Merger and acquisition activity is up 75% on last year so far in 2014 reaching the $2 trillion mark, according to Reuters data. This week alone 8 deals were announced which set an all time record for deals valued over $5bn. To July 17th the total value of deals over $5bn topped $916bn

This is a good sign for companies that have been mostly cost cutting for the last couple of years as business crumbled over the crisis. Increased M&A action shows that companies have confidence in what lies ahead with the continuation of the recovery and so are more ready to cement their place to take advantage of it. It often has a positive snowball effect on the rest of the economy.

If we start seeing a similar vote of confidence in business investment then the recovery will get a decent kick up. It’s this sort of news that will help bring the fundamentals up towards justifying the prices and will reinforce the stock market bull run.

And for the old fogies out there

;-)