U.S. stocks have made big gains this year, but the performance across global stocks has been uneven so far. Japan outperformed, while China incurred losses. U.K. and other European stocks made gains, but still underperformed U.S. and Japanese markets. So where will global stocks go in the second half of the year? CNBC Pro asked 15 market strategists at investment banks and asset managers that question from July 3-7. The respondents also shared their views on how investors should be positioned and what the biggest market risks are. Five of the strategists polled expect global markets to fall, while another five say the stocks will beat their U.S. counterparts. The rest say it depends on market conditions, such as whether the U.S. will fall into a recession. Global market bulls Those who expect global stocks to beat the U.S. are most bullish on the U.K., Europe and Japan. “While maintaining a neutral global stance on equities in our multi-asset portfolios, we have a preference for non-US stock markets, including Europe, China, and Japan,” said Christian Abuide, head of asset allocation at Lombard Odier. “These are areas with improving growth prospects and lower valuations; earnings in Europe and Japan are currently being revised up.” He expects European and Chinese stocks to rise from current levels, in his base case scenario, and Japanese stocks to fall — although by less than in the U.S. Karim Chedid, head of investment strategy for BlackRock’s iShares division in EMEA, said there could be headwinds for Japanese markets in the second half as its central bank considers pulling back from its ultra-loose monetary policy. Still, he believes that allocation to Japanese stocks has “room to grow on a strategic level especially considering optimisation for long-term expected returns.” Liz Ann Sonders, chief investment strategist at Charles Schwab, noted that the U.S. bull market is a narrow one, with only a handful of stocks driving performance. “Outside the U.S., the international bull market seems to look much stronger,” she said, adding that the average international stock continues to outpace the average U.S. one. “In general, the greater the number of stocks that are helping push the overall market higher, the more support the market has.” Global market bears Andreas Bruckner, European equity strategist at BofA Global Research, predicts that Europe’s Stoxx 600 will end the year at 390 — a nearly 15% decline from Monday’s close. Meanwhile, UBS Global Wealth Management’s CIO Mark Haefele expects the Stoxx 50 to lose around 2% by the end of the year, and that the MSCI All Country World index will fall by about 5%. “We expect the drag from a deteriorating US credit cycle to outweigh the residual support from fiscal policy, leading to weaker growth, wider risk premia, lower equity markets and cyclical underperformance also in Europe,” Bruckner said. ‘It depends’ Roger Lee, head of U.K. equity strategy at Investec, said the firm is expecting “very different outcomes” for the various markets depending on what happens to the U.S. economy. If the U.S. recession never materializes — and inflation stays higher for longer — highly valued stocks such as growth stocks would fall and value stocks could rise, he said. “This could put pressure on indices, like the S & P and Nasdaq, that are highly exposed to high-value growth stocks. By contrast, it could be positive for the U.K. market – which is dominated by ‘value’ or cyclical stocks,” he said. European markets are likely to fall “somewhere in the middle,” as they’re comprised of some highly valued stocks, such as luxury retailers, and also a fair number of cyclical stocks, Lee added. How to position UBS’ Haefele says investors face a “balancing act.” “There is a path higher for stocks, but it’s a narrow one. After a strong run, the upside to stocks is now limited, in our view,” he said. Instead, he sees opportunities in quality bonds, “equity laggards,” and in positioning for dollar weakness. Frederique Carrier, head of investment strategy at RBC Wealth Management, said he increasingly believes that individual stock selections “should be restricted to companies that an investor would be content to own through a recession.” “For us, that means high-quality businesses with resilient balance sheets, sustainable dividends, and business models that are not intensely sensitive to the economic cycle,” he said.