JPM JPM US Market Intell

IDEAS & INSIGHTS – IN BRIEF • MKT THOUGHTS – Tech-led rally; Macro views; First take on AAPL/AMZN from JPM Spec Sales team. • TRADING DESK VIEWS ON TECH RALLY YDAY • NEW POSITIONING INTEL – Tactical Takes | Extreme De-Grossing WTD...Signs We're Likely at Low in NT for De-Gross and Momentum • US MKT INTEL VIEW – Tactically Bullish and we update the Monetization Menu • GLOBAL MKT INTEL – Our Monthly Thematic Pulse is here; we look at Global Tech, Semis, and Flows across Thematics.

JPM MARKET INTEL MORNING UPDATES • SPX +0.4%, NDX +1.1%, RTY +0.5%. WTI +45bps at $83.97, NatGas +237bps to $2.73, UK NatGas +265bps to £1.4625, Gold -116bps to $4,056, Silver -170bps to $57.98, 10Y @ 4.669%, and VIX @ 16.85. • US: Futures are higher led by Tech. Thursday’s tech-led recovery continued into the overnight session in Asia with Taiwan and KOSPI up 8% and 18%, respectively. Earnings after Thursday’s close were largely positive: AMZN was the key highlight as the firm reported strong AWS sales and margin; AMZN +13% pre-market, but AAPL’s weak guidance drove a 7% decline after close. Bond yields were largely unchanged; USD was up. Metals were mixed: gold fell 1.2%, while copper were up 1.6%. • EU/UK: Major markets are higher led by SX5E. Momentum and Semis recovery were the main theme for today’s trading session. Thematically, Semi, Renewables, Momentum Long and Cyclicals were among the top performing baskets. On YoY basis, Eurozone Headline CPI prints 2.9% vs. 2.8% prior, in line with the Street consensus. Core CPI prints 2.5% vs. 2.4% survey vs. 2.4% prior. UKX +0.6%, SX5E +0.9%, SXXP +0.6%, DAX +0.7%.

• US MACRO DATA: Employment Cost Index at 8.30am ET. Chicago PMI at 9.45am ET. Univ of Michigan data at 10am ET. • US EARNINGS: ABBV, AES, AMG, ARES, BEN, BTSG, CABO, CBIO, CBOE, CL, CVX, D, DFTX, DJT, ECHO, LIN, LYB, MRNA, RBC, RIOT, RKT, ROKU, TROW, TXNM, WSC, XOM. • GLOBAL MACRO DATA: BOJ Decision. Eurozone – CPI. Japan – Housing Starts. UK – Housing Price Index. Germany – unemployment rate. France – CPI, PPI.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE The full tech-led rally yesterday continued into the overnight session in Asia and the pre-market session today. Notably, KOSPI rebounded 18% from the low. In the US, we started to see Mag 7 earnings getting rewarded on the earnings beat: yesterday’s AMZN earnings was a clear example as the stock has rallied 13% on AWS revenue and operating margins beat, despite higher CapEx outlook.

Aside from tech, growth and spending outlooks from yesterday’s macro data releases and recent earnings commentary both pointed to solid US consumer health, supporting the economic growth and earnings, with inflation remaining the key risk. In addition, our Positioning Intel team also notes that they are now seeing multiple signs of extremes that suggest that the de-gross and momentum sell-off could abate very soon.

Taken all together, we shall expect the optimism to extend into today’s session, though keep an eye on Iran/geopolitical headlines into the weekend given the recent oil volatility.

• QUICK TAKE ON AMZN AND APPL EARNINGS – Below are shared by JPM Spec Sales team; excerpts below o AMZN (MARK SCHILSKY) – EPS Estimates are Going Higher: Yes, I could have titled this earnings review ‘AWS Beats’ because it surely did, but I think the ‘real’ highlight of this print is the fact that Operating Income beat the high end of the guide by $3.5B (largely due to an AWS Revenue and Margin beat). Buyside/Sell Side EPS estimates are going higher – and so too is the stock, now up +6% after hours (on the back of a +4% day). The hyperscalers are making a comeback. ▪ AWS Revenue grew +37% Y/Y (technically, 36.7% Y/Y), eclipsing my original bogey of +35% Y/Y (and some would have said it was 1 point higher post-MSFT). Regardless of your view, this is a beat. ▪ AWS Operating Margins were a touch over 39% which is quite frankly fantastic.