The recovery seen in global stock markets since the panic-selling experienced at the beginning of February is facing a pretty severe test with the FTSE 100 dropping once more today and moving back below the 7200 level.
After failing to take out a key resistance level above 7300 at the start of the week the bears are now looking to take advantage and should there be much further weakness before the week is out then a retest of the lows underneath the 7000 mark becomes increasingly likely. The pound is little changed against most of its major peers today with the only notable moves coming against the antipodean currencies, with the Australian dollar falling back and the Kiwi rising.
UK manufacturing falls for 3rd straight month
The latest economic data released on the UK’s manufacturing sector has raised some concerns of a slowdown, with the PMI index falling for a 3rd consecutive month. A print of 55.3 remains fairly high from a historical perspective and well above the 50 line that denotes expansion/contraction but the recent trend is clearly one of drifting lower.
Today’s release was the lowest since last summer and recent macro data has seemingly taken a turn for the worse in the UK with the latest retail sales disappointing and unemployment unexpectedly ticking higher. A closer inspection of the survey suggest that capacity constraints are limiting growth in the sector, with supply chain disruptions prohibiting growth. There were some positives however with new orders and hiring both rising but on balance today’s release is mildly disappointing.
WPP (LON:WPP) plunges after worst year since 2009
The world’s biggest advertising group, WPP, has seen its stock hit with a wave of selling this morning after posting their worst set of results since the global financial crisis.
Shares have fallen more than 10% on the news and now change at hands at a 3-year lows. The firm announced a 0.3% drop in like-for-like revenue with reported billings down by 3.9% to £55.6B on a constant currency basis and 5.4% on a like-for-like one. The poor performance was expected by some who believe that Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL) have made a substantial impact on the digital advertising environment and that WPP is starting to feel the squeeze. Despite CEO Martin Sorrell’s protestations that this is not the biggest factor behind the slump - he attributes it to the “short-term focus of zero-based budgeters, activist investors and private equity” it appears on balance to likely be the root cause.