Direction of Interest Rates whei he tes on capitol hill tomorrow. In the meantime, a relativ calm has settled over wall street. The dow industrials today fell just 22 points to 26,783. The nasdaq was up 43 and the s p added three points, but that calm could leado volatility when Jerome Powell starts speaking. As usual, a fed chief faces a tough task. He is under pressure from the administration to cut Interest Rates, but he has said thatne ry policy should not be influenced by shortterm political one thing is clear though. The economy may be growing, but that growth is slowing. Today some of the pieces to the economic puzzle fell into place. And the first piece came from pepsi. The Company Reported higher quarterly profit and sales. Now, part of that was pepsi specific, tied to its new products and higher pricing, but the company also said its results were helped by a strong consumer, which accou ts for mon twothirds of economic activity. Sarah eisen has more. Eporter consumers are inlging in freitos and cheetos and pepsi in a smaller portion. It is highlighted by 4. 5 organic revenue. Here are some of the highlights. Fritolay ctinues to be a big driver. Because more people are buying smaller bags of snacks orle at t ten packs or 12 packs of small bags, pepsi gets morein pr out of it, which does drive sales growth. Also brand pepsi, especially those smaller cans, is growing, rtthanks also in to new flavors like lime pepsi or mango pepsi. And quaker is also growing again for th first time in years thanks to a big for some of its other brands that you find in your pantries like aunt jemima. Most of the portfolio right now of snacks and drinks is doingwe in most corners of the globe according to the cfo. E are seeing terrific results out of our north american biness. North american beverage is clearly doing better and all of our International Business is performing well, developing in emerging markets, growing about 8 . Reporter wha else i helping pepsico right now . A stronger consumer. E. At goes for the u. S. And around the gl i think consumers are healthy, and particularly with our level of products. We represent little treats that really make peoples days better. So wherever i look around the u. S. , whatever geography i look in, ieems like the consumer is in a pretty good spot right now and willing to spend on our products. Orter the market has caught on to the higher Growth Prospects of pepsico. Its stock, up almost 20 perps so f 20 this year outrunning arch rival kococacola. As pepsi showed today, it isn the growth camp. Im sarah eisen. The c next growth piee from the auto sector. New data out of mexico showed the u. S. Is importing a record numb cars and trucks from south of the border, just more proof that the u. S aut industry has become more entrenched in mexico despite threats from washington to tax vehicles imported from that country. Phil lebeau has details. Reporter from Assembly Lines in mexico to showroomsn the u. S. , the number of autos imported from south of the bord is picking up speed. In the first half of this year, the u. S. Or id almost 1. 4 million vehicles from mexico, up 13 compared to a year ago. And even though overall aut sales have edged lower in 2019, the percentage of models coming fromexico has increased. Thats because the number of vehicles imported fm that country is on pace to top the alltime high s just last year. All of this irritates President Trump who has complained about automakers blding cars a trucks in mexico instead of the u. S. St month he briefly threatened to put a series of escalating tariffs on everything imported from mexico, including auto parts and finished vehicles. Still, auto makers like bmw madr it c last month they would not shift production gears due to the president s threats. We will keep our plants and we will see how far that goes, and, as i said before, our Production Network is flexible but at this point in time we would not see any rean to change our current plan. Reporter with its new plant in san luis, bmw now ships its most popular car, the 3 series, in f the united statesm mexico, not from europe. And autoroduction south of the border is set to grow even more. Late this year or early next year toyota is set to open a new plant intr c mexico that y of which suvs, m are likely to be sold in the united states. Phil lebeau, nightly business report, chicago. Today mexicos finance minister abruptly resigne that heightened investor concerns over the new governments Economic Policy and its ability to meet some of that countrys financial challenges. Many saw carlos erzwa as committed to budget discipline just as the new administration ramp ps up social spending. His exit sent the peso lower. All right. Tomorrow as weeported fed chair powell will testify on capitol hill. In addition to answering questionsbout the economy hes also expected to defend the Central Banks independence. Steve liesman picks up that part of the story from there. Reporter the firing of central bank chief last weekend and President Trumps threats to fi or demote the feds al reserve arked a debate, should the reserve be oliticians. From ere is what top economic adviser larry kudlow said on the question before. Jay spowells job safe . Yes, i believe it is. I will say that there is no effort to remove him. I will say that unequirecally. At thent time, yes, hes safe. Reporter there was a in nite attempt by congress the Federal Reserve act passed originally in 1913 to give the fed independence by making it difficult though not impossible for president s to fire chairman and governors once in office. The idea, kp the politicians from pumping up the economy throughet my policy for political purpos. It wwritten, the heyday of Central Bank Independence lies behind