Conclusion: Politics, tech and plenty of capital
Following a record-breaking year, the US M&A market is taking time to digest recent deals, and uncertainty regarding broader macroeconomic and political issues is leading some to take a more cautious approach. Three broad factors are likely to influence activity for the remainder of 2016:

Politics at play
The political climate may lead many to proceed with caution. The UK’s Brexit decision ensures that economic uncertainty will continue in Europe, and the US presidential election in November may also cool the ardor for transactions. Stricter rules limiting tax inversions—a structure used for several pharma megadeals in recent years—may also give pause for thought.

Tech deal traffic
There are signs of more mid-size deals in the tech sector, with suggestions that the decrease in overall deal values is not reflective of the continued strength of this space. The number of actual deals has remained stable, and the economics for tech M&A remain viable. Moreover, the rapid pace of technological change can make it more practical for established tech companies to buy innovative start-ups rather than investing in their own R&D channels—a process that would be facilitated by many buyers’ cash-rich balance sheets.

Money on the table
There is certainly available capital should companies wish to pursue an M&A route. Firms are still buying stock, which indicates that they have the resources for transactions. But many of the more exciting opportunities, such as fintech, are in the early stages, which makes it difficult to anticipate any major moves.
The rest of 2016
As we go to print in late July, we see a noticeable slowdown in activity. We think the US M&A market is taking a short breather and will come back strongly in September, absent some big exogenous shock. Most of the conditions for a busy end of year remain in place: Lots of cash, low interest rates, strong stock markets (notwithstanding the elections and Brexit) and plenty of strategic imperatives in many industries that can best be satisfied through acqusitions.