JP Morgan's U.S. Outlook

We've already hit the 2011 low,according to JP Morgan's chief U.S. equity strategist Thomas H. Lee.By year's end,he expects to see the S&P at 1425.He likes the materials,industrial and energy sectors.Avoid stocks sensitive to oil prices.There will be moderate to severe disruption to supply chains in tech because of the Japan disaster.
Near term,Q1 earnings are really gonna be a support for markets.Markets may be troubled from June to September,rangebound because of the expiration of the Federal Reserve's QE 2 support program.The housing market will improve,however,driving the S&P higher by the end of 2011.
Equity market rallies are really driven by corporate profit recoveries.Investors are buying the dips because they're under-exposed.In the financial sector,we've seen improvement in credit trends,but not demand,Mr.Lee added.
In addition to his JP Morgan post,Thomas H. Lee is Chairman and CEO of Thomas H. Lee Partners,L.P.A 1965 Harvard graduate,he is a trustee of Rockefeller and Brandeis Universities.Mr. Lee is also a director of the Lincoln Center for the Performing Arts.
JP Morgan Chase(JPM)

Jobs Alert:Financial Analysts Needed

FBR Capital Markets is seeking financial analysts.They will provide feasibility and strategic analyses for the international energy and natural resources industry relating to exploration and production.Must be available to work at various unanticipated sites throughout the U.S.Those interested should mail a resume to
Attn:Ken Lattimore
FBR Capital Markets
1001 19th St. North
Arlington,VA 22209
re:Job Code 1474.18

NYSE/Euronext Ponders Capital Markets

NYSE/Euronext,or NYX,parent of the New York Stock Exchange,has been analyzing the basis of the capital markets.Trust is the powerful global currency that makes commerce possible,NYX says.The trust between buyers and sellers;the trust in governments;the trust in open markets and in the innovative technologies that power them are crucial to the exchange of capital that creates businesses and jobs.Recently,NYX points out,uncertainty,not trust,has dominated the conversation in unsettled global marketplaces.Properly regulated marketplaces such as NYSE/Euronext are crucial to restoring trust by protecting the interests of investors through transparent and accountable business practices.
NYX notes that its fundamentals have guided it through triumphs and tragedies in every conceivable market condition.As new regulations are being developed today,these principles are as important as ever-if not more so.Proceed with confidence,NYX reassures investors.

The End or Beginning

The cost of credit has started to ease,Mr.Geithner informed the U.S. Senate.Businesses are finding it easier to raise money in the capital markets.This is all welcome news,but I want to emphasize this is just the beginning.We still face a prolonged repair and adjustment.The combined effect of the programs will help.We're working very closely with the Small Business Administration.Refinancing of commercial real estate is a major challenge.The best thing we can do is 1.provide capital where it is necessary;and 2.have the Federal Reserve extend lending to Commercial Mortgage-Backed Securities,or CMBS.These are two very important steps to take.
About half the AIG risk has been taken down.To be fair,the management of this firm is finding it incredibly difficult to disentangle the businesses.Our options were substantially constrained by the complexities of this firm,Tim Geithner pointed out.Wearing a charcoal suit,white shirt and blue striped tie,the Treasury Secretary maintained his composure and seriousness through the intense exchanges with the demanding senators.

Special Access:With the Treasury Secretary

U.S. Treasury Secretary Hank Paulson says he is speaking,and he listens.One of the things they're going to hear is,keep marking to market,and if you need to,go out and raise some capital.Banks need to keep marking books to assets.We are seeking to show stability for the capital markets.If necessary,the Treasury is ready to put capital in the Government-Sponsored Enterprises Fannie Mae and Freddie Mac,which are so important to the stability of the capital markets,the former Wall Street executive said.

Listening to Leaders:Hank Paulson

Hank Paulson,the U.S. Treasury Secretary and a former Goldman Sachs(GS) executive,has been focusing on proposed new financial regulations.He would not implement them until the markets stabilize.The highest priority is limiting the impact of current disruptions.The current system creates interagency conflict.Even with new rules,market stress will inevitably occur.The new structure would be phased in over a 2-8 year period.Consumer protection would be improved under the new system.A new insurance regulator would be housed in the Treasury.Mr.Paulson is confident in the resiliency and strength of the capital markets.He is not looking to outlaw innovation.We have excess complexity in many areas.There would be a prudent financial regulator for banks.They would look for issues and problems such as excess complexity.The Federal Reserve would have the authority to examine financial companies,and could require limiting exposure to certain asset classes.