Kensho Stats

Record October M&A boom doesn't bode well for November's returns, history shows

Jeffrey Immelt
Andrew Harrer| Bloomberg | Getty Images
Jeffrey Immelt

The General Electric-Baker Hughes oil and gas combination and the telecom tie-up of Century Link for Level 3 made this month the biggest ever for announced M&A.

October surpassed even the epic dealmaking surge in January 2000, according to S&P Market Intelligence.

What does that mean for your money?

At least in the short term, we found that it's not great for your portfolio. CNBC PRO, using hedge fund analytics tool Kensho, ran the numbers on what happens during the month after the nine previous biggest M&A months of all time.

As you can see below, the S&P 500 struggles one month after these big M&A periods, trading in the green only a third of the time.

Our search found that nine of the 10 major sectors were negative as well the month after a record dealmaking month. However, the technology sector, which was often the center of this deal activity, still managed to stay in the green.

Bottom line: At some point the deals get so big, they become less about value creation and more about executives' egos and big paydays. The market's historical performance following these M&A flurries bears that out.

--With reporting by Evelyn Cheng

Disclosure: NBCUniversal, parent of CNBC, is a minority investor in Kensho.