The FTSE 100 extended its winning streak to nine consecutive sessions, closing at a record high of 9,760.06 despite investor woes surrounding advertising giant WPP. The company experienced a sharp plunge in its shares, which dropped 17%, following a warning that its year-to-date performance remained at the “low-end of expectations.” WPP’s third-quarter revenue revealed an 8.4% decline to £3.26 billion, with a 3.5% dip on a like-for-like basis. More strikingly, revenue less pass-through costs fell 11%, down 5.9% like-for-like, signalling significant pressures within the firm’s core operations.
WPP's new chief executive, Cindy Rose, candidly described recent results as “unacceptable” while emphasising that “there is a lot to do.” She pledged to simplify operations and reinvigorate growth by focusing on data, artificial intelligence, and enterprise technology solutions aimed at clients’ expansion. The company downgraded its 2025 outlook, now projecting a 5.5–6.0% revenue decline less pass-through costs and a slightly compressed operating margin of around 13%. This announcement comes amid a grim 12 months for the firm, where its market capitalisation has plummeted from £24 billion in 2017 to just £3.9 billion recently. Despite securing $1.4 billion in new business during the third quarter from major clients including Estée Lauder and Unilever, WPP faces challenges rooted in declines across its North American and Chinese markets, as well as a pronounced drop in its ad planning and buying arm, WPP Media.
Across European markets, the broader scene was quieter. Paris’ CAC 40 edged down by 0.5%, while Frankfurt’s DAX 40 remained largely flat. In the United States, equity markets were mixed, influenced notably by Meta Platforms’ shares tumbling nearly 10% following its announcement of increased investment and operating costs after a hefty tax provision in the third quarter. CEO Mark Zuckerberg defended the strategy, expressing confidence in aggressively front-loading capacity building to future-proof growth.
Meanwhile, Federal Reserve chair Jerome Powell cast doubt on expectations of another interest rate cut in December, signalling a more cautious stance amid uncertain economic conditions. Powell underscored that the recent quarter-point rate cut to around 3.9% was part of a broader easing cycle but stressed that further cuts are “not a foregone conclusion.” Analysis from JPMorgan and Bank of America highlighted that Powell’s remarks were notably blunt and strident in pushing back against market bets on a December reduction. The Fed chair explained that the labour market challenges stem more from a shrinking labour supply—driven by tighter immigration policies, deportations, and demographic shifts—than from a faltering demand, limiting the effectiveness of traditional monetary easing.
These comments mirror a broader theme articulated by the Federal Reserve during its October meeting, held under the cloud of a government shutdown which disrupted economic data flows. Inflation remains above the Fed’s 2% target, though signs of easing have appeared in sectors like rents and services. Concerns remain over corporate layoffs and a slight rise in unemployment to 4.3%, yet the Fed maintains that there is no broad labour market deterioration. The central bank has also indicated it will halt the reduction of its balance sheet holdings from December 1 in an effort to provide market support.
Across the Atlantic, the Bank of Japan kept its interest rates steady at 0.5%, and the European Central Bank opted for a third straight hold on rates, maintaining the deposit facility rate at 2%, reflecting a broadly unchanged inflation outlook. Deutsche Bank’s Chief European Economist Mark Wall noted that despite external uncertainties, including US tariffs, Europe continues to exhibit economic resilience, which is tempering calls among ECB policymakers for rate cuts.
Monetary policy shifts and central bank decisions have influenced currency movements, pushing the US dollar higher against major currencies. By Thursday’s close in London, the pound had fallen from 1.3236 to 1.3149 dollars, the euro slipped from 1.166 to 1.1565 dollars, and the dollar/yen exchange rate rose to 154.11 from 152.10. Treasury yields also climbed, reflecting market adjustments to Powell’s hawkish tone.
Among UK equities, banking giant Standard Chartered rose 1.9% after forecasting it would meet its return on tangible equity targets by 2025, a year earlier than previously expected. Technology firm Computacenter jumped 5% on strong third-quarter performance, while energy stocks like Ithaca Energy and Harbour Energy gained following reports that the UK government might scrap its windfall tax on the oil and gas sector earlier than planned.
On a more positive note for corporate activity, TT Electronics soared 59% after accepting a £287 million takeover bid from Switzerland’s Cicor Technologies, signaling ongoing consolidation trends within the technology manufacturing sector.
As markets brace for data due Friday on Canadian GDP, Eurozone inflation, and US Chicago PMI, investor sentiment remains cautious amidst ongoing geopolitical and economic uncertainties. No significant UK corporate events are scheduled, allowing focus to remain on macroeconomic drivers shaping market directions in the short term.
📌 Reference Map:
- Paragraph 1 – [1] The Independent
- Paragraph 2 – [1] The Independent, [2] Reuters, [5] WPP official release
- Paragraph 3 – [1] The Independent, [2] Reuters, [5] WPP official release
- Paragraph 4 – [1] The Independent, [3] Reuters, [4] AP News
- Paragraph 5 – [1] The Independent, [3] Reuters, [4] AP News
- Paragraph 6 – [1] The Independent, [4] AP News, [3] Reuters
- Paragraph 7 – [1] The Independent, [3] Reuters
- Paragraph 8 – [1] The Independent
- Paragraph 9 – [1] The Independent
- Paragraph 10 – [1] The Independent
Source: Noah Wire Services