The stock market is a wonderfully moody creature of capitalism.
Today, apparently unhappy with Publicis Groupe results, the big players in the sector were punished. Publicis was smacked around the most, of course -- dropping about 6%, despite the fact it actually showed some improvement from previous quarters, just not as much as analysts anticipated.
That might be Publicis Groupe’s fault. How do you think analysts arrive at their guesstimates about how a particular company will do? You guessed it—a good bit of it has to do with what the investor relations team whispers in their ear when they come calling, looking for guidance.
So maybe the Publicis Groupe team over-promised a bit on how much better the company would perform in Q3. Oops.
But not content with delivering a good spanking to Publicis, the market also smacked around the other big players too — including Omnicom, which just days earlier posted results that beat expectations, as well as Interpublic and IPG. All by a couple of percentage points, on a day when the Dow and the S&P 500 ended in positive territory.
The market’s justice is swift. And fickle!
On Tuesday, after Omnicom beat expectations, it and others in the sector were rewarded with gains, including WPP, Interpublic and ….Publicis!
The gains were short-lived, but gains nonetheless.
It does make you wonder about the short-term thinking on Wall Street. Of course, thinking may not be the right term, given that algorithms may be calling the shots here.
Analysts, I don’t envy you.