Solid Profits, But Accelerating Inflation
These results offset higher-than-expected inflation figures, driven by rising gasoline prices. And inflation means rising interest rates—not short-term rates (dictated by central banks)—but long-term rates (10-year and 30-year bonds).
In recent years, the 10-year yield (on US Treasury bonds) above 4.5% was viewed unfavorably by investors. Today, it stands at 4.45%. This situation warrants close monitoring, with the hope that the oil market will improve in the coming weeks.
When was the last real recession?
I ask because, although we hear a lot about them, recessions have become increasingly rare over the centuries.
Historians mention that between 1300 and 1800, England was in recession half the time. In the 19th century, this was the case about 25% of the time, and even less so in the 20th century.
More recently, there was a tech bubble in the early 2000s. Then there was the 2008 global financial crisis, and nothing since—apart from a recession lasting a few months due to the COVID-19 lockdowns. All these recessions were caused by specific events that are unlikely to be repeated (we hope!).
In short, the last normal recession dates back to the early 1990s, almost 36 years ago!
Why are there fewer recessions?
Several factors explain this trend:
Government and central bank interventions are more intense than in the past, with economic policies now aimed at limiting or avoiding the risks of recession and increases in unemployment.
Developed economies rely more heavily on the service sector, a less cyclical sector than manufacturing.
As a result, over time, investors have become accustomed to an environment where major crises seem less likely. But be warned: in the long term, governments will have to slow spending, as deficits are generally too high.
Book of the Month
Listening to the news too much can easily lead to a cynical view of the world. That's why I recommend reading "Humanity: A Hopeful History" by Rutger Bregman.
The author defends a simple yet powerful idea: most people are fundamentally good.
Through captivating historical facts, he overturns several preconceived notions and offers, with humor, seriousness, and clarity, a refreshing and inspiring perspective on the world.
A perfect book to rebalance our perception of the world.
Happy reading!
Daniel Dionne
Actuary by training and Financial Security Advisor - Ellipse Financial Services
Mutual Fund Representative - MICA Capital Inc.
* Sources: The recession recession (The Economist – Novembre 15th, 2025). Earnings Insight, FactSet, May 8th, 2026 (FactSet Earnings Insight).
Please note that these comments reflect my opinion and do not constitute investment advice. Each individual's unique financial situation may lead to different investment choices.
I also invite you to send me your questions, which I will answer in a future newsletter, for the benefit of all.
