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LOOKING BELOW THE SURFACE

February 16, 2026

Equity Market Perspectives: Growth Is Expected to Continue

After equity markets continued to reach new highs in 2025, there have been renewed concerns about elevated valuations. Are stock prices outpacing underlying fundamentals, or is there still room to run?

Many factors influence market performance—government policies, geopolitical events, economic growth, inflation, interest rates and even the headlines. Yet over the long run, one of the most powerful drivers is corporate earnings.

The earnings story, so far, has been strong. U.S. corporate margins have expanded, with the average S&P 500 net income margin climbing above 10 percent this decade, roughly double the level of the 1990s.
Canadian corporate profits have followed a similar trajectory, though fluctuations in commodity prices, including a pronounced peak in 2022, have added more volatility to overall profits (graph, bottom left).

Looking ahead, several factors suggest that this growth can continue. Companies are benefiting from technological innovation, productivity gains and resilient consumer demand, all of which support sustained earnings growth. Of course, history reminds us that earnings growth alone doesn’t guarantee high market returns. In the 1970s, despite solid earnings growth of 9.9 percent, high inflation and the global energy shocks kept equity markets subdued. Indeed, growth in markets, economies—and even human progress—is rarely linear.

Even so, the current strength in earnings should not be overlooked. Robust corporate profits have been, and remain, a key driver of market strength. As we look ahead to 2026, here’s to continued earnings growth to provide the fuel for markets to keep advancing.

The information contained herein has been provided for information purposes only. The information has been drawn from sources believed to be reliable. Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document. Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact your financial advisor. Transactions of the type described herein may involve a high degree of risk, and the value of such instruments may be highly volatile. Such risks may include without limitation risk of adverse or unanticipated market developments, risk of issuer default and risk of illiquidity. In certain transactions prospective investors may lose their entire investment or incur an unlimited loss. This brief statement does not disclose all the risks and other significant aspects in connection with transactions of the type described herein, and prospective investors should ensure that they fully understand the terms of the transaction, including the relevant risk factors and any legal, tax, regulatory and accounting considerations applicable to them, prior to transacting. The information contained herein may include the opinions of representatives of third-party companies or organizations and may not necessarily reflect that of Wellington-Altus (WA) or its representatives. All third-party products and services referred to or advertised are sold by the company or organization named. While WA may have referral arrangements with some third-party companies or organizations, WA does not specifically endorse any of these products or services and is not liable for any claims, losses or damages however arising out of any purchase or use of third-party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus Insurance Inc. or other insurance companies separate from WAPW.

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The opinions contained herein are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Wellington-Altus Private Wealth. Assumptions, opinions and information constitute the author’s judgement as of the date this material and subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. All third party products and services referred to or advertised in this presentation are sold by the company or organization named. While these products or services may serve as valuable aids to the independent investor, WAPW does not specifically endorse any of these products or services. The third party products and services referred to, or advertised in this presentation, are available as a convenience to its customers only, and WAPW is not liable for any claims, losses or damages however arising out of any purchase or use of third party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus.