WPP (WPP)

 

Why equities are struggling and new era at WPP

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Why equities are struggling and new era at WPP

Even though investors have moved past the Syria missile strikes and are working on the basis that there will be no extended conflict or market-adverse retaliation, equity markets are struggling for direction. This lack of positive reaction is a potential concern and is an indication that investors are wary.

Until early this year, global market sentiment was strong enough to keep pushing markets higher unless there was a reason to go down.

As Trump policy has shifted from being supportive of equity markets to being distinctly negative, and early hints of the next potential slowdown in growth begin to materialize, we are now in a situation where markets are looking for reasons to justify current valuations.

Hence, good news does not have much longevity since investors are a little bit more cautious in the current climate.

Source: interactive investor               Past performance is not a guide to future performance

Typically share prices fall on a CEO departure and this morning is no exception, with WPP (WPP) shares lower, indicating just how much Martin Sorrell matters to the world's largest advertising company.

However, the question is whether this fall presents a buying opportunity for investors?

The potential breakup of the company is one factor in the plus column for investors, as the sum of its parts may create shareholder value, as is the idea that Mr Sorrell's departure may allow the business to properly review its internal strategy to make sure that it remains central and relevant to the hugely dynamic and constantly shifting advertising world.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.