CNBC reports that global equities will be roughly unchanged from their current position this time next year as bullish and bearish forces cancel each other out, according to Citi strategists.

In its quarterly global equity report, the bank’s strategists said they would not be chasing markets higher from current levels, but would prefer to wait for the next dip. Citi remains overweight in U.S. and emerging-market equities and has retained a “defensive tilt” to its sector strategy. 

Defensive stocks are those that typically provide consistent dividends to shareholders and relatively stable earnings, irrespective of the health of the broader economy.

“Global central banks are likely to buy $6 trillion of financial assets over the next 12 months, over twice previous peaks,” Citi analysts said in the note. 

Citi has compiled its own checklist of 18 items to identify if global equities are about to enter a bear market period.

“The global economy is showing further signs of recovery from the lockdown. Our Bear Market Checklist still shows only 6.5/18 red flags,” the analysts said.

However, they cited the continued vulnerability of the global economy to rising Covid-19 infections and excessive earnings optimism as downside risks that will likely cancel the optimism stemming from a potential recovery and massive central bank stimulus.

“We think the bottom-up global EPS (earnings per share) consensus for end-2021 is 30% too high, suggesting that global equities are actually trading on a demanding 24x P/E (price-earnings ratio), not a more reasonable 17x,” the note added.

The closely watched P/E ratio is a company’s current share price divided by its earnings per share.