Energy Keeps the Lead Locked Down
Energy was one of just three S&P 500 sectors to close higher yesterday and the only one with positive net breadth on the day. It also has the largest percentage of stocks at 52-week highs by a wide margin. Nineteen percent of Energy stocks are at 52-week highs, compared with 5.9% for second-place Consumer Staples.
That strength has been evident throughout the year. Energy is the top-performing sector YTD, up 28.9% through yesterday’s close, and has held the top spot for 121 out of the year’s 136 trading days. Materials led for eight days early in the year, Industrials for five, and Technology for just two. The chart below plots all four sectors, with the background shading (bottom legend) indicating the YTD leader on each day.
Under the hood, 19 of the 21 Energy stocks are higher YTD. Although Energy has the fewest constituents of any S&P 500 sector, its average stock is up 32.4% YTD. That easily tops the 11.75% gain for the average S&P 500 stock and trails only Technology, whose average stock is up 38.91%.
Energy’s outperformance this year isn’t unprecedented. If its lead holds, 2026 will be the seventh year since 1990, and the third since 2021, that Energy finishes as the S&P 500’s top-performing sector. Only Technology has finished first more often over that span, doing so 11 times, although its last first-place finish came in 2023. Energy has also endured plenty of difficult years, tying Communication Services and Health Care for the most last-place finishes since 1990, with six each.
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Bespoke’s Morning Lineup – 7/21/26 – Tech’s Loss, Their Gain
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After a disappointing session to start the week where the major averages couldn’t hold onto earlier gains, futures are firmly higher ahead of the opening bell. The S&P 500 is on pace for a gain of 0.4% at the open while Nasdaq futures are up over 1.25%. There’s not a lot in the way of catalysts explaining the move, but earnings haven’t hurt. 3M (MMM) is up over 5% in the pre-market after reporting a triple-play, and General Motors (GM) is also up over 2% following a better-than-expected report.
Outside of equities, Treasury yields are little changed, crude oil is up over 1.5% to $84.60 in WTI, gold is up over 1%, and Bitcoin is up 2% and back above 66K for the first time in just over a month.
Asian stocks were mostly higher overnight as Japan and South Korea both rallied over 3%, while China’s Shanghai Composite jumped nearly 2%.
In Europe, the tone is also positive but more muted as the STOXX 600 is up 0.3%, led by Spain, which is up 0.8%, while France, Germany, and the UK all lag with gains of less than 0.2%. Economic sentiment for both the German and European economy came in significantly better than expected. While the report was positive, most of the surveys were probably completed before the escalation of tensions in the Middle East, so that could result in some giveback next month.
While Technology is leading the rally this morning, this year hasn’t been the summer of technology, at least not so far. Back in early June, investors couldn’t get enough of the sector as prices went parabolic into early June, staying consistently in overbought territory for nearly two months. Reality set in in early June, though, and the sector has gone from extremely overbought to the cusp of oversold and bordering correction territory.
While Technology has been a major drag on the market, other sectors have hung in there, and most are actually up. Besides the Technology sector’s 9.9% decline since the close on 6/2, no other sector is down even 3%. Financials and Health Care have been the two biggest beneficiaries of Tech’s weakness as both sectors are up over 9%, but the Real Estate, Consumer Staples, Utilities, and Industrials sectors are all up over 2%.
With Tech leading the way to the downside, its relative strength, as shown in our Daily Sector Snapshots report, has reversed much of the spring gains and has been steadily trending lower with lower highs and lower lows.
Like someone hitting a light switch, just as Tech started to falter in early June, both Financials and Health Care saw their relative strength turn on a dime from 52-week lows and start to turn higher. They’ve been the big beneficiaries of the weakness in the market’s largest sector, but if tech starts to rebound, will their fortunes reverse lower again?
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The Closer – Credit Check, Risk Parity, Canada CPI – 7/20/26
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- The New York Fed’s Credit Access Survey showed the highest credit application rate since October 2021.
- There have only been four previous periods where small caps traded at a higher implicit leverage than large caps.
- US equity futures positioning has risen for six weeks in a row and is now at one of the highest levels of the streak of net short readings dating back over a year.
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The Triple Play Report: 7/20/26
An earnings triple play is a stock that reports earnings and manages to 1) beat analyst EPS estimates, 2) beat analyst sales estimates, and 3) raise forward guidance. You can read more about “triple plays” at Investopedia.com where they’ve given Bespoke credit for popularizing the term. We like triple plays as an indication that a company’s business is firing on all cylinders, with better-than-expected results and an improving outlook. A triple play is indicative of positive “fundamental momentum” instead of pure fundamentals, and there are always plenty of names with both high and low valuations on our quarterly list.
