Q2 2024 Takeaways:
Uptick in the markets
- The stock market has continued to push upwards through the first half of 2024, with middle market M&A also catching a bid on a road to recovery.
- Compared to 2H 2023, deal value has remained steady while deal volume has increased nearly 14%.
- The Persient Middle Market M&A Index shows middle market deal activity potentially emerging from a downcycle as there is more forward-looking clarity with macroeconomic conditions.
Things to watch for
- All eyes and ears on Jerome Powell’s comments on inflation expectations and a timeline pertaining to lowering rates.
- With a seemingly tight U.S. presidential election right around the corner, markets may experience some jitters and swings as polls continue to change.
- Risk of increased geopolitical conflict remains high, with the Middle East on the edge of an all-out war. Western support of Ukraine remains, with eyes closely watching the results of the upcoming U.S. presidential election.
Outlook for 2H 2024
- With the U.S. Federal Reserve potentially eyeing rate cuts in late 2024, improved deal making conditions could spur further increases to M&A activity.
- Private equity firms continue to be pressured for investor returns on the still nearly record (more than $1 trillion) amounts of dry powder, with deployment likely to increase in 2H 2024.
- Strategic firms continue to seek M&A as a catalyst for change and survival. According to a recent PwC Pulse Survey, 82% of U.S. CEOs say the average company in their industry will not be in business in 10 years if it fails to change its current business model.
