Earnings from Big Tech are boosting U.S. stocks, but across the Atlantic, there are signs of wavering health in the U.S. technology sector. The focus in London is on WPP, the world’s largest advertising agency, whose results can act as a bellwether for the global economy and specific sectors.
Unfortunately, WPP’s first-half results have disappointed, causing a 6.8% plunge in its shares. The company has reduced its full-year outlook and highlighted a lag in revenue growth in the U.S., mainly due to a decrease in spending by tech companies.
WPP CEO Mark Read addressed the situation, stating, “Our performance in the first half has been resilient with second quarter growth accelerating in all regions except the USA, which was impacted by lower spending from technology clients and some delays in technology-related projects.”
This news should be noted by technology investors.
During tough times, companies usually cut back on advertising budgets, making reports from WPP a valuable resource for early indications of a sector slowdown.
Therefore, WPP’s results could potentially be signaling a slowdown in the U.S. tech sector, which has experienced significant growth this year with the Nasdaq up 33% and tech stocks lifting the S&P 500.
