M&A decline from 2015 records may indicate stock vulnerability

New York

WORLDWIDE merger deals have declined sharply from the frenetic pace that pushed them to record levels in 2015, a sign that could reflect broader weakness in the US economy and vulnerability for US stocks.

Previous merger and acquisition activity bursts peaked in 2000 and 2007 and preceded big stock sell-offs. During frothy markets, M&A activity tends to accelerate because companies see opportunity in purchasing growth rather than creating it from within. Investors reward them for their risk taking.