MILAN (Reuters) - Credit Suisse (SIX:CSGN) on Tuesday downgraded equities to neutral from overweight, citing near-term risks associated with the highly infectious Omicron virus variant at a time when high inflation could lead to tighter monetary policy.
"Even though we do not foresee a situation as drastic as at the start of the pandemic, we could face a situation in which the growth prospects are waning while central banks are forced to tighten liquidity at the same time," the investment committee of the Swiss bank said in a report on Tuesday.
Credit Suisse kept a "slight cyclical tilt" in portfolios. It said "equity markets have upside potential over a 6-month time horizon, as our base case still calls for robust global growth to be maintained over the medium term."
It also cut UK stocks to neutral citing "deteriorating" earnings.