Natural resources stocks lift FTSE ahead of Powell’s speech at Jackson Hole and Nestlé boss departs after tricky year

“The FTSE 100 ticked higher on Friday, gradually clawing its way back towards the all-time highs it made in May,” says AJ Bell investment analyst Dan Coatsworth.

“The progress of the index was largely driven by natural resources stocks and came despite some weakness on Wall Street overnight. Hopes of a blockbuster 50 basis points first rate cut from the Federal Reserve in September are receding ahead of chair Jerome Powell’s address to the Jackson Hole Symposium later today.

“Tech shares were worst affected in the selling on Wall Street on Thursday, although the movements paled into insignificance compared with the volatility seen earlier in the summer.

“The markets will be looking for Powell to provide clues not just on the Fed’s next meeting in September but also for the remainder of the year and into 2025.

“Like the support act for Taylor Swift coming out second, Bank of England governor Andrew Bailey has the tough slot of following Powell at Jackson Hole, but he may, nonetheless, provide some important insights on the likely trajectory of rates on this side of the Atlantic.”

Nestlé

“Swiss multinational food and drink conglomerate Nestlé might have caused a few traders to spill their Nescafés this morning as the company announced the abrupt departure of CEO Mark Schneider, to be replaced with company veteran Laurent Freixe.

“It’s not a huge surprise to see Schneider head out the door given the company’s uneven performance in recent times. Schneider’s strategy of focusing on core areas like pet food, coffee and nutritional products had largely been successful during the first part of his tenure but over the last year the situation has deteriorated – partly thanks to an uncertain backdrop but also as a result of problems of Nestlé’s own making.

“The botched integration of a new IT system was never going to reflect well on Schneider and the company also faces a probe by the French authorities over the potential use of illegal purification methods on bottled mineral water.

“The immediate share price reaction might suggest the market would have preferred an outsider to come in and shake up Nestlé rather than someone who has held senior positions at the company for years.

“Freixe will face the same challenges as his predecessor and counterparts at rival consumer goods firms – how to persuade shoppers, particularly in the West, back to premium brands after a period when households have been tightening their belts and trading down to cheaper alternatives.”

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