Companies sitting on piles of cash will look to leap-frog competitors with strategic acquisitions.
U.S. stocks have enjoyed a steady advance this year, with particularly spectacular performance during the month of December. The month’s equity gains have been driven by a slew of positive news–including the unexpected decline in jobless claims.
The Labor Department’s first-time jobless claims reports continue to improve and show a promising downward trend, pointing to a slowing in layoffs. The unemployment data is very important; it’s further confirmation that the labor market is on the mend. If people really are going back to work, the current spending in the malls will continue long after this holiday season is over. That’s all the economy needs to give it the boost that will drive the Standard & Poor’s 500 Index to even higher levels in 2011.
Add to that the positive data on manufacturing and housing, and there’s a renewed confidence in the economy. The S&P 500 is now at a two-year high, and we have even seen one of the best barometers of consumer and business vibrancy–FedEx ( FDX – news – people ) raising its profit forecast–give the market an additional shot of adrenaline. The bottom line is that good news is flowing and shares are rising.
For the full article, see here:
And also, you can find here some very interesting information from The Economist
M&A is a confidence game, reckons Carsten Stendevad of Citigroup’s corporate-finance advisory arm. That makes the recent increase in activity surprising, since business confidence has been weak, he says. However, the coincidence of several deals happening at once may make other bosses pluck up the courage to make a move. “It’s the front-page effect,” says Mr Stendevad.