JPM JPM International Ma

• Iran surprise attack is not retaliatory so a bit different while rejection of Omani proposal to share SoH indicates the final objective. Our view on the outcome is unchanged. In any case, this is not the market’s PC1. • Meanwhile, the Bundesbank explains GE econ resilience to the conflict and noted that GE exporters may have benefited as Asian competitors were more affected by bottlenecks.

• Focus remains firmly on the AI/Tech/MOMO unwind, and the miss in Korean memory did not help this am. Our July Thematic Pulse reviews the evolving Tech/AI landscape and includes a bull/bear framework for Semis, alongside our regular update on thematic flows. • Key concerns include competitive threats from China — open-source models and DUV production, even as China SPEs are down again today — as well as circular financing and the role of leverage. The widening in NVDA CDS, as the receiver of capex with rising FCF, is more concerning than the move in hyperscalers’ CDS. • That said, Crowding & the Butterfly Effect remain the main story. It feels increasingly likely that we are late stage in this process, but we maintain factor hedges because crowding risk has not fully cleared on our books. It is worth considering whether another leg lower from here could come with a more pronounced pickup in index correlation. Focus on FOMC (Drew’s scenarios are here) + MSFT + META today.

• Speaking of broadening, JPM Equity Strategists believe Healthcare could be approaching a more durable inflection point, supported by valuations, flows, positioning, 2027 earnings acceleration, a potential gridlock in the upcoming midterms, and a low bar for upside surprises from AI-driven productivity gains. This reinforces the upside case we made in this email on Jul 2nd.

• Global industrial policy was the focus of our June Thematic Pulse, and two related themes are now gaining traction. The US is considering bans on Chinese imports of humanoid robots and solar

inverters, while Germany is mapping China’s vulnerabilities as it prepares for potential trade confrontation.