2014 is a year for Wall Street's indices to tread water at best

2014 is a year for Wall Street's indices to tread water at best. The reasons are not complicated. The US stock market rose for five consecutive years and the biggest gain occurred in 2013, with the S&P 500 Index (weekly & daily) surging 30%. That is typical of late-in-the-cycle moves when previously cautious investors are emboldened to pile in. Corporate profits, on average, did not appreciate at the same rate so valuations became high relative to other stock markets, particularly for the Nasdaq Composite Index (weekly & daily) which led the bull market. Typically slow GDP growth following a severe credit crisis recession is a restraint on earnings, which are mainly benefiting from technological efficiencies and share buyback programmes.