Business

As equity multiples continue to levitate to unprecedented highs, recently rising above 20x on a trailing basis, now in the 99th historical percentile according to Goldman Sachs, the lack of bargains is reflected in the acquisition prices paid by PE firms. According to a new report by PitchBook, after reaching new highs in 2016, acquisition multiples inched even higher in the first quarter of this year, and as a result the median EV/EBITDA multiple hit 10.8x in 1Q 2017, up from 10.7x last year. That was the highest median multiple paid since the financial crisis.

The economy is now in VERY serious trouble.

The Fed’s own GDP models now show 1Q17 growth tracking at just 0.5%. This is DOWN from an original forecast of 3.2% in February. Put another way, the economy has begun contracting at a RAPID pace.

Moreover, we are getting numerous signals that the US consumer, the single largest driver of the economy, is not spending.

Paul Singer, whose Elliott Management has been waging a proxy fight with Alcoa spinoff Arconic, demanding CEO replacement, just achieved a key victory when moments ago the company announced that CEO Klaus Kleinfed has stepped down.

• Trump’s Renewed Focus on Health Bill Vexes GOP Tax Strategy (WSJ)
• Wall Street banker Cohn moving Trump toward moderate policies (Reuters)
• Trump Rejects Protests Over Tax Returns (WSJ)
• Merkel Calls on Erdogan to Open Talks in ‘Deeply Split’ Turkey (BBG)
• Turkish Opposition Plans Challenge to President Erdogan’s Referendum Victory (WSJ)
• Simsek Rules Out Turkey Elections Before 2019 on Erdogan Promise (BBG)
• Trump Is a Global ‘Instability Factor,’ Fillon's Top Aide Says (BBG)

Following Sunday night's resumption of trade after a three-day weekend, which saw sharp moves lower in US yields, the dollar and the USDJPY after Friday's disappointing CPI and retail sales data and the weekend's North Korea jitters, the mood has stabilized in light trading with Asian stocks advancing, Europe mostly closed for Easter Monday and S&P futures fractionally lower at 2,325 in early New York trading.