(1 April 2026 – Global) Investment Banks have recorded their best ever start to a year in the first quarter (Q1) on the back of a swathe of mega mergers and acquisitions (M&A).
M&A transactions in Q1 surpassed US$1.2 trillion in value according to LSEG data, despite momentum slowing in the face of geopolitical tensions in the Middle East and unpredictable President Trump policymaking.
Despite the outright number of deals sliding by 17 percent year-on-year (YOY), the enterprises associated with corporate actions were larger – and in many instances linked to companies investors sense are winning the AI race – increasing total deal flow value by 26 percent.
“This time around people aren’t waiting for things to get better, they are recognising that volatility is just part of life and they are working within that construct. The conversations aren’t stopping – companies are figuring out a way to make a deal to happen in this environment rather than waiting for things to normalise again. This is the new normal” stated Deutsche Bank Global Head of M&A, Sam Kim.
Deutsche Bank analysts have developed a “TACO Stress Index” based on the premise that “Trump Always Chickens Out” to rationalise the president’s decision-making process and mitigate the financial shocks caused by the war in the Middle East.
The index combines one month change in approval ratings, one year inflation expectations and performance of the S&P 500 & T-Bill yields with a higher figure indicating a greater chance of “TACO”.
“The TACO index aims to impose something that’s rational on what may otherwise be irrational-looking behaviour. The criteria used to measure the index are all things that Trump himself has talked about. We know that Trump, because he said this himself, measures his own success by what’s happening in the stock market. He talks about inflation and how his approval ratings prove he’s the greatest president ever, even if they don’t” commented University of Stirling International Finance Specialist, David McMillan
