Q2 2023: Mission “Impossible”: A Soft Landing
- One year into an unprecedented cycle of interest rate increases, the task of an economic soft landing, once deemed nearly impossible, appears more and more likely. Economists and investors alike doubted the possibility of achieving a soft landing, defined as simultaneously lowering inflation and avoiding a recession. As of the end of Q2 however, inflation appears to be settling while consumers continue to spend, GDP growth persists, and unemployment remains low. This helped drive the Q2 public market rally, bringing the S&P 500 up 16% YTD.
- Q2 2023 Medical M&A lagged modestly compared to 2022 (152 vs. 168 transactions) but exceeded Q1 2023 by 14 announced transactions. Consumables and Disposables was once again the leading segment, with 24% of all transactions. This was closely followed by Service and Therapeutic Devices, each 22% of all volume.
- The second quarter represented a welcome rebound for Medical Device public companies after a slow start to the year. The Orthopedic index remained the top performer, finishing the quarter up 19.4%, slightly below the S&P 500 Growth Index of 21.9%. The Diversified Diagnostic index was the laggard of the group, with YTD performance down 1.3%. Companies will look to continue this momentum in the second half of the year, while hopefully seeing a reprieve from early-year macroeconomic headwinds.
Read Medical Technology M&A Pulse Q2 2023 Full Report
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