XOM - Wells Fargo boosts its outlook on cyclical sectors for 2021

Wells Fargo suggests investors move into cyclical sectors from defensives.It upgraded its view on Financials ([[XLF]], +0.7%) and Industrials ([[XLI]], +0.6%) to Favorable from Neutral and Energy ([[XLE]], +1.9%) to to Neutral from Most Unfavorable.Wells Fargo also cut Utilities ([[XLU]], -0.2%) and Consumer Staples ([[XLP]] -0.4%) to Unfavorable from Neutral.On Financials, Wells Fargo says that while "interest rates remain low, we expect somewhat higher long-term yields, which should raise lending rates and improve profit margins. Loan loss reserves reached record highs in 2020 as banks prepared for a surge in defaults. With the economic recovery well underway, the release of these reserve's should raise 2021 earnings - expected to grow by 17%"For Industrials, Wells Fargo believes "it can outperform in 2021 given improvements in new orders, manufacturing sentiment, and a greater likelihood of increased capital expenditure."And for Energy, Wells Fargo said it believes "that the future for energy stocks is less dim than it has

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Wells Fargo boosts its outlook on cyclical sectors for 2021