We recently upgraded our rating on the Financial Services sector to Over-Weight. With market optimism rising on positive vaccine developments and the presidential transition, interest rates have started to move higher at the long end of the yield curve. We expect banks to benefit from wider net interest margins and lower loan-loss provisions as the economy normalizes, and insurance companies to generate higher income in their investment portfolios. The sector accounts for 10.4% of the S&P 500, down from 16.3% following the exclusion of REIT stocks. Over the past five years, the weighting has ranged from 9% to 17%. We think the sector should account for 11%-12% of diversified portfolios. The Financial sector is underperforming the market thus far in 2020, with a loss of 9.6%. It slightly outperformed in 2019, with a gain of 29.2%, and underperformed in 2018, with a loss of 14.7%. Here is how we use our analysts' Financial Services sector ideas in our Focus List and Model portfolios. All of the following stocks are rated BUY at Argus.