It’s an odd time in markets. Volatility is through the roof and stocks just suffered the worst quarter in almost four years. Yet global DEAL volume is surging given a full pipeline of mergers and acquisitions. What happens next will say a lot about this market’s health.
Take a look at the MoneyShow Chart of the Day here, courtesy of Bloomberg. It shows total deal volume by quarter going back to 2021. You can see that the value of announced transactions surged in Q1 to $1.3 trillion. That was up 20% year-over-year. It also follows a solid $4.5 trillion year in 2025.
Source: Bloomberg
In my recent Market Minute columns, I’ve been recapping both rumored and announced deals in industries as diverse as food service, pharmaceuticals/biotechnology, finance, and consumer products.
Naturally, many of them were already in the works BEFORE the war broke out at the end of February. So, it’s only natural to wonder if NEW talks will keep getting underway now – or if surging energy prices, rising financing costs, and higher market volatility will put the kibosh on activity.
Like so many things, it goes back to duration and severity of the conflict. If Corporate America can be confident a ceasefire is coming soon, M&A could continue to thrive. That’ll help support stocks, with financials likely to perform particularly well. If not? Then it could be another ugly couple of months where only energy stocks deliver for investors.
If I had to tip my hand? I think we will have an ongoing flow of dealmaking in 2026 – and a corresponding rebound in beaten-down vehicles like the State Street Financial Select Sector SPDR Fund (XLF). But it might take a bit to get talks back on track. So, exercise patience and keep your position sizes smaller if you're trading financial names!
