Geoffrey Rogow of Dow Jones Newswires says the lack of M&A is a good sign for stocks.
If the history of M&A activity is to believed, the bear market is dead.
In each of the last two bear markets, both in 1998 and 2002, U.S. merger-and-acquisition activity foreshadowed the end of a sliding stock market. The value of deals reached a trough in September 1998 and October 2002, one month before the markets did in each instance. The total number of deals, also known as deal-flow, hit the low points four months later in both instances, just as the stock market was starting to repair itself.
Now flash ahead to the present. M&A activity reached a value trough in November and in March deal flow reached its lowest point in almost six years, according to data provided by Dealogic. It is a trend stock traders are leaning on as a sign that it may be time to ratchet up some of their exposure to equities
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