As over 85 percent of first-quarter S&P 500 earnings begin to surface, Charles Schwab reports the number of sectors with exceptionally good earnings is up and, thus, the earnings bar that has been set. 

In a recent online article, Charles Schwab's senior vice president and chief of investment strategies Liz Ann Sonders, examined the blending growth rate and the "surprise factor" in her 2018 Quarter 1 Earnings Scorecard.

"The improvement in earnings has not just been a tax reform story as some of the surge pre-dated the passage of the tax bill," Sonders writes. "Investors should not be extrapolating the boost to earnings from tax (and regulatory) reform too far into the future; while questioning whether the boost is already reflected in stock prices."

According to Sonder's earnings scorecard, the energy sector tops the chart with an 84 percent blended growth rate, followed by the technology sector with a 34.6 percent blended growth rate and the financials sector coming in third at a 30.7 percent growth rate.

"Earnings growth has been exceptionally strong; but much of the latest acceleration is already in the books and partly a function of one-time factors," Sonders states.  "This does not necessarily signal the end of the bull market, but it does suggest the bar has been set quite high, which could lead to both disappointments and bouts of volatility as markets look out toward a slower growth rate and deteriorating profit margins," she said.