Bespoke’s Triple Play Report covers what each company does, what this quarter’s results say about their growth outlooks, and their histories of delivering triple plays. Bespoke’s Triple Play Report is available at the Bespoke Institutional level only. You can sign up for Bespoke Institutional now and receive a 14-day trial to read today’s Triple Play Report. To sign up, choose either the monthly or annual checkout link below:
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Bespoke Investment Group, LLC believes all information contained in these reports to be accurate, but we do not guarantee its accuracy. None of the information in these reports or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. This is not personalized advice. Investors should do their own research and/or work with an investment professional when making portfolio decisions. As always, past performance of any investment is not a guarantee of future results. Bespoke representatives or clients may have positions in securities discussed or mentioned in its published content.
Daily Sector Snapshot — 7/20/26
Q2 2026 Earnings Conference Call Recaps: ASML (ASML)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers ASML’s (ASML) Q2 2026 earnings call.
ASML (ASML) is the semiconductor industry’s critical lithography supplier, making EUV (Extreme Ultraviolet lithography) and DUV (Deep Ultraviolet lithography) systems that chipmakers use to print increasingly small and complex circuits, along with metrology, inspection, software, upgrades, and service products. Its technological lead, especially in EUV, places it at the center of spending on AI accelerators, advanced logic, and leading-edge DRAM. AI demand strengthened materially, prompting customers to raise capital spending across 3-, 4-, and 5-nanometer logic, while 2-nanometer ramps and 1.4-nanometer development added further lithography demand. DRAM (Dynamic Random-Access Memory) conditions were equally strong: tight DDR (Double Data Rate) and HBM (High Bandwidth Memory) supply, elevated pricing, additional wafer requirements, and more EUV layers drove what management called a “perfect storm.” ASML expects EUV sales growth above 45%, memory system sales growth above 75%, and Installed Base Management growth above 30%. Orders nearly cover planned 2027 low-NA (Numerical Aperture) EUV capacity, while ASML is evaluating another 30% capacity increase for 2028 using its existing footprint. High-NA also advanced, with Intel using the technology in production. EPS and revenue results fell short of Wall Street estimates this quarter, though shares closes 2.3% higher on 7/15…
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Q2 2026 Earnings Conference Call Recaps: Cintas (CTAS)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Cintas’ (CTAS) Q4 2026 earnings call.
Cintas (CTAS) provides recurring workplace products and services, including uniform rental, facility supplies, first-aid products, fire-protection services, and safety and compliance solutions, to more than one million North American businesses. CTAS ended its fiscal year with 8.4% organic growth, a record-tying 51.0% gross margin, and adjusted EPS growth of 18.3%. Management said new-business activity remains strong, retention is at record levels, and pricing is only slightly above historical norms, as customers increasingly outsource noncore work to reduce administrative burdens. Supply-chain diversification, route density, garment-sharing technology, SmartTruck (delivery fleet performance data tracking and optimization), and plant automation are offsetting higher fuel and labor costs. Healthcare, education, hospitality, government, and specialty trades remain healthy, while weaker white-collar hiring hasn’t been much of a headwind. Fiscal 2027 guidance calls for 7.4%–8.7% revenue growth and 8.5%–11.3% adjusted EPS growth. The proposed $5.5 billion UniFirst (UNF) acquisition remains under FTC review but is still expected to close in the second half of 2026. Shares were 4.4% higher on 7/15 after reporting EPS and revenue beats…
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Q2 2026 Earnings Conference Call Recaps: United Airlines (UAL)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers United Airlines’ (UAL) Q2 2026 earnings call.
United Airlines (UAL) is one of the world’s largest passenger airlines. Its recent strength comes from premium travel, corporate demand, loyalty growth, and customer-experience investments such as free Starlink Wi-Fi, while sharply higher fuel costs remain the main near-term pressure. Second-quarter revenue rose 16% to $17.7 billion, with domestic passenger revenue up 20.3%, international revenue per seat up 12%, premium revenue up 16.4%, and contracted business travel revenue up 27%. Management said demand remained strong despite higher fares, arguing that rising labor, maintenance, and airport costs, not just fuel, are forcing a structural pricing reset across the industry. A recent fuel spike created a $1.12-per-share earnings headwind, but UAL expects to recover 80%–90% of higher fuel expense in the third quarter and fully recover it by the fourth. The airline is also expanding Starlink, premium seating, and larger aircraft while adjusting capacity to protect margins and cash flow. Shares were down 1.8% despite better-than-expected EPS and revenue…
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Chart of the Day: More on the First Half Unwind
Tech Staying in Neutral
On Friday, the Technology sector of the S&P 500 fell 1.11%, finishing just 0.05 standard deviations shy of an oversold reading. Tech has not closed more than one standard deviation below its 50-DMA since April 1st. Among the 11 sectors, only Real Estate, Industrials, and Financials are currently running longer without an oversold close.
Friday’s near miss of an oversold reading extended Tech’s streak of closes within one standard deviation of its 50-DMA, its neutral range, to 22 trading days. That is the sector’s longest such streak since a 30-day run ended on June 11, 2021, and is tied for the ninth-longest neutral streak since 1990.
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