(Bloomberg) -- Global stocks will outperform bonds in 2024 as they navigate a “soft-ish” economic landing, Barclays Plc strategists said, becoming the latest to strike an optimistic tone on the asset class.

The team led by Ajay Rajadhyaksha turned overweight on global equities over core fixed income and said they expect “mid- to high single-digit returns” in both the US and Europe next year. That forecast stands even as bond yields stay elevated and earnings expectations for the S&P 500 “seem too optimistic to us,” they wrote in a note.

Their call is at odds with growing bets on bonds to do well: Pimco is bullish and a recent Bank of America Corp. fund manager survey showed investors turning the most positive on bonds since the global financial crisis. The US 10-year Treasury yield has fallen about 50 basis points in less than a month as money markets almost fully price out the possibility of further rate hikes by the Federal Reserve and position for easing by mid-2024.

Read more: BofA’s Hartnett Says Bonds Are Set to ‘Rally Big’ in 2024

Rajadhyaksha’s team disagrees. “US Treasury yields are likely to reverse some of the decline from the peak as the economy surprises to the upside of pessimistic growth expectations over the coming months,” he said. “We think stocks will benefit from a fairly benign bottom to this business cycle and look through near-term earnings disappointments.”

A score of Wall Street strategists, including Morgan Stanley’s Michael Wilson — one of the most high profile bears on US equities — have turned more positive about the outlook for stocks following a 17% rally in the S&P 500 so far in 2023. Morgan Stanley sees both US stocks and bonds outperforming their emerging markets peers next year.

Goldman Sachs Group Inc. strategist David Kostin predicted that the benchmark index could come close to hitting a record high next year. 

Still, some market participants have warned that economic and geopolitical uncertainty will cap gains. Mark Haefele, chief investment officer at UBS Global Wealth Management, recommended that investors “focus on quality, get in balance and stay disciplined yet agile.” He expects the S&P 500 to end 2024 at 4,700 points — roughly 4% higher than current levels.

--With assistance from James Cone and Allegra Catelli.

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