European markets are set for another day of losses after the first case of the coronavirus was reported in the US. A news conference by President Trump late yesterday did little to assuage investors’ nerves; instead US stock futures are dropping this morning, pointing to a lower open on Wall Street later in the day.
Yesterday was the first day that the number of new cases outside of China exceeded those in China adding fuel to concerns about the effect of the virus on other economies. In London the most exposed stocks remain airlines, holiday companies, miners and oil producers. However, topping the lineup of FTSE losers is WPP which shed 15.6% after it reported a slowdown in revenue in the last quarter of 2019. The world’s largest advertising company also warned that it did not expect 2020 to provide better results after it lost some of its major clients.
Providing some counterbalance to the sliding index were Hikma Pharmaceutical and British American Tobacco, both reporting increases in revenues. BAT surprised investors with better-than-expected full-year profit generated from traditional tobacco sales and higher pricing. Hikma also threw in a generous dividend increase following a 10% increase in operating profit.
Brent crude continues to drop
Brent crude has been further eroded by the spread of the coronavirus and has slipped briefly below $52 overnight. It is currently bouncing in a channel between $52.6 and $52.84 with little to prop it up in terms of fundamental news. The OPEC Vienna meeting may offer some respite towards the end of next week but before then the pandemic is likely to push prices even lower.