Lazard Expects Deal Making to Pick Up, Tariffs to Be Measured

As the global economy navigates through geopolitical uncertainties and trade tensions, investment bank Lazard has shared its outlook on dealmaking and tariffs for the coming months. In a recent report, Lazard's Chief Market Strategist, Ronald Temple, and CEO, Peter Orszag, offered insights into the forces that stand to impact global markets and the investment environment.

Lazard anticipates a surge in dealmaking momentum, driven by private equity activity and a potential regulatory environment that favors mergers and acquisitions under the incoming Trump administration. Orszag predicts that there were a lot of large transactions being informally discussed that now are more in 'let's see if we can really make this happen,' and that's pretty much across the board. This optimism comes as investment banking activity recovers from a two-year dry spell, with Lazard ranking ninth in global M&A in the first nine months of the year.

However, Lazard also acknowledges the potential impact of tariffs on international trade and the global economy. The bank expects measured tariffs to be a significant factor in the coming months, with the incoming Trump administration's proposed 25% tariffs on imports from Mexico and Canada, as well as additional duties on Chinese goods, sparking concern among investors. Orszag believes that while there may have been a lot of rhetoric, when it comes to governing and ensuring that inflation doesn't begin to spike, things will be done in a more tempered manner.



In addition to the potential impact of tariffs on international trade, Lazard also highlights the importance of geopolitical factors in influencing dealmaking activity. The razor's-edge U.S. election is expected to have significant economic and market implications, while elevated geopolitical tensions are likely to influence investor sentiment. As countries grapple with the complexities of global trade, fostering cooperation and dialogue becomes essential in navigating the challenges ahead.

As the global economy continues to evolve, investors must stay informed about the potential impacts of dealmaking and tariffs on their portfolios. By understanding the forces that stand to influence global markets, investors can make more informed decisions and better navigate the uncertainties that lie ahead.