A major trend holding back Wall Street could reverse itself in 2024

Dealmaking in the business and financial sector has been sluggish this year, marking the worst period for mergers and acquisitions in a decade. Initial public offerings (IPOs) have also suffered, with only a few companies going public. Global IPO volumes fell by 8% in 2023, and IPO proceeds dropped by 33% compared to the previous year. The value of deals worldwide is projected to fall below $3 trillion, the first time since 2013. This decline has implications for both Wall Street bonuses and Main Street, as mergers and acquisitions support job creation, economic expansion, and technological advancement. However, experts believe that 2024 shows promise for dealmaking with private equity firms having significant capital available for M&A activity. Factors like falling interest rates and stabilizing markets could lead to a resurgence in dealmaking. Companies are expected to focus on artificial intelligence, with the technology offering opportunities for productivity growth, enhanced product offerings, and market expansions. The energy sector has seen an increase in M&A activity this year, with high transaction values. Regulatory changes related to mergers and acquisitions in the US are expected to have an impact, potentially prolonging merger timelines. Despite these factors, the stock market has been performing well, reaching record highs and signaling optimism among investors. The Federal Reserve’s announcement of steady interest rates and projected rate cuts in 2024 have boosted market confidence. However, there is a mismatch in expectations between the Fed and the markets, with investors predicting more rate cuts than the central bank has suggested, potentially leading to uncertainty. The US and EU have agreed to extend the suspension of EU tariffs on American whiskey until March 31, 2025, providing some relief to the whiskey industry.