What Happened?
A number of stocks jumped in the afternoon session after a new trade agreement between the United States and Japan spurred a broad market rally.
The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Therapeutics company Gilead Sciences (NASDAQ: GILD) jumped 3.1%. Is now the time to buy Gilead Sciences? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Omnicom Group (NYSE: OMC) jumped 3.1%. Is now the time to buy Omnicom Group? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company QuinStreet (NASDAQ: QNST) jumped 3%. Is now the time to buy QuinStreet? Access our full analysis report here, it’s free.
Zooming In On Omnicom Group (OMC)
Omnicom Group’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 4% on the news that the company reported second-quarter earnings and revenue that surpassed analyst expectations.
The company announced a non-GAAP adjusted earnings per share of $2.05, which was $0.03 higher than the consensus estimate of $2.02. Revenue for the quarter came in at $4.02 billion, beating the anticipated $3.95 billion. This represented a 4.2% increase in revenue compared to the same period last year. Investors were also encouraged by the company's 3.0% organic revenue growth for the quarter.
The solid performance was driven by an 8.2% rise in its Advertising & Media division and a 5% increase in Precision Marketing. In a statement, CEO John Wren pointed to the "resilience and agility" of the business despite ongoing economic uncertainty. The company also confirmed it is on track with its proposed acquisition of rival Interpublic, having already received regulatory approval in 13 of the 18 required jurisdictions, including the United States.
Omnicom Group is down 10% since the beginning of the year, and at $77.82 per share, it is trading 26.2% below its 52-week high of $105.49 from October 2024. Investors who bought $1,000 worth of Omnicom Group’s shares 5 years ago would now be looking at an investment worth $1,382.
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