2Q | 2011 Guide to the Markets As of March 31, 2011

1 Table of Contents

2 Returns by Style 2

3 Returns by Sector 3

4 U.S. Equity Indexes 4

5 S&P 500 Index at Inflection Points 5

6 Equity Scenarios: Bull, Bear and In-between 6

7 Investment Style Valuations 7

8 Stock Valuation Measures: S&P 500 Index 8

9 Earnings Estimates and Valuation Drivers 9

10 Deploying Corporate Cash 10

11 Sources of Profitability 11

12 Equity Correlations and Volatility 12

13 Economic Expansions and Recessions 13

14 Economic Growth and the Composition of GDP 14

15 Cyclical Sectors 15

16 Consumer Finances 16

17 Federal Finances

18 The Aftermath of the Housing Bubble 18

19 Employment 19

20 Job Growth, Productivity and Labor Force 20

21 Small Business 21

22 Corporate Profits 22

23 Consumer Price Index 23

24 Returns in Different Inflation Environments – 40 years 24

25 Oil and the Economy 25

26 Consumer Confidence 26

27 Fixed Income Sector Returns 27

28 Fixed Income Yields and Returns 28

29 The Federal Reserve 29

30 Credit Conditions 30

31 Treasury Yields and Inflation 31

32 Foreign Ownership of U.S. Treasuries 32

33 High Yield Bonds 33

34 Municipal Finance 34

35 Emerging Market Debt 35

36 International Returns: Local Currency vs. U.S. Dollars 36

37 The Economic Growth Differential 37

38 Global Economic Growth 38

39 Global Monetary Policy 39

40 Global Equity Valuations – Developed Markets 40

41 Global Equity Valuations – Emerging Markets 41

42 International Economic and Demographic Data 42

43 Sovereign Debt Vulnerability 43

44 Current Account Deficit and U.S. Dollar 44

45 Currencies 45

46 Asset Class Returns 46

47 Correlations: 10-Years 47

48 Mutual Fund Flows 48

49 Dividend Income: Domestic and Global 49

50 Global Commodities 50

51 Gold

52 Marginal and Average Tax Rates 52

53 Historical Returns by Holding Period 53

54 Diversification and the Average Investor 54

55 Market Comebacks: Bear Markets and Intra-year Declines 55

56 Alternative Investment Returns 56

57 Corporate DB Plans and Endowments 57

58 The Dow Jones Industrial Average Since

59 Page Reference

60 J.P. Morgan Asset Management – Index Definitions

61 J.P. Morgan Asset Management – Index Definitions

62 J.P. Morgan Asset Management – Definitions, Risks & Disclosures