Credit Suisse examines why it remains overweight equities despite a strong market rally, arguing that improving macro conditions, supportive central banks, and attractive relative valuations continue to favor stocks. The paper also contends that investor positioning remains too cautious, with just one quarter of post 2008 equity fund outflows having reversed despite markets more than doubling.
Global Equity Strategy: Still more upside for equities
Credit Suisse
Clare McAndrew, Marina Pronina
Research
62 Pages
Key Takeaways
Higher Equity Target: Credit Suisse raised its year end S&P 500 target from 1,550 to 1,640, with a 65% probability assigned to its core scenario of 1,700.
Liquidity Supports Valuations: The authors estimate developed market central bank balance sheets could expand by 10% over six months, a level historically consistent with a 20% equity re rating.
Flows Still Underweight: Since 2008, global bond funds attracted roughly $1.27 trillion while equity funds lost about $303 billion, suggesting substantial room for a shift back into equities.
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