M&A Has Been Downhill Since 2021. Recent Deals Stir Hope of a Revival.

Yet, a sunny day doesn’t mean that winter is over. True, so far, 2024 looks more promising than 2023, according to Dealogic. Some $290 billion worth of U.S. deals have been announced this year, in 1,051 transactions. Last year, at this point, saw $125.6 billion worth. Global mergers and acquisitions are at $455 billion so far, up 57% over 2023.

The biggest year on record was postpandemic 2021, which saw $312 billion in the U.S. by this time, and $6.1 trillion for the year. Since then, it has been downhill. Rising interest rates and recession fears have stifled deals. But hope for rate cuts is bullish.

Economic uncertainties linger. And the Biden administration has been scrutinizing big deals. The Federal Trade Commission and some states could sue over supermarket chain
Kroger’s
proposed $24.6 billion acquisition of
Albertsons
as early as this week. Analysts have raised the possibility of Capital One and Discover running into antitrust issues, and questions remain around
Nippon Steel’s
$14 billion deal for
U.S. Steel.
Bankers shouldn’t count their bonuses yet.

Write to Janet H. Cho at [email protected]

Last Week

Markets

In China, the Lunar New Year holiday began, with foreign direct investment falling to 1990s levels and officials making a record cut in mortgage rates. U.S. stocks were mixed after the Presidents Day holiday. No problem,
Nvidia
earnings turned indexes positive. On the short week, the
Dow Jones Industrial Average
was e up 1.3%; the
S&P 500
1.4%, a record; and the
Nasdaq Composite
1.4%. Japan’s
Nikkei
225 set a 34-year high.

Companies

JetBlue Airways
said it would accept two Carl Icahn representatives to its board.
Home Depot
reported a fifth consecutivse quarterly drop in revenue.
HSBC
took a $3 billion charge on its Chinese bank and bad commercial real estate loans, marring annual record profits.
Walmart
beat on earnings but was cautious about 2024.
Warner Bros. Discovery
whiffed on cable and studio revenue. Nvidia released blowout earnings, with quarterly revenue tripling from a year earlier, sending its market cap up nearly $300 billion, breaching $2 trillion on Friday morning, only to fall back. Intuitive Machines landed the first U.S. spacecraft on the moon in 50 years.

Deals

Capital One Financial
agreed to acquire
Discover Financial Services
for $35 billion in an all-stock deal that could attract regulatory attention…
Walmart
confirmed that it was buying smart-TV maker
Vizio
for $2.3 billion…
Truist Financial
sold off the remaining 80% of its insurance brokerage in a $12.5 billion all-cash deal to a group led by Clayton Dubilier & Rice.

Write to Robert Teitelman at [email protected]

Next Week

Monday 2/26

Amazon.com
will join the Dow Jones Industrial Average of 30 stocks prior to trading, replacing
Walgreens Boots Alliance.

Tuesday 2/27

S&P CoreLogic releases its Case-Shiller Home Price Indices for December. Home prices are estimated to have jumped 6.3% year over year in 20 major metropolitan areas, according to
FactSet,
an acceleration from November’s 5.4% growth.

Wednesday 2/28

Salesforce,

TJX
Cos.,
Snowflake,

Baidu,

Paramount Global,

C3.ai,

Okta,

Hewlett Packard Enterprise,
and
HPInc.
report quarterly results.

Thursday 2/29

The Bureau of Economic Analysis releases the personal-consumption expenditures index for January. Consensus estimate as measured by FactSet has the PCE rising 2.4% year over year, compared with a 2.6% rise in December. The core measure, which strips out energy and food prices, is expected to gain 2.8% year over year, compared with a 2.9% rise in December. Federal Reserve officials have said they want to see the core measure on a sustainable path to 2% growth before they start cutting rates.

Email: [email protected]