Daily market update: WPP, Jet2, drug companies, copper miners, housebuilders

“There was a solid showing across European equity markets despite Trump’s tariff onslaught ramping up a gear,” says Dan Coatsworth, investment analyst at AJ Bell.

“Copper prices soared on the prospect of 50% tariffs on copper imports into the US. The metal price had already been moving higher as buyers second-guessed tariff threats and stockpiled copper.

“Shares in metal producers Antofagasta, Glencore and Anglo American edged back on the news as investors worried about uneven flows in commodity supply chains.

“The drip-drip of tariff information threatens to increase investor frustration as many people would rather get all the bad news out of the way in one go, so they can get a clearer idea of the lay of the land.

“Pharmaceuticals and semiconductors were in investors’ sights as Trump hinted at new levies for these industries. Shares in AstraZeneca, GSK, Novo Nordisk, Sanofi and Roche were all in the red after the US president said tariffs on pharma products could be as high as 200%.

“The pressure is now on for drug companies to expand US production facilities so they are effectively on the doorstep of American customers. Boosting the manufacturing sector and creating more jobs is central to Trump’s tariff strategy, and the likes of AstraZeneca already have plans in motion to expand their US footprint.

“Tobacco stocks led the FTSE 100 higher after bullish broker commentary. Jefferies said the sector had ‘reduced risk and more reward’, highlighting British American Tobacco as its top pick.

“Despite fierce political, regulatory and societal headwinds, the tobacco industry has proved to be resilient and continues to generate significant amounts of cash. That means big dividends and big share buybacks, which is music to investors’ ears.”

Housebuilders

“Seven UK housebuilders have agreed to pay a total of £100 million to make a potentially messy legal case go away.

“It was probably the quickest decision ever made in the boardroom as the last thing housebuilders want is to have their reputation soured by a drawn-out investigation into anti-competitive practices. The industry has already been through various crises in recent years, such as concerns about poor build quality, mis-selling around leaseholds and fire safety.

“Housebuilders certainly don’t want to be dragged over the coals again, particularly at a point where the outlook for the property market is starting to improve amid falling interest rates.

“The £100 million figure seems like peanuts to make a big problem go away. Housebuilders will be happy, and so will the government as it can now say there is extra money going into the affordable housing pot.

“The housebuilders aren’t admitting they’ve done anything wrong, yet they’ve probably used up their get out of jail free card.”

WPP

“If Mark Read had not already announced his departure from WPP at the end of the year then the company’s latest overview might have seen him come under significant pressure. Make no mistake, this is one ugly trading update.

“While the company faces its own specific issues and broader structural challenges, the downgrades to forward guidance may provoke some nervousness elsewhere given WPP has traditionally been a bellwether for the global economy.

“After all, businesses ramp up advertising spend when they are feeling confident about their prospects and dial it down when the reverse is true. For all its recent problems, WPP remains a company with a global footprint and a significant breadth and depth of operations.

“The downward revisions to the expected revenue for 2025 are material and demonstrate the danger of managing market expectations with an optimistic hat on, as a hoped-for improvement in new business wins has failed to materialise.

“While the uncertain economic backdrop is clearly unhelpful, some of its peers have fared better and WPP’s share price halving under Read’s tenure cannot be attributed to this alone. Advertising agencies have faced pressures from the dominance of Meta and Google-owner Alphabet in online advertising, with AI another potential threat.

“Current chair Philip Jansen – who used to run BT and has a background in corporate restructuring – faces potentially the biggest challenge of his career as he looks to appoint the right man to succeed Read and provide support for a turnaround in WPP’s fortunes.”

Jet2

“Jet2 may have announced a robust set of full-year results and unveiled a meaningful hike in its dividend but, in signalling some headwinds for the remainder of this year, it has prompted some turbulence in the share price.

“Passenger numbers are healthy and that has helped support double-digit increases in revenue and profit, but the company warns the current geopolitical and economic backdrop is limiting visibility.

“Customers are leaving it later to book and are being more driven by price after a period following the pandemic when some seemed prepared to prioritise their week in the sun whatever the cost. Although it is trading in line with expectations, management is reticent to provide firm guidance on profit for the current financial year and that rings alarm bells for the market.

“Jet2 has seen considerable volatility in oil prices of late and has worked to establish some certainty around a key element of its cost base by hedging its fuel exposure.

“While clearly not immune to the challenges facing the wider sector, Jet2’s focus on customer service is creating significant loyalty to the brand and lends credibility to its ambition to be the UK’s leading leisure travel business.”