A few weeks ago, we published a Technical Earnings review highlighting both top-line and bottom-line earnings beats across the S&P 500 (click HERE to read more). This week, we take the analysis a step further by examining a time series of the percentage of companies within the S&P 100 that have exceeded earnings expectations, dating back to 2011. The goal is to better assess the strength and consistency of earnings in the current market environment.

An earnings surprise measures the deviation between a company’s reported earnings and the consensus analyst estimate. As equity markets push to new all-time highs, part of this strength can be attributed to improving earnings momentum, with stronger growth expectations supporting higher equity valuations.

The chart below illustrates the quarterly earnings surprise rate—defined as the percentage of companies beating estimates—for the S&P 100 (OEX). Since 2011, the beat rate has averaged approximately 69%, with a range between 60% and 82%. Periods in which more than 75% of companies exceed expectations are generally indicative of a strong earnings environment, while readings below 65% suggest weaker conditions.

More recently, the data highlights a clear shift in momentum. After hovering near 62% in early 2023, the earnings surprise rate has steadily accelerated to roughly 81% in 2026. This improvement underscores a broad-based strengthening in corporate earnings, aligning with the market backdrop following 2023—the first year in the current cycle to deliver 20%+ returns. With earnings surprises still at historically elevated levels, there remains little fundamental pressure to justify a meaningful pullback in equities.

Although various stocks in the OEX have seen consecutive quarters of earnings beat, one that has particularly stood out is Applied Materials, Inc. (AMAT). Applied Materials has benefited significantly from tailwinds in the semiconductor space and structural demand tied to AI and advanced chip manufacturing. AMAT currently sits on four consecutive quarters of earnings beat as shown in the chart below, highlighting its strong earnings momentum.

AMAT reversed back into a buy signal after completing a triple top break at $456 last month. The stock is now trading at all-time highs and is up an impressive 95% year-to-date. Additionally, the stock maintains a strong 4/5 technical attribute score. The weekly OBOS indicates that the stock is in overbought territory, so wait for a normalization of the 10-week trading band before considering. Previous resistance can act as initial support, so look for $448 as possible support. Additional levels of support include $400 and $380.

For much of the second quarter Utilities have been lagging behind compared to other broad sectors. Back in May, an article in the Daily Equity Report highlighted some of the initial technical deterioration within the sector, but further negative developments have occurred in recent weeks. Just this week, the State Street Utilities Select Sector SPDR Fund (XLU) has fallen 1% - which follows the fund falling more than 5% during May – bringing the fund to down 4.25%, making it the worst performing broad sector SPDR for the second quarter.

On the default point and figure trend chart for XLU, action kicking off June brought about a third sell signal as well as a violation of the bullish support line, shifting the trend to negative. Prior to the trendline violation, XLU had been in a positive trend for more than 12 months and rallied to highs at $47.50 February before failing to better those in March and April.

Along with the trendline violation, the relative strength picture for XLU has deteriorated further as the market RS chart against the S&P 500 Equal Weight Index (SPXEWI) returned to an RS sell signal following Monday’s (6/1) trading. Prior to the change in RS signal, XLU had been on an RS buy signal since October 2024. Not only has the cap-weighted XLU witnessed a change in RS signal against the market but so has the Invesco S&P Equal Weight Utilities ETF (RSPU). Following Friday’s (5/29) trading, RSPU reversed down into Os on its market RS chart against SPXEWI and gave an RS sell signal following Monday’s (6/1) trading. Near and long-term market relative strength for the funds now resides firmly with the market and utilities out of favor. The trend and relative deterioration for both funds have brought their fund scores to levels not seen since April 2024 with XLU at 2.20 and RSPU and 2.

Broadly speaking, utilities funds (mutual funds and ETFs) have seen their scores fall to levels not seen in two years or more. Evidence of such can be found on the Asset Class Group Scores page, which takes the average score of the ETFs and mutual funds within specified asset groups, such as utilities, and ranks 134 groups to identify strength as well as laggards. Following Monday’s (6/1) action, the average score for the utilities group fell below 3 for the first time since April 2024, marking the end of a two-year run where the group scored above 4 for much of the time. Of the roughly 19 sector or industry specific groups on the Asset Class Group Scores page, utilities now rank 14^th.

Among the other technical developments for utilities are continued downside within the broader sector’s indicators. The bullish percent indicator for the sector (^BPECUTILITY) dropped below 50%, suggesting that less than half of the stocks within utilities maintain a point and figure buy signal on their trend chart. Additionally, the longer-term positive trend indicator (^PTECUTILITY) has dipped below 60%, highlighting a continued decrease in utilities stocks maintaining a positive long-term trend (trading above the bullish support line) on their default point and figure chart. In both cases, these levels mark 12-month lows for the intermediate and long-term indicator.

Although utilities sit in an equal-weight position within the NDW DALI Sector Rankings, as discussed above, the mounting weight of negative evidence for the broader utilities space has continued to build. Within further long-term deterioration for the sector potentially on the horizon investors will likely either look to continue lightening up on or step away from exposure to utilities depending on the level of technical deterioration.

Featured Charts:

Portfolio View - Major Market ETFs

The option suggestions featured here are pulled from the NDW Options Ideas tool. These are just a sample of the ideas that can be found there. The Options Idea tool contains numerous additional income and speculative plays. It also offers relative strength-based screens targeting the highest (and lowest) relative strength stocks and ETFs that have recently moved counter to their longer-term trend. To access or subscribe to the Options Ideas tool click here.

Call

Walmart Inc (WMT) August 21 $115 Call

Put

PDD Holdings Inc (PDD) August 21 $90 Put

Income (Short Put)

JP Morgan Chase & Co July 2 $295 Put