Counsellor Quarterly
July 2, 2026
The global economic backdrop remains surprisingly resilient despite the Iran War-generated energy shock, with economic data in both the U.S. and the G10 better than it was a year ago. Important tailwinds related to artificial intelligence (AI) spending, fiscal stimulus and increased productivity are all contributing to an improving outlook for corporate profits. We anticipate a headwind to the economy from the energy shock but, in our view, any dip in growth should be fairly mild and partially reversed later. Our GDP forecasts are still primarily above consensus, and we deem the risk of recession to be low. Moreover, our business cycle scorecard indicates that the cycle is in the "mid" or "late" phase, which usually still permits several years of additional economic growth.
To the extent that the ongoing global energy shock should prove temporary, while the rapid advancement and great promise AI should endure, we expect stocks to outperform bonds, but recognize that considerable optimism is priced into the equity outlook, particularly in regions with higher exposure to AI.
As we continue to navigate what Prime Minister Carney termed in Davos this year “the rupture in the global order”, both opportunities and perils abound. Identifying both, avoiding the latter, and embracing the former is what strong investment and portfolio management is all about. The war in Iran and the recent G7 summit have shown once again how important Canada is – and can be even more so. In a world where fair play, ethical behaviour, transparency and rules-based relationships are increasingly in jeopardy, those who continue to demonstrate dependability and trustworthiness with their trading and political partners are the ones most likely to be, to paraphrase PM Carney, at the table and not on the menu.
Trust is a tough thing to build, and must be continually proven. It is formed through honest dealings, and earned by delivering trusted advice and guidance underpinned by expertise and experience. As always, we thank you for your trust in us as the shepherds of your wealth, and for the opportunity you provide us daily to demonstrate why we have earned it.
Sincerely,
Vijay Parmar
President, RBC PH&N Investment Counsel
Past performance is not indicative of future results. Counsellor Quarterly has been prepared for use by RBC Phillips, Hager & North Investment Counsel Inc. (RBC PH&N IC). The information in this document is based on data that we believe is accurate, but we do not represent that it is accurate or complete and it should not be relied upon as such. Persons or publications quoted do not necessarily represent the corporate opinion of RBC PH&N IC. All opinions and estimates contained in this report constitute RBC Phillips, Hager & North Investment Counsel Inc.’s judgment as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. Interest rates, market conditions and other investment factors are subject to change. This information is not investment advice and should only be used in conjunction with a discussion with your RBC PH&N IC Investment Counsellor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest information available.
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