Stocks across the globe won't see quite the same "risk-on" rally that 2013 has brought, according to analysts at HSBC, but rather than entering a bear market the bank foresees a "lackluster" year with any upside capped at 10 percent.
"We find it hard to make a case for global equities to generate double-digit returns in 2014," a team led by Garry Evans, the global head of strategy at HSBC said in a research note on Monday.
But the bank doesn't see any obvious triggers for negative returns – or a bear market – on the horizon and its research implies an 8 percent upside for global equities by the end of 2014, (10 percent when adding in dividends).
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The key motivation behind this gloomy outlook for returns is the expected moderation of asset purchases by the U.S. Federal Reserve. Bond buying by the Fed in the years following the global financial crash has caused U.S. Treasury prices to surge, causing a drop in yields.
Investors have therefore sought other places to park their money for return, and with cash offering slim interest rates, many have instead piled into equities.
The S&P 500 Index finished the session at 1,798 points on Friday evening - another fresh record - and now sits 26 percent higher than it was than at the start of the year. The U.S. Federal Reserve's $85 billion-a-month asset purchases has run alongside similar programs in the U.K. and Japan. The U.K. FTSE 100 Index has added 14 percent year-to-date whilst Japan's Nikkei 225 has logged a staggering 45 percent rise despite the odd stutter.
But despite dovish comments from U.S. Federal Reserve Vice Chair Janet Yellen, who is on course to become the central bank's next chairman, many are expecting this liquidity to be "tapered" in the next few months.
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"With the Fed moving towards QE (quantitative easing) tapering and valuations in most markets slightly above their 10-year averages, we cannot rely on a further rise in multiples to drive markets higher. The next leg-up has to come from earnings growth," HSBC said.
The bank's analysts predict that earnings can grow next year by about 11 percent with global economic growth picking up. It also predicts that investors will continue to offload bonds in favor of equities.
HSBC sees the yield on a benchmark U.S. 10-year Treasury being between 2.1 percent and 3 percent in 2014. Despite a higher yield being positive for investors, it's holding bonds during this climb higher that would mean bond holders would actually lose money. Therefore, HSBC sees this as the most positive potential factor for equity markets.
Meanwhile, other banks have also released bearish outlooks on stocks for next year. In early November, Nomura strategist Bob Janjuah said in a client note that he expects a 25-50 percent sell-off over the last three quarters of 2014 in global stock markets. Steen Jakobsen, chief economist at Saxo Bank has explained on several occasions to CNBC in recent weeks that bullish investors are "chasing the tail" of the recent equity rally, indicating that now is not the time to be risky.
But there are some that still predict an upside for U.S. equities. Barclays introduced a 2014 year end S&P 500 price target of 1,900 in November, whilst Citigroup has said that equity markets around the world have got about another 13 percent to go by the end of 2014.
By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81