Business Sentiment: Optimism Among U.S. Chief Executives At Historical High, Exceeds 2007 High — Deal Rush Pushes Takeovers to Most Expensive Since Lehman

Not much to say except that we are still seeing these extreme readings in any sentiment indicators available, and that we have reached the perfect spot for the next down leg in financial markets.

Believe it or not, but none of the 142 CEOs surveyed said they expected a decline in sales in the next six months, and 92 percent projected an increase, paving the way for more hiring and investment in equipment.

The vocabulary used is also of euphoria...
March 30 (Bloomberg) -- Optimism among U.S. chief executive officers surpassed the highest level reached before the recession as more business leaders projected increased sales, investment and hiring, a survey showed.

The Business Roundtable’s economic outlook index increased to 113 in the first quarter, the highest point since records began in 2002, from 101 in the previous three months, the Washington-based group said today. Readings greater than 50 coincide with an economic expansion. The previous peak was 104 in the first three months of 2005.
None of the 142 CEOs surveyed said they expected a decline in sales in the next six months, and 92 percent projected an increase, paving the way for more hiring and investment in equipment. A gain in capital spending plans points to further strength in manufacturing, the industry that’s propelled the economic expansion.

The share of respondents projecting increased sales in the next six months rose 12 percentage points from the fourth quarter.
The Business Roundtable’s survey was taken from Feb. 28 to March 18. The group is an association of CEOs of corporations representing a combined workforce of more than 13 million employees and almost $6 trillion in annual revenue.

March 30 (Bloomberg) -- Corporate executives in the first quarter paid the most for takeovers since before the collapse of Lehman Brothers Holdings Inc., kicking off what investment bankers say may be the busiest year for deals since 2007.

Acquirers paid a median 9.2 times earnings before interest, taxes, depreciation and amortization for companies in the period, the most since the second quarter of 2008, according to data compiled by Bloomberg. Valuations are still lower than during the last M&A boom, when they peaked at 11.4 times Ebitda.

AT&T Inc. (T), Duke Energy Corp., and Deutsche Boerse AG (DB1) announced deals to leapfrog their biggest rivals, bringing takeovers to $567 billion as of March 29 and beating last year’s pace, Bloomberg data show. Shareholders are pushing executives to part with the funds they amassed in the recession and make bold moves, according to Andrew Bednar, a founding partner at investment bank Perella Weinberg Partners LP in New York.
The pent-up appetite for dealmaking does seem to be coming unleashed,” said Scott Sonnenblick, a partner at Linklaters LLP in New York. “Japan put a blip in credit markets, but that’s a problem of weeks, not of months.”

The market reaction to deals is helping boost executives’ confidence, said Patrick Ramsey, co-head of Americas mergers and acquisitions at Charlotte, North Carolina-based Bank of America Corp. (BAC) In some of the quarter’s biggest deals, shares of both buyers and sellers surged on the announcements.
Investors are applauding strategic activity,” Ramsey said. [...]
H/T SS for sending me the links


Tiho said...

Are you going to short the markets?

Anonymous said...

Rubbing my eyes with disbelief. though I read an article as to why you were shorting and brilliant reasons as to tanking in the markets.
Was to email it through to clients ... bugger!
Must be another site...

pej said...

@Tiho: of course I am :-)
@Anonymous: sorry, I'm not sure what you mean?