However, officially declaring a recession is not that simple; the economic impact on people must be tangible. Yet, a 0.1% decline looks more like stability than a significant slump.
This distinction is important because many investors automatically associate the word "recession" with a drop in stock markets. What matters most to stock markets is future corporate profit growth, and for the moment, there are no issues on that front. The Canadian stock market did not react negatively to the recession announcement made in early June. Now that the news is out, it has been priced into the market. Stock markets do not reflect the economy of today; rather, they attempt to anticipate the economy of coming quarters.
Why are SpaceX, OpenAI, and Anthropic going public at the same time?
Several major companies are currently launching share offerings on public markets. Korean microprocessor company SK Hynix is preparing to issue 29 billion shares in the United States. Alphabet (formerly Google) has just issued 80 billion shares. SpaceX has just gone public, and OpenAI and Anthropic will soon follow suit.
Why do so many companies choose to raise capital on public stock markets?
The main reason is simple: stock market valuations are currently very high! In this environment, companies can raise significant capital while causing minimal shareholder dilution.
As researchers Dora Horstman, Claire Li, and Wensong Zhong demonstrated in a study of over 130,000 companies that went public, firms invariably seek market access when valuations are at their peak.
And what about investors?
Investors continue to favor the market’s top performers, driving high-momentum stocks to nearly five standard deviations above their trend. Historically, this level has been seen only during periods of extreme excess, and such episodes are often followed by increased volatility and shifts in market leadership.
Semiconductor sector under pressure
After doubling in value since the low point triggered by the conflict with Iran, the semiconductor sub-sector saw a second day of declines approaching 10%, contributing to a 3.3% drop in the NASDAQ on June 23.
In a market like this, diversification is the key to long-term success.
Fortunately, I do not think we are currently facing the same scenario as back then.
Book of the Month
The book “1929”, by financial journalist Andrew Ross Sorkin, immerses the reader in the heart of history’s most famous stock market crash in History.
The author explores market psychology and the warning signs that were ignored prior to the market collapse. High levels of debt combined with excessive optimism proved to be a recipe for disaster.
Fortunately, I do not think we are currently in the same situation as back then.
Happy reading!
Daniel Dionne
Actuary by training and Financial Security Advisor - Ellipse Financial Services
Mutual Fund Representative - MICA Capital Inc.
Sources:
- DESCÔTEAUX, David. "Canada in technical recession," Le Journal de Montréal, May 29, 2026.
- Charts/visuals on economic news – Mackenzie Investments (June 21, 2026)
- Bloomberg News – daily ("Calmer waters") June 24, 2026
Bloomberg News – daily (Wall Street "chip-wreck") June 23, 2026
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.
