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(Bloomberg) -- Credit Suisse Group AG raised its outlook on equities to positive from neutral, predicting global stock markets will continue to rise into next year.

“The new development here is the rise in corporate guidance and revenue beats, which can justify further momentum into year-end, typically a seasonally positive time for the market,” Global Chief Investment Officer Michael Strobaek said in a note Thursday.

The Swiss bank also raised its growth forecast for the world economy next year to 3.8 percent from 3.6 percent.

Risks to the more optimistic view include the longevity of the global equity rally, the CIO said. A global selloff on Thursday saw the Stoxx Europe 600 Index drop the most since July, while U.S. stocks retreated from near record levels as investors appeared to be pessimistic about the prospects for tax reform.

After remarkably steady gains this year, it is “natural to fear some correction,” Strobaek said. “But as improving fundamentals drive upgrades of earnings and revenues, the challenge related to valuation is lessened.”

Any random rise in volatility should prove short-lived unless it reflects a sudden rise in either recession or inflation risk, the CIO said.

“Our positive tactical view leaves us comfortable with this drift, and we would indeed add to risk positions, including industrial companies, real estate equities and unhedged emerging market local currency bonds, on our expectation that the global market rally can continue into the new year."

To contact the reporter on this story: Jan-Henrik Förster in Zurich at jforster20@bloomberg.net.

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Cindy Roberts, Andrew Blackman

©2017 Bloomberg L.P.

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