We raised our recommended exposure to the S&P 500 Materials sector to marketweight from underweight. We see the sector benefiting from economic implications from the better-than-expected October jobs report as well as the prospects for the signing of the "phase one" trade accord with China. The sector is projected to post a near-13% increase in operating EPS in 2020, as compared with the 17% decline forecast for 2019, and trades at a 2020 relative P/E that is equal to the broader market's. The group has an above-average percentage of constituents with favorable investment recommendations. Finally, the financial sector's relative strength has begun to improve relative to the S&P 500.
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