Bearish investors expecting (or hoping) for bull market cycle to end may be disappointed, as Citi’s global strategy team forecast a further 9 percent gain for global equities by the middle of 2018.

The MSCI International World Price Index, a benchmark of mid- and large-cap equities across 23 developed markets, is currently priced at 1,918.9. It hit a low of 684.07 on 9 March 2009. That’s an increase of around 180 percent over 8 years.

“This 8 year global bull market may be old, but we don’t think it is finished. Citi strategists forecast a 9 percent gain for global equities by mid-2018,” Citi’s strategy team said in the bank’s global equity quarterly report, published Tuesday.

The main reason to be bullish, according to the report, is they expect global earnings per share growth of 11 percent this year, compared to just 2 percent growth last year. Increased are the result of better economic growth around the world and an improvement in commodity prices.

However, risks to the bull market include a global slowdown, the failure of earnings to be delivered and market reaction to central bank monetary tightening. Also, equities are looking expensive, with a price to earnings (PE) ratio of 20 times.

Saxo Bank released a more cautious quarterly outlook for global markets on Wednesday.

The bank said central banks around the world are looking to exit or taper quantitative easing programmes. This reduction in credit expansion, along with no new reforms or tax breaks, could lead to a slowdown by the end of the year.

“With credit the sole ingredient used to stimulate the global economy over the past 10 years, investors should pay attention to any changes to the price of money (increasing), the credit impulse (decreasing) and the price of energy (decreasing) to understand the direction of the global economy,” said Steen Jakobsen, chief economist and chief investment officer at Saxo Bank.

“With recession risk increasing, we expect the rate hike cycle to end and inflation to be lower, leading to excess returns for fixed income and gold, with some incoming risk for equities.”

According to Citi’s bear market checklist, only two out of 18 sell signals are flashing.

“(The checklist) is not a market-timing model. It will not tell us that another short-term correction in global equities is imminent. But it will tell us what to do when that correction occurs. Right now, it is telling us to buy the next dip,” the report said.

“As for the individual factors, global trailing and 12 month forward PEs are starting to look frothy, but the dividend yield and CAPE (cyclically adjusted price-to-earnings ratio) still look reasonable.”

Citi’s research team recommends going overweight on European and Japanese equities and going underweight on U.K. and Australia. They were neutral on emerging markets and U.S. equities.

“Better earnings momentum means we favour cyclical over defensive sectors. We are overweight IT, energy and financials and underweight health care, utilities and consumer staples,” they said.

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