The following JCL will give you the desired results. I assumed that your input 2 has just 2 records and you are interested in only the first 5 bytes. If you have more records in your file2 , the output will be huge.
Joined: 06 Jun 2008 Posts: 8337 Location: Dubuque, Iowa, USA
SAS PROC SQL without a WHERE clause will do a Cartesian join (every record in file 1 will be matched to every record in file 2, yielding output of the number of records in file 1 times the number of records in file 2).
Googling SAS Cartesian join will get over 14,000 hits including some good explanations of the process.
With z/OS DFSORT V1R5 PTF UK51706 or z/OS DFSORT V1R10 PTF UK51707, you can use the Joinkeys function like shown below to get the desired results. Since both files don't have a common key we add an extra byte at pos 6 using INREC for each file via JNF1CNTL and JNF2CNTL and use that as a key for matching