us. In aorld of rising populism, esw interest r and bloated Central Bank Balance sheets, independent monety policy looks outdated. Kudlow said he believes in fed independence, but that word independent rate from an they o another planet. The fed reports to acongress,nd thats in the n i the constitution, and the fed is appointed, or the governors are appointed by the president. So i thi that in a daytoday sense certainly theyre independent, but tha doesnt mean that they shouldnt listen to advice from their elders. Reporter that advice from the president , also from kudlow, is for the fed to cut Interest Rates to acceleate growth as head into a coming election year, just the sort of thing a congress from earlier in the last century was trying to avoid by granting the fed independence. R nightly business report, im steve liesman. The number of job openings fell slighy in may but remained near record levels according to the labor dertment, a little more than 7 million positions were posted, suggesting that hiring isly unlio slow dramatically even though the economy has softened a bit. This report is considered a measure of labor demand. Small businesses are considered the engine of job creation in thicountry, and today a new survey showed thati set among Small Business owners dipped a bit, mostly due to the uncertaintyrom tariffs. But despite that pullback, optimism among busess owners does remain relatively high. So, yes, there are someco signs thatmic growth is slowing, but it is still considered healthy. However, the bond market is saying something e oe. The yie the shortterm treasury has been higher than longer term treasuries for more than 30 consecutiveng tra sessions. Now, it is a phenomenon which is known as an inverted yield curve, and that tends to happen before recessions. Were joined now by jackh mcintyre w Brandywine Global investment to talk more about this. Welcome, jack. Nice to have you here. It is nice to be here. You say that the treasury sending some warning signs to the Federal Reserve. What might they go . O i think the key message that the yield curve and the bond marke in general is sending the fed is that, hey, weve got low ilation and, you know, surprisingly it is not transitory. It is the secular disinflationary influences keeping a lid on cyclical the businesscycletype inflation. So the fed shouldnt be worried that inflation i going to get out of hand. They should be more worried that, hey, this low inftion is sticking around too long. I think you would agree theres a sub plot to all of this that will face jerom t poweorrow in washington. If he decides to cut Interest Rates at the end of the month, tdo you think t emboldens his critics who have been calling for a rate cut of some kind . And, conversely if it doesnt cut rates do you think he risks his job . So thats an interesting one because i think ahistorically of this stuff is supposed to be happening behind closed doors. Wer i just seein in the you know, the world now tweeting, it is all happening io front o eyes. So i think he is going to rise above it, and what is going to drive him is sort of the Growth Outlook for the u. S. , the Global Economy ineneral, inflation. So i think the fed is positioned to cut by 25 basis points at the end of this month and then we will have to go from there, no matter if they are get ng pressured to cut further or not. Theyve got to show they are purely or truly independent. So what is the data telling you then . How do you think the fed is going to look at it . I mean thes data slowing slightly. The u. S. Is still pretty strong, but thelobal economy is weakening. So where does that put us . So the way im thinking about it is that wha the fed should do isnt look at todays data. And youre right because the u. S. Economy is doing well, Consumer Confidence is still pretty high. But, you know, i think they need to think in terms of sort of an cutrance policy be preimptive. The Global Economy is softening and were not going to immune to that. Without inflation, why not cut rates now and send a message to the market say, hey, wait a second, were not cutting 100 basis points like the market has priced in b were going 25 and thank you very much, jack. Time to look at the upgrades and downgrades. 3m was downgraded today. Th sector from perform to outperform at rbc capital. The analy says 3ms reputation as a defensive highquality industrial stock is eroding he cited litigation and macro pressures facing that company. Price target, 176. The stock fell 2 today to 165. 70. March iot was dowraded to neutral from overweighted at j. P. Morgan. The analyst cited a deceleration in Industry Trends as well asth stocks valuation. Price target, 138. That stock fell more tn 1 to 139. 52. Squareas upgraded to market perform from underperform over at raymond james. The analyst cited the companys credit card business, which is gaining traction among other things. This call ends the rm bearish stance on the stock since january. Initiatedalysts coverage of chewy, with five placing a hold rating on the stock including. Organ stanl the analyst at that firm cites the companys valuation and says investorseed to wait for a pull back before buying. The price target is 33. The stock fell 3 3 to 29. Still ahead, is boeing on the verge of losing a title it has ld for years . Drugmakers got a lift today following a legal setck for a Trump Administration rule. The white house wanted drug manufacturers to list prices in their tv ads the rule was set to go into effect today before being blocked, and tt senthares of Companies Like merk, pfizer and e. I. Lily higher cut qatar plans to purchase aircraft from boeing. President trump announcement from the oval office. Theyre buying tremendous amount of planes, and buying commercial planes, a very large number of commercial plane from boeing, and we very much appreciate it. We will be signing a document today, a very large transaction. You will be invited to the signing. It is a transactionhat will be purchasing a lot of boeing jets nd a lot of money spent in our countr that means a lot of jobs. The president did not, however, indicate whether that deal was new one or whether he was referring to a previous one last month at th paris air show. Qatar said it would buy five boeing 777 freighters for about 1. 