of 5.33% - 5.35%, and daily volumes are at record highs [1] - The Federal Reserve is expected to introduce plans for winding down QT in early 2025, concluding around mid-year, contingent on market functioning [5] - Money market funds (MMFs) are expected to see moderate asset growth as the gap between bank deposits and money market yields remains wide [6] - The Treasury has ramped up its debt buyback operations, which could positively impact funding conditions by reducing dealer inventories [2] Summary by Sections Recent Developments - Reserve balances have recently fallen to their lowest levels since 2023, now around 11% of GDP [1] - Repo rates have increased, with SOFR in the range of 5.33% - 5.35% and record high daily volumes [1] - Fed funds rate remains stable despite pressures in repo markets, likely due to large liquidity held by GSEs [1] Policy and Market Outlook - QT is expected to stop when reserve balances reach around $3 trillion, with plans to wind down QT anticipated in early 2025 [5] - ON RRP usage is expected to decline, potentially falling to around $200 billion by mid-September [5] - SOFR is expected to rise, potentially above the Interest on Reserve Balances (IORB) level in Q4 [6] Money Market Funds - Moderate asset growth is expected for MMFs as the yield gap remains wide [6] - MMFs have been conservative on weighted average maturity (WAM) extensions, leading to more investment in repo [39] Treasury and Debt Operations - The TBAC recommends T-bills to constitute an average of around 20% of outstanding debt, which may increase bill supply in the coming quarters [2][46] - The Treasury anticipates a reduction in the TGA from $850 billion to $700 billion by December 31, which may alleviate year-end funding pressures [2]

Investment Rating - The report does not explicitly provide an investment rating for the US Fixed Income market Core Insights - The bullish bias for the US front-end rates is no longer valid due to a terminal rate priced slightly below reasonable neutral estimates and improved lending standards indicating a lower likelihood of recession [3][7][10] - Term premia are structurally low, suggesting a stronger case for higher long-end rates from both data and valuation perspectives [3][10] - Recent data indicates a weaker labor market, with the private sector quit rate at 2.3%, historically consistent with an unemployment rate above 4.5% [3][4] - The Fed's Senior Loan Officer survey shows improvement, weakening the bullish bias for front-end rates [6][7] - The market is pricing a terminal rate slightly below 3.25%, requiring evidence of a recession for a significant rally in front-end rates [7][10] Summary by Sections Bond Market Strategy - The rationale for maintaining a bullish front-end bias has diminished due to recent repricing and data [3] - The case for being long the front-end is more nuanced compared to previous months, with improved lending standards and a stable labor market [6][10] Macro Portfolio Update - The report outlines various trades and their rationales, indicating a shift in strategy towards maintaining positions rather than entering new ones [11] Fed Liquidity and Money Market Monitor - Repo rates have shown increased firmness, with elevated demand for leverage contributing to higher rates [13] - The Fed's QT is expected to continue until reserve balances fall to around $3 trillion, with potential adjustments to mitigate upward pressure on overnight rates [14][18] Economics - The report anticipates stable inflation data, with expectations for CPI and PPI to show similar monthly gains [35][37] - The upcoming economic calendar includes significant data points that could influence Fed rate cut discussions [38][40] Fixed Income Charts of the Week - The report includes various charts that illustrate trends in the fixed income market, including the relationship between credit spreads and potential inter-meeting cuts [21][24]