“Stay bullish—positive catalysts are not exhausted,” strategists led by Mislav Matejka wrote in a note to clients on Tuesday. Downside risks—including a hawkish turn by central banks, a slowdown in China’s economy, or more significant coronavirus restrictions—will either fail to materialize or are already priced in to stocks, they said.

The positive outlook comes as benchmark indexes in both the U.S. and Europe trade at record highs, following last year’s ferocious rally on the back of unprecedented fiscal stimulus and a solid rebound from the pandemic-induced slump. 

JPMorgan’s strategists are not alone: Credit Suisse Group AG this week reiterated a bullish view on U.S. stocks, while Societe Generale SA on Tuesday repeated a forecast for a 6.6% return for European stocks this year, writing that “this bull market is not over.” Strategists at Goldman Sachs Group Inc. and the BlackRock Investment Institute also see upside, albeit at a more muted pace.

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Among JPMorgan’s key calls is an overweight position on U.K. and euro-area equities, as well as on banks, miners and autos. The strategists see a good entry point in emerging-market stocks, with China deceleration “by now largely behind us.” They also like reopening trades.

They recommend a neutral position on U.S. stocks, saying they “could stall relatively if the tech outperformance starts to wane.” Still, the overall technical picture is positive for equities, as inflation should peak in the first half, the Fed is unlikely to become more hawkish, and consensus earnings growth projections “will again prove too low.”