U.S. stocks have rallied this year, but the overall performance of global equities has been mixed so far. Japan outperformed, but China suffered losses. UK and other European stocks rose but still underperformed US and Japanese markets. So where will global stocks head in the second half of the year? CNBC Pro asked 15 market strategists from investment banks and asset managers July 3-7. Respondents also shared their views on how investors should be positioned and what the biggest market risks are. Five of the strategists surveyed expect global markets to fall, and another five expect the stock to outperform its U.S. counterpart. Others said it would depend on market conditions, including whether the U.S. economy would slip into recession. Global Market Bulls Those who expect global stocks to beat the US are the most bullish on the UK, Europe and Japan. “Our multi-asset portfolio maintains a neutral global stance on equities while prioritizing non-U.S. equity markets such as Europe, China and Japan,” said Christian Abuide, Head of Asset Allocation at Lombard Odier. there is,” he said. “These are areas where growth prospects have improved and valuations have declined. European and Japanese earnings are now being revised upwards.” In his base case, European and Chinese stocks rise from current levels. However, he expects Japanese stocks to fall, but not by as much as the U.S., but there could be headwinds, said Karim Chedid, head of investment strategy for BlackRock’s EMEA iShares division. . As the central bank is considering withdrawing from ultra-accommodative monetary policy, the second half of the year will have a major impact on the Japanese market. Still, he believes there is “room to grow at a strategic level” in the allocation to Japanese equities, especially given the long-term expected return optimization. Liz Ann Saunders, chief investment strategist at Charles Schwab, said the U.S. bull market is a narrow market with only a handful of stocks driving performance. “Outside the U.S., the international bull market seems to be much stronger,” he said, adding that global average stocks continue to outperform U.S. averages. “In general, the more stocks that are contributing to the overall market, the more supportive it is,” said Andreas Bruckner, European equity strategist at BofA Global Research. , the European Stoxx600 index is expected to end the year at 390, down nearly 15% from Monday’s close. Meanwhile, UBS Global Wealth Management CIO Mark Hefele expects the Stoxx 50 Index to fall about 2% by the end of the year, and the MSCI All Country World Index to fall about 5%. “We expect the drag from the U.S. credit cycle deterioration to outweigh any remaining support from fiscal policy, leading to slower growth, higher risk premiums, lower equity markets and cyclical underperformance in Europe,” Bruckner said. ‘ said. “It depends,” said Roger Lee, head of UK equity strategy at Investec, who said the firm expects “very different outcomes” in various markets depending on what happens to the US economy. If a U.S. recession doesn’t materialize and inflation stays high for an extended period of time, value stocks such as growth could fall and value stocks could rise, he said. “This could be positive for the UK market, which is dominated by value and cyclical stocks,” he said. European markets are also likely to fall “somewhere in the middle” because they also consist of a sizeable number of bargain and cyclical stocks, such as luxury retailers, Lee added. UBS’s Häfele says investors face a “balancing act”. “There’s a road to higher stocks, but it’s a narrow one. In our view, after a good rally, stocks have limited upside.” Instead, he sees opportunities in high-quality bonds, “equity laggards,” and positioning for a weaker dollar. Frederick Carrier, head of investment strategy at RBC Wealth Management, said he believes stock selection “should be limited to companies that investors are comfortable holding in a downturn.” . “For us, that means a high-quality business with a resilient balance sheet, a sustainable dividend and a business model that is less sensitive to economic cycles,” he said.