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US-led bull market in 2014? Not so fast, says Jim O'Neill

Economist and former chairman of Goldman Sachs Asset Management Jim O' Neill has cautioned investors expecting a global bull market this year, warning that if a bull run takes hold, it will not be led by the United States.

O'Neill who coined the BRIC acronym, said 2014 will be a "trickier year for the U.S. stock market" and he pointed to emerging markets, China and India in particular, and Germany to lead equity markets higher this year.

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"I think the [U.S.] market has got a number of challenges – one, it is very high in value and If we get better data, Fed worries come straight back after a few days and bond yields go up and equity markets have got to compete with that," O'Neill told CNBC.

"If we going to have a global bull market this year – it will be led by something other than the U.S. That is possible, but I am not so sure about the U.S. sustaining leadership," he said.

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Investors instead should look to emerging markets, he said, and Germany, which is "trying to give a bit more leadership to the mess known as Europe".

U.S. stocks failed to end higher in volatile trading on Thursday, snapping a four-day winning streak, ahead of the widely-watched government jobs report. The Dow and S&P 500 hit record intraday highs earlier in the session.

O'Neill pointed to non-farm payrolls expected on Friday, as poor weather has muddied the data so far this year and investors may now be in for a shock.

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"I think the whole consensus is that it was just the weather and we are going to rebound. We are coming into the data now that should reflect that – so if we don't, people are going to be a bit surprised. Today is going to be a big day for U.S. data," he said.

India and Russia

O'Neill dismissed claims that the 'R' or Russia should be dropped from the BRIC acronym in light of the recent annexation of Crimea. That move led to a 15 percent plunge in Russia's MICEX index from the start of the year to mid-March. Russian stocks have since recovered some ground and year-to-date are now down over 6 percent.

He said that at the start of the second quarter, emerging markets were in pretty good shape.

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"Indonesia, India have not done so badly and particularly related to these events – there has been quite a bounce in Russia itself- and some other closely related markets," he said.

"India has got this incredible potential that comes from its demographics," he said.

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