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Buy financials on the dip because of rising interest rates, strategist says

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Investors should buy financial stocks due to the sector's strong earnings growth this year relative to other industries, according to BMO Capital markets, which reiterated its overweight rating on the sector.

The S&P Financial Select Sector index is up 18 percent through Thursday from the Nov. 8 election compared with the 10 percent return. However, the sector has declined 7 percent since March 1.

"Fundamental and macro analysis suggests to us that the [financials] rally has just begun, with recent weakness providing a timely opportunity to add to positions," chief investment strategist Brian Belski wrote in a note to clients Thursday. "We believe there is a high likelihood that the 10-year Treasury yield will drift higher in the coming months, bringing financials relative performance 'along for the ride."

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