8 billion. Boeings delivers though sag, and that is where we begin tonights market focus. In first half of the year tco anys deliveries fell more than 30 . Boeing also reported no newde of its 737 max aircraft as that plane still remains grounded after two deadly crashes. At the same time rival airs is set to pass boeing as the Worlds Largest plane maker for the first i time seven years. Still, boeing shares were up a fraction to 353. 09. Sisco is buying Acacia Communications for 70 a share. Sisco hopes the deal will help its networking business by adding optical technologies. Acacia soared 35 to 64. 91. Shares of Dialysis Companies davida and fresenius dropped after word that the white house is planning toll ove the Kidney Disease treatment market. It is reporteresident trump will announce initiatives to have more kidney treatments perf rmed at homeher than in clinics with the governments intention to c reducee costs. Shares for the companies fell about 5in todays trade. After the bell levi strouse posted better than expec revenue thanks to an increase in wholesale denim. They saw sales increase the most in europe followed by asia. Shares initially dropped after hours but closed the session up more than 2 at 23. 66. It has been just over a year nce President Trump flew to wisconsin and declared that american manufactung had been reborn. The president helped break ground on the first u. S. Factory for Taiwanese Electronics manufacturer foxconn. But you know what they say about the best laid plans. Scott cohn is in wisconsin tonight. Reporter it is not what was advertised. This is the eighth wonder of the world. Reporter a 10 billion factory, building giant video displays, employing 13,000 people. A year later, still no plant and a tiny fraction of thes. J governor tony he waevers, elect last year as part of the backlash, is trying to adjust the state to the new reality. We now have clarity exactly what this firsthase is going to look like. Reporter in his First National interview about the project, evers says he and the company have now reached an understanding. Theyre going to be making smaller items, probably tablets, glass for cabinet tablets and phones and things like that. Theyre looking at, ihink it was 1,500 employees, which certainly is less thanhe original thought. But 1,500 is a far cry from 13,000. Well, we will take one step at a time. Reporter foxconn says it will keep its promise, hentually. E talked to our corporate and they have reiterated that we areed commi to 13,000 jobs. Reporter if it doesnt hire all of the workers, it doesnt get all of the money, but close to a billion is already spent on infrastructure and land. Kim neys house is the last one standing. Thew homeowners didnt k that we would be directly impacted until the day of the public announcement. Are you comfortable with how this was done . Well, no, i never have been. It became pt of the campaign, frankly, you know, donald trump coming and saying it is the eighth wonder of the world, all of that stuff. I think i think it set people up for expectations that probably could have been handled differently. Reporter kim mahoney doesnt know what to hope for. She and her husband refused a buy outoffer from t oer from th saying it was too long. Now their neighbors are gone and foxconn is closing why is Economic Development necessary to improve thing what is wrong with farming in rural areas . Thats why we moved out here. Reporter b with jobs and bragging rights at stake, thats a view most state governments just dont share. For nightly business report, scott cohn, mount pleasant, wisconsin. Tonight the Business World is mourning the loss of ross perot. The billionaire businessman andt onetime presil candidate lied at his home in dallas. He made his fortune in the tech industry, founding Electronic Data Systems in 1962 and then Perot Systems in 1988. But the public came to knoim when he ran for president in 19nd as anendent, emphasizing his political outsider status. He focused on cutting the national debt, protecting American Workers from outsourcing, and he was a critic of the north American Free trade agreement. He received 19 of the popular vote. It w the highest percentage won by an independent candidate since 1912. Ross perot was 89 years old. Virgin galactic is preparing for liftoff. Richard bransons venture is merging with an Investment Firm which wesult in the Company Becoming the first ublicly traded Space Tourism venture. Morgan brennan has more on the great space race. Reporter a turning point for investing in commercial space as Virgin Galactic now looks to go public. Social capitaledosophia will invest about 800 million for a 49 stake in the space company. Social capitalist who is personally investing his own money will become chairman. This thing looksike a Software Business under the hood even though it is flying people to space. So i think this is actually a compelling risk reward. Taking a general stepback, i think i had a really good track record right now of being ahead of some big trends, whether it was a transition to amazon, whether it was backing bitcoin, what i will tell you is i generally dont put my own principle capit on the table unless i think theres a compe