I expect U.S. economy to slow but not slide into a recession.  Expect under 2% GDP growth.

• Housing growth slowing.  Auto sales stable, not growing vs. 2015.
• Canada should be flat, with moderate upside if oil stabilizes.  Housing ok… Will not collapse.
• Could see stimulus in upcoming federal budget
• China, manufacturing to stabilize in 2016 but consumer to grow.
• Europe should continue to recover with help from ECB.  Wildcards is refugee crisis and UK exit from EU.

For markets:

• I expect S&P 500 to be around 2,000 at year end, down about 2% from 2015.
• TSX could finish higher around 14,000 a 7% increase from 2015.

TOP PICKS:

Royal Bank (RY.TO) 

Banks in general sold off on fears related to:

-  Energy exposure and possible large loan losses

- Housing. The Canadian housing market is in a bubble and will burst

- Canadian economy heading into recession due to (i) and (ii

- Royal Bank is in much better shape than they were in 2008/2009 and their energy exposure is very manageable at 2%

- Foreign investors still do not understand Canadian mortgage market. It is different from US.  You cannot walk away from your mortgage in Canada!  Hence why people are very diligent at paying it off.

- In 2016 will get benefit of City National (acquisition closed Nov 2015)

- Capital Markets, terrible start to the year, but this is already widely known

- Valuation relative low with great dividend yield that is super safe

Bank of America (BAC.N)

- Sell off in Banks due to Belief no more rate hikes, Energy losses increasing, US economy sliding into recession

- BAC is in much better shape than in 2008/2009

- Energy exposure is less than 3%

- Most levered to US economy of the money centre banks, and I don’t believe US will enter a recession

- Capital Markets (25% of revenues) so far in 2016 is bad, but this has already been communicated at conferences

- Valuation very attractive, trading at less than Tangible Book Value and less than 10X 2016 earnings estimates.

- Very good risk/reward

Ametek (AME.N)

- Industrial company focused on 2 main areas:

1. Electronic Instruments.  Equipment to monitor, test and calibrate instruments.
2. Electromechanical Devices.  Electrical connectors, technical motors and systems, electric motors

- Services a wide variety of markets, including, aerospace & defense, medical, semiconductor, etc…

- Growth through both organic and acquisitions

- Long track record of growth.  16% EPS CAGR from 2005 to 2015.  Goal to double earnings every 5 years.

- Conservative management team

- Great balance sheet

- Valuation attractive at 12X EV/EBITDA and 4% Free Cash Flow Yield of US economy (and global economy) gets better, very good upside here.