When it comes to merger and acquisition (M&A) activity Capstone Partners founder and president John Ferrara says "We are in an abnormally prolonged M&A down cycle." At this point, he doesn't expect M&A activity in 2024 to be able to catch up to that of 2021, when there was a backlog due to the COVID pandemic.

That doesn't mean he is negative, however. "All the fundamental demographics are in place for this bottle to be uncorked," he tells Yahoo Finance, adding that a recovery is "long overdue."

Ferrara says that the Federal Reserve beginning its interest rate cutting cycle could be the spark that reignites activity, saying it will bring "people off the sidelines" because they are more confident about the direction of interest rates and the cost of doing deals.

Watch the video above to hear why Ferrara says he watches CEO sentiment.

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This post was written by Stephanie Mikulich.