-Over past five years low interest rates have spurred buybacks; M&A could be next

-Rising M&A consistent with mid-cycle view

-Lowly-valued stocks with high operating costs could attract interest  

The stock market’s worry du jour is the $15 trillion or so in bonds around the world that offer negative rates. There have been plenty of headlines about it, and rightly so. In other words, instead of getting interest  you are paying the borrowers, such as the Swiss and German governments, to hold your money for you. It’s like a safety deposit box, only this is terra nova for government bonds. It’s not how they are supposed to work.

I don’t dismiss that concern. It’s unprecedented in financial markets. But today’s missive isn’t about negative rates. We’ll save that  for another day. 

Mergers and acquisition (M&A) activity is something few are talking about because, as the bears insist, this is supposedly the end of the cycle. I don’t ascribe to that.

What piques my interest is what the incredibly low interest rates means for stocks  in general, and for the M&A market in particular.  It’s true that the low rates of recent years have led to a stock buyback boom, as companies have borrowed cheaply and u...

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