Equity rebound runs out of steam

Equities are nursing losses on the final day of the trading week, with the FTSE 100 down 30 points as the close looms. 

After a quiet day, with little to energise further bullish sentiment, equities are struggling to muster any strength for further gains. Markets find themselves stuck in no-man’s land, rallying from the lows of the week but unable to push higher. Trade wars remain high on the agenda, along with a slowing global economy (witness weakening growth in Canada’s labour market and the UK GDP figure), but, in a world where the amount of global bonds in negative yield territory continues to rise, equities remain the only game in town. If the weekend passes without incidence, then the buying pressure of Tuesday-Thursday this week could easily return. Indeed, the weaker economic data from the eurozone,  the UK and Canada only really strengthens the case for more accommodative monetary policy, perhaps leading to further rate cuts this year from major central banks, even if trade wars do not intensify.

WPP’s recovery continues, and the shares have reacted well to today’s figures. If the new CEO can stem client losses, and the cautious tone from the CEO should also help to restrain excessive enthusiasm. If shareholders continue to expect the worst, then any upside provides a surprise and helps boost sentiment in the longer-term.