FirstFT: M&A at decade low as market uncertainty kills ‘Trump bump’ hopes

Good morning and welcome back to FirstFT Americas. We start today with a request for help. April 29 marks the first 100 days of Donald Trump’s second term in office and to mark this milestone we plan to publish a reader Q&A. Email your questions to firstft@ft.com and our experts will answer them. Now, on with today’s edition:

• Hopes for a “Trump bump” fade on Wall Street

• Carmakers brace themselves for Trump’s tariffs

• The new nuclear arms race

• And how Covid lockdowns changed the workplace

Stock market falls and policy uncertainty are forcing dealmakers in the US to reassess expectations for a surge in activity this year.

As the end of the first quarter approaches, the volume of takeovers globally has risen more slowly than many advisers expected at the end of last year when investment banking stocks hit record highs in anticipation of a “Trump bump”.

The number of deals announced since the start of January is the lowest in more than a decade, according to data from Dealogic. There have been about 6,600 global transactions announced so far this quarter, down almost 30 per cent on a year earlier and 44 per cent below the peak in 2021.

Wall Street has been trying to talk a dealmaking recovery into existence for two years after interest rate rises in 2022 killed off a pandemic-era boom. What started in 2023 as “green shoots” became “early innings” in 2024 and then “animal spirits” following Donald Trump’s victory in the US presidential elections in November. 

Yet, US stock markets have been gripped by fears in recent weeks about the health of the domestic economy, with the blue-chip S&P 500 index down nearly 4 per cent so far this year. Read more on the outlook for dealmaking this year.

• More market news: Large and persistent falls on Wall Street and for the US dollar are unusual, says Goldman Sachs in a new report.

And here’s what we’re keeping tabs on today:

• War in Ukraine: The US and Russia have resumed talks in Saudi Arabia a day after American and Ukrainian negotiators met.

• Economic data: Mexico’s national statistics agency will publish data on consumer price changes in the first half of the month.

• Federal Reserve: Board governor Michael Barr speaks on “Small Business Lending” at an event in Washington hosted by the Aspen Institute.

• Canada: Campaigning begins in the country’s general election, following Prime Minister Mark Carney’s decision to set April 28 for the poll.

Five more top stories

1. Exclusive: Japan has not yet beaten deflation despite years of persistently rising consumer prices and the largest round of annual wage increases in three decades, the country’s finance minister has warned. Katsunobu Kato’s blunt assessment comes 15 months into the Bank of Japan’s efforts to “normalise” the economy. Read the full FT interview.

2. Software giant SAP has overtaken Novo Nordisk to become Europe’s most valuable company, in the latest milestone for Germany’s surging stock market. Shares of SAP have risen more than 40 per cent in the past year as investors welcomed the shift of its business customers to the cloud. This is a developing story.

3. International carmakers are rushing to ship vehicles and core components to the US to get ahead of the next round of President Donald Trump’s tariffs. Trump has said that “reciprocal” tariffs on the US’s trading partners will come into effect on April 2 — the same day that a 30-day reprieve ends on the president’s pledge to impose 25 per cent tariffs on imports from Mexico and Canada. Here’s more on how the car industry is preparing.

4. A Turkish court yesterday formally arrested the main challenger to the country’s longtime leader Recep Tayyip Erdoğan, threatening to escalate a crisis that has ignited mass protests and financial turmoil. The court ruled that Istanbul mayor Ekrem İmamoğlu should remain behind bars ahead of a trial on corruption allegations. The move against İmamoğlu has set off the largest opposition protests in more than a decade in Turkey.

5. The head of law firm Paul Weiss yesterday defended his decision to strike a deal to end a dispute with US President Donald Trump. Brad Karp, the chair of Paul Weiss, wrote in a note to colleagues that Trump’s executive order “could easily have destroyed our firm”. Read more on the memo.

Today’s Big Read

Donald Trump’s pivot to Moscow and scathing disregard for Nato has prompted old allies — from Berlin and Warsaw to Seoul and Tokyo — to confront what was seemingly unthinkable: how to prepare for a potential withdrawal of their US nuclear shield.

We’re also reading . . . 

• US exceptionalism: The long overdue rebalancing of global markets has only just begun, writes Ruchir Sharma, and is likely to be playing out for a long time.

• Why ships are the new chips: At the centre of the Trump administration’s world view is a desire to make America’s maritime capacity great again.

• Weight-loss drugs: Ozempic and Wegovy may mean vast gains for drugmakers but they could upend the insurance sector, writes Patrick Jenkins.

• Seven AI roles managers must master: Technology is handing leaders new challenges as some jobs are wound down, writes Andrew Hill.

Chart of the day

Argentina’s imports are rising rapidly as libertarian President Javier Milei bets on a strong peso and cheap foreign goods to help fight inflation. Italian pasta, Brazilian bread and Uruguayan butter have become increasingly visible on supermarket shelves in recent months while farmers quadrupled overseas tractor purchases in the first two months of 2025. But the peso’s strength has become politically fraught for Milei.

Take a break from the news . . . 

The upheaval of Covid lockdowns prompted a rethink not just of where we work but when and why. FT writers and contributors assess what is different five years on.

Source: Economy - ft.com