4. 6385 right now. The bloomberg dollar index coming off at 1,256. 57. The dollar has gained a lot of strength. You see that coming through in the pepsi Earnings Release where they give you everything in Constant Currency because the dollar has been a headwind. Nymex crude coming down another . 17. We had a big jump yesterday after the hamas invasions in israel. But not nearly to the levels we saw last week. At one point, wti traded over 95 a barrel and is now at 86. 21. Jon in canada, we are watching Energy Stocks catch up because the stocks were closed yesterday. That has been a notable sector. Generally, the fact you are seeing more optimistic tones on wall street. It is playing into the technology names. Busy week for amazon with prime day kicking off. Shares are up about 1 . Sticking with ecommerce, alibaba knows that game well. We saw some of that bloomberg reporting around potential stimulus for chinas economy. That has been helping names based out of china. You mentioned the pepsico story. We will talk to the cfo, coming up. But the fact that you saw a relatively strong profit picture has helped components like cocacola and celsius, which has got a lot of attention from investors this year in the drink sector. Pepsico, the Distribution Network provider forgetting that product into the market, so that stock is up 5 . Matt looking forward to that discussion because the outlook is fantastic at pepsi. Even with glp1 starting to catch on. Lets talk about stocks and yields. Stocks rising, yields falling. It is the march of fed speak driving that. Atlanta fed president Raphael Bostic joined the chorus again. Rapahel we have got to get to 2 . I expect there will be bumps along the ray but i think we are in a good place for policy to get us to 2 . Jon lets get more perspective. Chief correspondent of global macro markets, liz mccormick. Would we do you think we would be hearing this kind of messaging from fed officials if we were talking about these multiyear highs for yields in the bond market . Liz yeah, i dont think so. For a while there was a lot of people saying there is crickets from the fed. Do they not care . As we know, the fed has been trying to figure out and it is not an easy process if they are restrict ive enough. But these yields breaking so high, it seems to have kind of brought this corral of fed speakers saying the bond market is doing the work for us. I think investors have taken solace in that saying, maybe the worst is over. Of course, we have minutes tomorrow. That will show is more of they were thinking. We have Consumer Price data thursday and inflation data friday. We have been through this. Things could change but there is a feeling of relief. Stocks and bonds doing well today. Maybe the fed is done but that will prove to be seen, but that seems to be what the fed is saying. Maybe we did enough for now. Matt we played some tape of Raphael Bostic. He has been singing this song for a while, talking about passive tightening as inflation comes down, real rates go up. Have there been any speakers that you think have changed their minds since the dots . When we saw the dot plot there was a clear 12 out of 19 saying rates are going to finish the year one hike higher. Liz that is what i was thinking. That was a lot, 12 out of 19. I would say lori logan speaking yesterday put out a compelling speech. She has been known as a hawk but she talked about the wonky stuff in the bond market. If it is just because the economy is stronger, that is not good for the fed. There are other forces that may have done the work and, of course, the jefferson vice chair came in later in the day and said similar things. I think you are getting some of the more hawkish folks coming in and that is why we have not seen these acrosstheboard declines in bond yields in a while. We have seen head fakes before but i think there has been a strong messaging from the officials that there is a lot happening. We have to see how the higher yields play out on the economy. That will cause more pain. Jon helpful context. We will continue to track it all. Liz mccormick joining us with insight on the market moves and that fed speak. We are just getting word on the automotive front about General Motors in canada reaching a tentative agreement with the union that has been trying to reach a deal with gm. This covers approximately 4200 employees at facilities largely in ontario, which is where we see the bulk of activity in the auto sector. Gm canada saying work will resume at all facilities this afternoon. I want to bring in keith naughton. We had seen these gm workers opt to strike because they could not get to the finish line on a deal. Maybe we should remind the audience that while the United Auto Workers had decided to deal with each of the big three individually as part of this ongoing strike action in the United States, the union in canada opted to reach a deal with ford. They were able to reach a deal and they were hoping to have similar types of deals lined up with gm and stellantis. It would appear they have a tentative agreement. What is your reaction . Keith the difference in canada, they were following the tradition of pattern bargaining. Ford set the pattern with the 19 raise for younger workers sorry, veteran workers, and 20 for younger workers. Gm pushed back because they have younger workers in canada. This contract was going to cost them more than it was costing