We will get Santa rally...but a Grinch-y one: CEO

Equity benchmarks in the U.S. saw a late surge Monday, but analysts have told CNBC that a traditional Santa rally might resemble something more like a character from a Dr. Seuss novel.

Chris Watling, the CEO of London-based independent research boutique Longview Economics, said a push higher for equities would usually take hold on December 15 and would last until New Year's Eve due to light volumes in international markets.

He added that a sell-off before Monday has actually been much weaker than in previous years adding that this year's rally was already "a bit different" and has been advocating a move into cash, at the expense of stocks.

"I suspect that it'll be a nice little rally and volumes will thin in seven (or) eight trading days' time. But I would also say I think it's a rally within the context of a bear market. So I think the bigger picture is we're trending down in global equities, not tending up," he said.

This December, investors will have had to deal with the high likelihood of the U.S. Federal Reserve raising its benchmark interest rate after more than seven years at 0.25 percent and aggressive policy.

Many traders believe a rate hike is already priced into markets but concede that it could be a rocky patch for risk assets next year with concerns over global growth and corporate earnings.

"We've been bullish on equity markets for seven years but we think the bull market is largely getting tired and it's maybe finished," Mislav Matejka, global equity strategist at JPMorgan, told CNBC Monday.

NYSE traders
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"We think over the next one or two years, equity markets may struggle."

Since the fallout from the global financial crisis of 2008, the S&P 500 - used as a global benchmark for equities - has tripled from levels of near 700 points to its closing price of 2,021 points on Monday.

Economists and strategists - including Matejka - note that this bull run has been aided by central bank easing, companies buying back their own stock and a favorable environment in credit markets. However, Matejka told CNBC that this trend has now finished and predicts that the Fed beginning its tightening cycle at this stage could be a "policy mistake."

Traders have also been contemplating hefty valuations this year ahead of the Fed's expected policy move, but not everyone is expecting a trend lower in risk-assets. Beat Wittmann, a partner at financial adviser Porta Advisors, told CNBC last month that historical evidence on rate rises would be overlooked and predicted a rally in risk assets to continue into the new year.

Alan Knuckman, chief market strategist at Bulls-Eye Options, believes that markets will continue to move forward and told CNBC Monday that a Fed hike would not have a "dramatic" effect on markets.

Meanwhile, William Hobbs, the head of investment strategy for U.K. and Europe at Barclays Wealth and Investment Management, is also bullish on U.S. corporate profits.

"I still think profit margins can hold firm, profitability can hold firm anyway, and that probably means there's still a bit further to go in the U.S. stock markets." he told CNBC Friday.