JPM JPM US Market Intelligence Afternoon Briefing Sept 22

IDEAS & INSIGHTS – IN BRIEF • MARKET UPDATES – Fedspeak, US/Iran, price actions today. Views from Co-head of global high touch trading Ron Adler and JPM Financial Specialist Rob O'dwyer. • TRADING DESK COMMENTARY – Desk commentary on Tech and Consumer • US MKT INTEL VIEW – We maintain our Tactically Cautious / Neutral view into the Fed, plus we update the Monetization Menu

AFTERNOON UPDATES (NEWS LINKS) • SPX -0.0%, NDX +0.8%, RTY +0.5%. WTI -124bps at $94.59, NatGas +645bps to $3.02, UK NatGas -171bps to £1.7850, Gold +33bps to $4,358, Silver +159bps to $67.08, 10Y @ 4.959%, and VIX @ 14.21. • US: Stocks were mixed with SPX flat and NDX outperforming. The return of the +Semis/-AI Vulnerable trade post Meta Muse release was the key theme of today’s session, particularly in Financials (XLF -2% today). Following Monday’s price action, the broader AI leadership continued to carry semis (SOXX +2.4%) and memory (DRAM +3.3%) higher. Oil fell 1.2% despite a volatile session amid mixed headlines: (i) Iran’s conditional offer to open the Strait within 7 days; (ii) Rubio saying 60-70% of oil flow is coming out; (iii) Trump again reiterated a possible peace deal after midterms. The decline in oil prices drove outperformance across homebuilders, airlines and retail. Yields were largely unchanged. Tomorrow, we will receive global PMIs. • EU/UK: European equity markets finished modestly higher led by France. Thematically, Semis continued yesterday’s rally, while lower oil prices supported broader cyclicals. Ceasefire, Stagflation Short and Consumer Recovery were among the best-performing baskets. Sector leadership tilted toward retail, travel and tech, while energy, insurance and telecom lagged. Bond yields were 1-3bp higher across the curve. Overall, price action was supported by signs of

improving oil flows and diplomatic hopes, but investors were awaiting clearer confirmation and incoming PMIs. UKX -0.3%, SX5E +0.1%, SXXP +0.1%, DAX +0.0%.

CATALYSTS TOMORROW (FULL WEEK CALENDAR) • US MACRO DATA TOMORROW: Mortgage Applications at 7am ET. PMI-Mfg, PMI-Srvcs and PMI-Composite at 9.45am ET. Xi is scheduled to arrive in DC on Sep 23. • US EARNINGS TOMORROW: CTAS, GIS, PAYX • GLOBAL MACRO DATA TOMORROW: (France) PMIs at 3.15am ET. (Germany) PMIs at 3.30am ET. (Eurozone) PMIs at 4am ET. (UK) PMIs at 4.30am ET. (Japan) PMIs at 8.30pm ET.

JPM MARKET INTEL EQUITY & MACRO NARRATIVE

TODAY • PRICE ACTIONS TODAY – The selloff in Financials and the continued post-Meta Muse AI rally was the main theme for trading today. It was particularly interesting when comparing the price action in Software (IGV -0.4%) and Financials (XLF -2.0%). While we are witnessing another return of the +Semis/-AI Vulnerable trade, it seems like there has been a rotation across the AI Vulnerable baskets themselves. Below are two helpful pieces from our Financials Specialist Rob O'Dwyer on today’s price action (he remains constructive on the sector) and thoughts on the Meta Muse launch from co-head of JPM Global high touch trading Ron Adler. • FEDSPEAK TODAY – Barkin’s speech today was largely in line with recent Fedspeak, suggesting inflation risks are outweighing employment risks and seeing signs that temporary supply shocks are translating into core inflation. Not much from Williams, as his speech today was largely on the reserve framework and regulation. • US-IRAN – A slew of headlines, but overall nothing changed the narrative. Oil had a volatile day and finished the day with a 1.2% decline. On the constructive side, Iran floated a conditional framework to reopen the Strait within seven days. Rubio’s comments that ~60–70% of oil flows were supportive as well. However, Trump reiterated that a peace deal may not come until after the midterms. On balance, it seems that oil prices have stabilized below $100 amid recent diplomatic events, but the situation remains fragile. Also keep an eye on the diesel exports ban debate, given several Republican lawmakers and candidates intensified calls today for the Trump administration to restrict US diesel exports to control retail diesel prices.