Global Deal Making hits $1.4 Trillion Over SPAC Deals
At the close of Quarter 1, global deal making has already reached $1.4 Trillion. That is a 103% increase since this time last year, and the fastest move in over 20 years.
The deal making has already generated $30.1 Billion in fees for Investment Banks, creating the best ever quarter for the sector.
This is all because of company valuations are high and interest rates are incredibly low. There is massive confidence to go around as wealthy and successful entrepreneurs use SPACS to move companies public in a faster way. There are 297 SPAC IPOs so far this year, and it’s only March.
We’ll have to wait and see if this spike in SPAC deals will continue to increase or if the Government will step in and try to slow things down somehow.
Global Shipping Backup In Suez Canal
On Tuesday, A cargo ship called the Ever Given got stuck in the Suez Canal, blocking maritime traffic from entering or exiting the shipping lane. The 220,000-ton ship now lies sideways with nowhere to go.
The Suez Canal connected the Red Sea and the Mediterranean through Egypt. It’s the main global shipping system and accounts for 10% of all worldwide shipping traffic.
As of now, over 100 ships are now stuck at each end of the canal, building up more pressure on the shipping industry. If the delays continue for much longer, the prices of crude oil and other consumer goods may be affected.
Canadian Pacific Acquires Kansas City Southern
This was the biggest deal so far this year for $25 Billion which make it the first US-Mexico-Canada railroad company. There may be some bumps in the road, no pun intended, as Canada has historically given some trouble with antitrust, but if this succeeds, we are in for some good things.
If this deal goes through, it’s a bet that North America will come jumping back in the game once the economy comes back to life. This should boost trade among the 3 countries and be a mutually beneficial agreement to support economic success.
Goldman Sachs: “We Aren’t In A Bubble”
The bull run continues to be in full swing, with the S&P 500 hitting new highs and the upcoming week is looking optimistic.
But worries of bubble seem to keep rising. When things are looking too good, people tend to get nervous. China’s top banking regulator warned that Wall Street was trading at such high levels it was bound to correct.
According to Goldman Sachs, the 9 key characteristics of bubbles in the past don’t match our current market. One of the main factors of a bubble is excessive price appreciation and crazy valuations. They acknowledge some excessive price increases but argue that doesn’t mean a bubble is forming. Goldman Sachs said the rise of tech and the S&P 500 is impressive but not extreme.
Turkey Currency Crashes
Turkey’s currency and markets crash on Monday after the Central Bank Head, Naci Agbal, was fired. The Central Bank rose interest rates by 2%, a full percentage point more than what was expected.
According to Phoenix Kalen, a strategist at French Bank Societe Generale, “With Naci Agbal’s removal from the CBRT, Turkey loses one of the last remaining anchors of institutional credibility.”
This move sent traders to throw their money elsewhere, like the US dollar and the Japanese Yen.
Cathie Wood Tesla Prediction
We’ve heard over the weekend Cathie Wood of ARK Invest ETF made a big prediction for Tesla stock. She foresees the stock continuing to dominate the market and jump up to $3,000 a share. This is just the average range she predicted, with a full bullish prediction up to $4k.
