Must read: WPP slumps, tariff threats, record copper price

GLOBAL MARKETS

European markets have opened slightly higher, with the FTSE 100 trading modestly in the green although gains are tempered by a sharp drop in WPP (LSE:WPP) after its profit warning. 

Tariff uncertainty continues to take centre stage after Donald Trump announced plans for a 50% levy on copper, lifting US copper futures to a record high. He also threatened a 200% tariff on pharmaceuticals and said there would be ‘no extensions’ to the 1 August deadline. 

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US S&P futures are pointing modestly lower after markets oscillated between gains and losses on Tuesday, with the major averages closing around the flatline and the Dow down 0.37%. Gold is trading around a one-week low and the Japanese yen has weakened to two-week lows against the US dollar. Meanwhile, oil appears to be retreating from two-week highs. 

China’s consumer price index hit 0.1% in June year-on-year, topping analysts’ expectations to mark the first increase since January thanks to e-commerce shopping events. However, its producer price index slumped by 3.6%, the biggest drop since July 2023 and below expectations for a drop of 3.2%. 

Aside from tariff updates today, investors await the latest FOMC minutes and the OECD employment outlook report.

WPP

WPP has downgraded both its full-year profit and organic revenue outlook. It expects organic revenue minus pass through costs to decline by between 3 and 5%, reduced from between flat and down 2%. 

A guidance miss on the top and bottom line has been attributed to a ‘challenging trading environment’ and macroeconomic pressures. WPP has faced an uphill battle with stiff competition from rivals like Publicis Groupe SA (EURONEXT:PUB), which overtook WPP to become the world’s largest ad agency last year. Plus, the rapid ascent of very high-quality AI content risks cannibalising WPP’s core offering.  

Furthermore, the ad giant faces significant C-suite uncertainty after CEO Mark Read’s announcement last month to step down at the end of the year.  

Shares in WPP tumbled 15% this morning, plunging to the bottom of the FTSE 100, with investors spooked by the profit warning. Since Read took over as CEO in September 2018, the stock has more than halved in value.

ESSILORLUXOTTICA

Shares in Essilorluxottica (EURONEXT:EL), the group that owns brands including Ray-Ban and Oakley, are rallying in Europe, after Meta Platforms Inc Class A (NASDAQ:META) reportedly acquired an almost 3% stake in the eyewear maker. 

Meta has already been collaborating with the company, creating the Ray-Ban Meta AI collection. There has been some speculation about a stake acquisition after the FT reported (around a year ago) that Meta was interested in buying a stake in the business. 

The acquisition would be a major vote of confidence in EssilorLuxottica and suggests the company is on track to successfully ride the AI wave. It also points to Meta’s ongoing commitment to, and belief in wearable technology as a growing trend. In February the eyewear brand said 2 million pairs of Meta Ray-Bans were sold since launch in October 2023 with strong acceleration last year. Plus last month, Meta introduced Oakley Meta AI glasses too for athletic performance enhancement. 

Meta’s Oakley collaboration could be very exciting since wearable technology in the fitness is already tried and tested and has seen some huge successes such as smartwatches and fitness trackers. Fashion wearable tech might be a more of an uphill climb.