Corporate Deals Succeed in Sending Stocks Even Higher

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The stock market has seen its ups and downs this year. At times, it fairs well and at other times, companies start falling behind in points. Just recently, the market suffered its first ever losing streak for the current year. However, right afterwards, all the discussions about deal making have made the market go higher. This helped quite a few reputable companies in beating their all time highs, or at least coming in close proximity of them.

The reports published by OfficeMax (OMX) and Office Depot (ODP) stated that right after major corporate deals were announced for the big brands, a merger took place. This actually happened a few weeks back.  There are several prominent investors which predict that more deals might be announced soon enough in the next few weeks. All this is probably a consequence of the fact that buyers are having to pay high costs for publicly traded organizations.

Jack Ablin is a chief investment officer who works at Chicago’s BMO Private Bank. He believes that as of now, investors are taking risks and they are pretty much fine with it, more than they have ever been before. This is true despite the fact that automatic federal spending will be reduced by as much as $1.2 trillion in March of next year. This will definitely occur until the White House and the Congress figure out a way to avoid the situation, the chances of which are low.

Even in the past, deals have had quite an impact on the financial markets. However, this time, there are several investors who are not worried about the fact that Congress will not prevent the sequester from kicking in. A probable reason behind this could be the fact that the above mentioned cuts are spread through a decade instead of at just one time.

Albin went on to say that the investors were comfortable with the situation even though it was not ideal. If Congress could not fix the situation, it was probably the second most practical thing.

All the gains that occur are usually shared as indicated by a recent analysis. Of the industries that inched higher, most of them were energy companies.

The stock market has been high, not just in the US but in European countries as well. These include France and Germany.

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