May 17, 2024 - Business

Election "uncertainty" won't dent dealmaking in 2024

Illustration of two checkboxes over a divided blue and red background, with a checkmark moving back and forth between them.

Illustration: Brendan Lynch/Axios

Dealmakers aren't sweating this year's presidential election, even if it's the most important of our lifetimes.

Why it matters: The 2024 rebound should survive November, including for corporate mergers, private equity, and IPOs.

The big picture: The "election season slowdown" narrative is driven by uncertainty.

  • Will there be a new president? If so, what will that new president do?
  • This time around, however, both major party candidates are known quantities in the Oval Office. You may not like one of them, but you shouldn't be uncertain about either their policies or styles.

Zoom in: Stock markets reacted favorably to the past elections of both Trump and Biden.

  • The S&P 500 rose nearly 6% between the beginning of November 2016 and year-end.
  • It climbed over 12.7% between the beginning of November 2020 and year-end.
  • Moreover, stocks performed very well during Trump's term until getting derailed by COVID, and have soared thus far under Biden.

By the numbers: A midyear EY-Parthenon Deal Barometer is coming out this morning, and exclusive data shared with Axios shows increased optimism.

  • "What surprised me most is that we're being more bullish, says Mitch Berlin, EY's vice chair of Americas strategy and transactions. "Last time we thought corporate deal activity for transactions over $100 million would be up 12%, but now it's 20%, and private equity has risen from 13% to 16%."
  • Both would bring the U.S. deal market nearly in line with pre-pandemic activity.

The bottom line: Bankers and investors both acknowledge that some deals could be getting pulled forward, and that November/December activity is always challenged by the holiday calendar.

  • But the consensus seems to be "full steam ahead," even if that means announcing new mergers or pricing IPOs in the midst of a political maelstrom.
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