JPM International Market Intelligence | Morning Briefing: Cyclical and Secular themes in focus

20 SECONDS: Cyclical and Secular themes in focus. Rates are the known risk to watch. Japan vs EU Banks. Our view of Tech on its way up. Anthropic S1 could be next major event for AI. Barrage of thematic updates from JPM.

• APAC and EU/US are in the green ahead of a fairly quiet week – see VIXEQ. This am, the desk is seeing memory clearly back in favour while backwardation signals intense competition for Copper.

• Anthropic is projecting 2028 revenue of ~$190-200B (vs $47B run rate in May) and the public release of the S1 could be the next major event for global AI.

• Nothing particular incremental from the ME. Covert oil flows keep global prices in check. Fresh eco measures against Iran are likely this week.

• Cyclical and Secular Themes remain at a nice intersection.

• The big picture is supportive and JPM Econ outlook is for a cyclical lift to above-trend growth as broadening in business spending includes a pickup in hiring.

• Rates are the known risk to watch, particularly at the long end where positioning is less short.

• Within cyclical trades, I’d lean on Japan vs EU banks right now given positioning and dislocation to rates screen better on the former. EU politics ahead of key elections in 1H27 can also surface going into Sep.

• Secular themes price-in less. See our recent emails on Gold; Modern Warfare & KOSPI2.

• With the AI/MOMO correction over, our view is that Tech is on its way up but we expect higher participation and thematic dispersion. 1) Bottlenecks and AI hardware are bouncing as AI fundamentals haven’t changed (that includes Memory); 2) Hyperscalers may benefit from improved narrative around capex ROI– China Cloud in focus too as earnings come through; 3) LLM commoditization & cost considerations –favouring established vendors that can deploy, maintain, and take ownership of solutions – help Software strength & high dispersion.

• Meanwhile, a barrage of thematic reports is out from JPM Research this am. In EU, we have Mislav and Phil. In Asia, one update on LLMs and spotlight on Phyisical AI.