HSBC sees a lukewarm year ahead in 2014 for global equities, with expectations dragged down by the widely expected tapering of the Federal Reserve's quantitative easing (QE), which have propped up financial markets.

The bank, however, is not predicting a bear market, CNBC reported.

"We find it hard to make a case for global equities to generate double-digit returns in 2014," said Garry Evans, HSBC's global head of strategy, in a research note.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

HSBC foresees an 8 percent upside for global equities in 2014, or 10 percent with dividends added in.

"With the Fed moving towards QE 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 are predicting global earnings will rise about 11 percent and investors will continue to exit bonds in favor of equities.

At Nomura, strategist Bob Janjuah has weighed in with a 2014 prediction for a 25 to 50 percent selloff in global stock markets, CNBC noted.

But Barclays has a 2014 year-end forecast of 1,900 for the S&P 500, and Citigroup is looking for a 13 gain in global stocks next year, according to CNBC.

David Kotok, chief investment officer at Cumberland Advisors, said his firm is fully invested even with the likelihood that the Fed commences withdrawing QE in 2014.

"Asset prices in almost all categories — stocks, commodities that reflect monetary activity, art in auctions, real estate, and a host of other items — reflect an upward bias. The reason behind that upward bias is that the interest rate is maintained at a very low level," Kotok wrote in a client commentary.

The low interest rate trend "will continue worldwide in the major economies for several more years," he predicted.

In an article for Forbes, Kevin Mahn, chief investment officer of Parsippany, N.J.-based Hennion & Walsh Asset Management, said there is still room for upside in stocks at least until the end of 2013.

Mahn forecasted that a revival of the debt ceiling debate free-for-all in Washington is bound to cause more market volatility early next year.

"Until that point in time, I do see more upside potential for the equity markets for the balance of the year, with a potential Santa Claus rally to close out the year, accompanied by less downside pressure on bond prices," he predicted.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

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