Stock market gains have further to run and investors are still under-pricing the scale of the world’s coronavirus recovery, investment bank Morgan Stanley (MS.N) said in an outlook note.

“While the last four months have been exceptional, we think that this cycle has been, and will be, more ‘normal’ than appreciated,” said Andrew Sheets, the bank’s chief cross-asset strategist.

“We think that stocks and credit will be modestly higher and tighter over the next 12 months,” he said. The bank forecasts the S&P 500 index at 3,350 points and benchmark U.S. 10-year yields at 1.3% by mid-2021.

The call, made in a note dated Sunday and distributed on Monday, comes as global markets pull back from a sharp rally that has lifted world stocks about 36% from March lows.

The S&P 500 .SPX closed at 3,041.31 points on Friday and U.S. 10-year yields US10YT=RR last sat at 0.6625%.

Morgan Stanley analysts suggest clients take long positions in U.S. small caps and financials, the euro and emerging market currencies, such as the Indonesian rupiah and Indian rupee, and add a little bit more risk to their credit portfolios.