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Wall Street Shows Signs of Life with M&A Activity; No Bear Market Predicted

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Wall Street’s Bull market may still have some life to it. Despite the past six-weeks of anxiety in which investors have watched their stock portfolios fall into the red, experts are not predicting a bear market. Photo Credit: Shutterstock

Wall Street’s Bull market may still have some life to it. Despite the past six-weeks of anxiety in which investors have watched their stock portfolios fall into the red, experts are not predicting a bear market. On the contrary, their words are heartening. As reported by the NY Post, the sell-off, may be nothing more than a normal corrective action, which is necessary before prices can propel to higher heights.

In the first two weeks of June, the stock market rallied 1,200 points rapidly and the market may just need some time to absorb the change. Stock prices were sent higher thanks to signs from Jerome Powell, Chairman of the Federal Reserve, conceding that it went too far in raising rates.

Now analysts are optimistic, pointing to the possibility that we may even get a rate cut.

Benchmarks rates, which currently stand between 2.25%-2.50%, may be cut as early as Wednesday, at the conclusion of the central bank’s two-day policy meeting, which begins on June 18th. As per data from CME Group, released on Friday, Federal-funds futures pointed to an 87% chance for a rate cut in July, and a 26% chance for an easing this month.

The market is offered other positive signs of late, via the quality of the IPO markets. The initial public offerings market has been strong, with 14 offerings this year, or more than

double that of last year. Many of the companies going public have stability, as opposed to the dot come bubble era. Some of the companies have billions in revenues and well-established business models in high-growth fields. Even the IPOs that didn’t receive much of a reception such as Uber and Lyft, due to issues with profitability, are each large, credible, businesses that have permanently changed the face of transportation.

Another optimistic indicator is the volume of mergers and acquisitions. Thanks to significant liquidity, we are seeing strong, quality activity in mergers and acquisitions across many sectors. The pending deal between T-Mobile and Sprint is the ideal sort of union that makes sense in the business world. Just this week, Altice announced that it will acquire Sotheby’s in a deal that values the auction house at $2.66 billion.

In an $11 billion deal, giant drug maker Pfizer gained access to Array’s approved cancer drugs. Last week, Salesforce successfully purchased Tableau Software for $15.6 billion in stock, Customer Relationship Management company with the data visualization powerhouse.

These positive activities, among others, hint that the bull is here to stay, at least for the time being.

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