MARKET CALL Investing Jan 6 Matt Kacur's Top Picks: January 6, 2017 Staff Matt Kacur, president at FSA Financial Science and Art Focus: North American equities _____________________________________________________________ MARKET OUTLOOK We still think the best opportunities are in energy because the sector is still in recovery mode. Valuations are still very favourable in the sector despite a nice move off the bottom back in the spring of 2016. In addition to favourable valuations, companies in the sector have made adjustments to their businesses by selling assets, paying down debt, shutting down marginal projects and laying off workers. In short, costs per barrel of oil (BOE) are down and they can make money at the current price per barrel. From a broader perspective, we think the Trump administration is positive for the market in the short run due to tax and regulation reform. However, in the longer term we are concerned about protectionist and nationalist policies that could lower growth and cause inflation. For the time being we are bullish, but we are prepared to shift that view quickly if these policies cause inflation to rise.

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