ford. But the strike lasted less than a day. They have been able to bridge the gap and the plants are going to keep running. There was additional pressure on gm because they have this widening strike in the United States. They could not be double struck. They have important plants in ontario for silverado pickup trucks as well as large engines coming out of ontario that go into gms big suvs. Matt well this agreement in canada and the one they made with ford help the uaw come to a better agreement with the same companies in the United States . Keith hard to tell it this point. Gm did have a breakthrough, as you recall, last friday with the uaw. They agreed to have the future battery plants come under the master contract agreement. That is big. Something the uaw is going after at ford and stellantis. Certainly, getting a deal in canada takes one big thing off gms plate. Ford also has a deal with canada. The two of them can move forward to try and resolve the strike in the United States. Matt i am sure we will hear from you again this week. Keith naughton covering strikes across north america. Really focused on ford in detroit as well. We will get more from keith as that story revolves. Coming up, pepsi raises its forecast and says it has not seen any impact from dieting drugs. We will discuss that with the cfo, next. This is bloomberg. The first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com jon this is bloomberg markets. Im Jon Erlichman with matt miller. Time for the stock of the hour. Pepsico, that stuck up today. The snacks and rings giant showing off its Pricing Power in the latest quarter. There is a look at the shares. The company has managed to boost prices in seven straight quarters. That has helped bottom line performance and the outlook as well for the full year. Matt absolutely. Hugh johnston is the cfo of pepsico and joins us to talk about the earnings and the outlook. For me one of the most interesting issues is this ozempic issue. We have seen so much fascination in markets and a report from walmart says those that get those prescriptions go on to buy a lower calorie basket of food when they get to check out. You do not see any impact from these drugs so far . Hugh no. Good to be with you both. We cannot detect it in our numbers at all. I recognize there is a lot of speculation, particularly in the market, on the implications of these drugs we are studying it closely. The only things i would offer is there are real barriers to consumption. Number one, the form of the doses, injectable, which is something people have to get over. Number two, they are quite expensive which suggests it is going to take a while for adoption to get broad. And i know there are other forms that are being looked at, pills and the like, but those are a higher dosage of the active ingredient which may lead to further side effects. The point of it is i think the adoption will likely be pretty slow. As consumers migrate their eating habits, we will migrate with them. I do not think snacking is going away. It gives them an energy boost in the afternoon. It is a social there is a social element. I think snacking will continue but like we did with zero sugar soda, to the degree they want to involve their forms of snacking, i am sure we will be right there with them. Matt i love snacking also. Huge fan of munching through frito lays, but if i want to aim toward healthier products, what is your greatest hope in terms of something in the pipeline . What do you think is going to be the biggest hit as the world attempts to move toward healthier consumption . Hugh i think it will be a lot of smaller changes rather than a big hit. I think as people decide to migrate more toward protein, you will see us add protein into the products, to the degree they want more whole grains we are capable of that reduced sodium, also well within reach. The r d capability is second to none. I have got confidence we will be able to evolve the products and combine that with the great brands we have and combine that with the distribution and customer relationships we have, i am certain we can evolve through all of this. The other piece of it is, is it is one potential headwind but there are so many tailwinds attached to this company. The fact people are busy and likely want to destructure meals more. We have not remotely tapped into that potential. It is perhaps being a little over read right now as a single variable that will affect the company when there are so many positives. Jon on the subject of international and you have a lot of those brands that represent pepsico behind you the world is watching israel. What can you tell us on the operations front in israel for your business . Hugh right now, this is very real time. Our concern is for the safety of our associates and their families. That is our top priority by far. That is something we are devoting a lot of time to. We are not producing right now, so we have suspended production. That is something that we will continue to examine when we feel it is safe enough for that to happen again. But we are it is more about the safety of our colleagues and their families. Jon obviously, trying to see where a geopolitical situation goes is challenging. I think in this inflationary environment knowing where we are going to be in a year has been challenging. You were on your Conference Call today on the inflationary front, some commodity inflation, about