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Here are Citi's favorite stocks for 2016

Millennial investor
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Citi Research predicts the overall market will be choppy at best next year, but the firm still believes there are stocks and sectors where investors can generate solid returns.

Tobias Levkovich, Citi's chief U.S. strategist, thinks the market will rise during the first six months of 2016 and then give most of that rally up in the second half.

He provided his 2016 road map for the S&P 500 with a first-half price target of 2,300 and a 2,200 price target for year-end in a note to clients Dec. 16:

"The U.S. equity market outlook for 2016 is more clouded as corporate profit margins look likely to be under some pressure while the Fed raises rates, not to mention presidential election uncertainty. The earnings environment should provide a positive backdrop for stocks as subdued sentiment and valuation parameters are supportive."

Levkovich points out that U.S. companies only have to do a little bit better to post respectable earnings growth numbers in 2016, because of unusually weak results from energy companies in 2015. He predicts S&P 500 earnings will increase 7 percent year over year.

Here are Citi's top sector and stock recommendations...

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