Earnings from Big Tech may be adding buoyancy to U.S. stocks on Friday, but a key stock market bellwether from across the Atlantic could be indicating wavering health in the U.S. technology sector.
While earnings reactions from
Apple
(ticker: AAPL) and
Amazon
(AMZN) are in focus in the U.S., across the pond in London the focus is on advertising giant
WPP
(
WPP
). As the world’s largest advertising agency, its results can be a bellwether for the global economy and specific sectors alike.
Shares in WPP have plunged 6.8% on the back of the company’s first-half results. WPP slashed its full-year outlook and revealed that revenue growth lagged in the U.S.—as a result of weakness from spending by tech companies.
“Our performance in the first half has been resilient with second quarter growth accelerating in all regions except the USA, which was impacted in the second quarter by lower spending from technology clients and some delays in technology-related projects,” said WPP CEO Mark Read.
Technology investors should take note.
When times are tough, companies often trim ad budgets first, so reports from WPP can include early signs of a sector slowdown.
That may be exactly what WPP is signaling for U.S. tech, which has been on a tear so far this year with the
Nasdaq
up 33% and tech stocks lifting the
S&P 500.
Write to Jack Denton at [email protected]
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