Following weeks of heavy selling U.S. stocks have eked out gains early this week, but one analyst told CNBC the respite will be short-lived and tips a 20 percent correction this year.
"The thing that would surprise me [in 2014] would be if the U.S. bounces back – we were really expecting it to be down about 20 percent this year… Our big call is long India, short U.S.," said Jim Walker, founder and managing director of Asianomics.
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Walker's view on U.S. equities goes against the grain, amid more bullish sentiment on the world's largest economy following a year of stellar stock market returns and marked pickups in leading economic indicators, such as employment and housing data.
Although the contrarian investor agreed that U.S. economic fundamentals look healthier, he said it's important to remember that the Federal Reserve's quantitative easing program has been the key driver of asset prices, and that program is currently being unwound.
"It [the S&P 500] was up 35 percent last year on the back on money printing. By the end of this year that $85 billion a month [in asset purchases] will be zero, because the Fed will keep going," he said. "We've had huge inflation for the last year in the U.S. and that inflation is now tapering off, and with it will be asset prices, they will taper off."
However, other analysts told CNBC that there were many positive drivers for U.S. stocks this year that would see the market end the year in the black despite Fed tapering.
"From our side we favor developed markets. We see U.S. equities delivering. Nothing like what they did last year, but between 6 and 11-12 percent," said Rob Aspin, head of equity strategy at wealth management group at Standard Chartered.
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Aspin said valuations of U.S. companies still look attractive, and although Fed tapering was a concern, a consistent flow of liquidity coming into the system, from the Bank of Japan, for instance, would help compensate.
"Earnings and dividends will be the driver of U.S. equity growth this year, rather than the re-rating we saw last year," he added.
Stocks have taken a battering in recent weeks, as emerging market jitters, renewed China panic and the ongoing impacts of Fed tapering bruised risk appetite. The 'fragile five' economies – Brazil, Turkey, South Africa, Indonesia and India – have suffered in particular, although their stock markets and currencies and recovered slightly this week.
Asianomics' Walker said he believed the emerging market selloff to be over, and highlighted the Philippines and India as hotspots to watch in 2014.
But Standard Chartered's Aspin warned that it was too early to go "bottom fishing" in emerging market stocks.
"We are neutral on India, and do see some opportunities in technology and healthcare stocks, but we are holding back until the elections, where there is the possibility of a new, more business friendly government," he added.
Asianomics' Walker remains heavily bearish on China, however, where he sees the economy experiencing a hard landing, with growth plummeting to between 0 and 5 percent in the next two to three years.
"The Chinese economy is not rebalancing. There's still too much debt… Growth [in China] is going into the areas of the economy that are producing the least returns…and that's compounding the problem," he said.
— By CNBC's Katie Holliday: Follow her on Twitter