the guidance you provided. I believe you provided some context on your own buying, almost looking ahead nine months and how that works for your business. Can you clarify that for the audience . Hugh yeah, happy to. This was something we put into place years ago shortly after i took over as cfo. We made the decision we want to buy commodities in advance by about nine months. It varies commodity to commodity. The reason we do that is not because we are trying to guess the market but give our internal sales people as well as our customers certainty in terms of our costs. Therefore, the certainty in terms of the pricing in the marketplace. Our percentage increase is equal to our percentage increase in pricing. By virtue of creating that certainty on the commodities side it allows us to manage the business more effectively and partner with customers to create growth plans that work well for them, and also really well for us. That is what gave us the confidence to give the guidance into next year. We have good visibility into our costs well into next summer. Jon great. Thanks. Matt we both thank you. Jon, please. [laughter] jon we do. Hugh was talking about israel. We will get more on what is happening right now, how it could reshape the geopolitical landscape. This is bloomberg. If youre trying to get a view of the whole organizational Financial Health and youre trying to do that through multiple systems, that makes it very, very cumbersome. Its not just tech, its not just people. Its how they Work Together to provide that experience to the customer. As a finance organization that is what you want to do. Jon this is bloomberg markets. Im Jon Erlichman with matt miller. We have been awaiting commentary from President Joe Biden on the actions the u. S. Is taking to support israel. The president had a phone call with Prime Minister netanyahu about that. We want to get perspective as we await comments from the president. Senior resident scholar at the Arab Gulf States Institute in washington, hussein ibish. One of the things you have been writing about is the president s efforts to reshape the strategy landscape within the middle east and how that will be impacted by what is now unfolding. What would be your guess on what the conversation between the president and the Prime Minister was like . Hussein it probably did not touch on the question of the saudi deal. I think it is all about security and stability in southern israel. And the question of israels intentions in gaza. I am sure President Biden promised Prime Minister netanyahu all of the support he wants. But he may also have had a cautionary note or he might be holding back the next few days about going too far in gaza. Perhaps the biggest trap of all would be for israel to decide to reoccupy gaza in a protracted way, so, with boots on the ground, and that could be a giant trap for the israelis, allowing soldiers to be picked off by hamas and other rebel groups on a continuous basis. Matt i wonder, clearly, in the arab states, for the most part, the people are propalestinian but what support is there for hamas . Any human sees others executed in front of family members or the rape and torture we are hearing reports of and that is difficult to support. Hussein i do not think there is a huge body of support for hamas. I think there is sympathy with the palestinians. On the one hand a lot of arabs would be thinking the israelis brought this on themselves. They needed to do something to not deepen the occupation to allow the palestinians to breathe in the west bank and gaza. When you keep millions of people without citizenship, without rights, without a state of their own, they are going to be erecting and violence. At the same time a lot of arabs have real doubts about the Muslim Brotherhood which is what hamas is. They are generally not popular in most of the arab world. There will be mixed feelings. I think the main atmosphere in most arab countries is apprehension. Apprehension about what is going to happen to the people of gaza who are very different from hamas, and what the impact is going to be on measures that might have brought stability, like a u. S. Saudiisraeli deal. Matt the u. S. And israel seem hesitant to blame iran directly. But they are funding the terrorists. How did the other states feel about iran funding hamas . Hussein they are not happy with iran but they wanted they started their own dialogue with iran because they felt exposed. They did not feel the United States had their back fully so they reopened relations with iran. But they do not like iran. They do not like hamas with the exception of qatar. One of the things that could happen if the israelis try to eliminate hamas as an entity is that qatar, which hosts hamas leaders and has been paying the bills at the request of the u. S. And israel and others for the payroll of Public Employees in gaza, plus turkiye, where a lot of hamas leaders live. Matt unfortunately, we are running out of time. I hope we can get you back on. Hussein ibish, thank you very much. This is bloomberg. Romaine a dovish fed narrative taking hold in the bond market. Live at bloomberg headquarters in new york, im romaine bostick. Katie and im katie greifeld. We are kicking off to the closing bell in the u. S. We are looking at another update. The s p 500 rallying 0. 7 , the Third Straight day of gains. Same if you look at big tech. The nasdaq 100 up about 0. 7