Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 25, 2017. REUTERS/Brendan McDermidThomson Reuters

Credit Suisse is out early with its forecasts for US stocks and the economy next year, and they are bullish. 

The firm’s equity strategists see the S&P 500 rising to 2,987 by year-end, implying an annualized gain of about 11%. They forecast earnings-per-share growth of 6% to 7% over the next two years, from $130 this year to $147 in 2019.

“Our market views are predicated on a supportive economic backdrop, with benign recessionary risks and a pickup in near-term indicators,” said the US equity strategists led by Jonathan Golub, in a note on Tuesday. “While we expect more muted longer-term growth, this has focused corporations on cost containment and the return of capital to shareholders, extended the business cycle and lowered discount rates.”

Credit Suisse is also betting on the continued outperformance of favored sectors in 2017. The tech sector remains the team’s favorite even though it’s expensive relative to earnings. And, they expect financials to outperform due to deregulation. 

“Our forecasts are built upon the most historically important drivers of corporate profits and stock prices,” Golub wrote. “That said, many things can alter the market’s path over the near term.”

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