mark: police have responded to reports of shots fired at dallas airport. they say a woman fired shots near a ticket counter before

officers shot and wounded her. no one else said to be injured. love field serves as a hub for southwest airlines. the war in ukraine may be entering a new phase. the head of am i6 said russian forces likely to run out of steam. now that ukraine has received long-range missile systems, there may be multiple reasons to take advantage. ukraine's casualty rates falling. allies under pressure to end the war with the world headed toward an economic downturn. a danish drugmaker has won formal approval in the european union for its vaccine against monkeypox. over the weekend, the world health organization declared the outbreak a global health emergency. hong kong reportedly plans to

reduce hotel quarantine for arrivals. a two color health code system will be introduced. one proposal calls for five days of hotel quarantine after that, arriving travelers would be issued with a health card for two days that would prohibit them from entering high risk areas. global news 24 hours a day on-air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. >> welcome to bloomberg markets. >> the s&p 500 is in a wait-and-see kind of mode. it has been waffling.

you are not seen major conviction up or down. the nasdaq is going to be a crucial piece. outperformance of the last week but that is not the case this week. it is underperforming. this 10 year yield at 2.81. once again the question in is the bull case for treasuries getting wider as we hear recession calls? as those yields move, the dollar is weaker. i wonder if that is adding to the marginal gains in the stock market. brent crude $104 a barrel. innate volatility context, not a lot conviction >> obviously, we are seeing specific moves based on this macro themes. with the tech earnings that we

will be watching so closely, we are saying cautiousness. microsoft and apple under pressure. you were talking about the higher price of oil. that is helping a component like chevron, but those higher energy costs are showing up in a lot of earnings so far. newmont mining taking a hunting today, often 12% as it deals with higher costs. kriti: a lot to digest. earnings stories will the front and center. mcdonald's earlier in the is session, as well as chipotle, could tell us quite a lot about the restaurant industry, how it is dealing with covid, staffing, inflation and that dollar weakness or i should say dollar strength joining us is leslie patton. leslie, thank you for joining us

mcdonald's for me is important but what is on your radar? leslie: thanks for pointing out the currency picture, but what is going to be top of mind this quarter is demand, sales. are we going to receive weakness, signs of people shifting to less expensive menu items? that says something about the economy? jon: i am glad you mentioned menu items. you have highlighted the way by which these restaurant operators have been changing to navigate this tight labor market. we said this with the parent company of all of garden and will be watching it with don's, fewer menu items. leslie: that started during the pandemic. restaurants cutting down the venue quite a bit, 30% or more

-- the menu quite a bit, 30% or more. restaurants have figured out that makes things easier, lowers costs and consumers do not really miss it. kriti: let us talk about the staffing situation. there was a time when a lot of those rage -- wage increases was in front and center, eating into their earnings. this time around, do we see the same thing -- higher commodity costs, higher wages? is demand going to be the bigger risk and --? leslie: we have heard a lot about commodity, inflation and labor over the industry the past several years. that will be in focus but really what could change is consumer demand. that has held up relatively strong for these chains that take out focused restaurants

during the pandemic but if we see slowdown, that is not good for the industry. jon: helpful preview of what we will be watching this busy earnings week. leslie patton with the westrum story. -- restaurant story. apple planning to offer a rare discount for customers in china. top of the line iphones will be on sale for four days starting july 29. this comes as china forces at companies including foxconn to operate under restrictions tied to the covid outbreak. let us bring in bloomberg intelligence senior analyst who has been tracking the latest on apple. the reminder of how important the market china is at a time where many have been waiting to see the recovery on the covid

front and the demand story emerged as china. what have you made of these developments? >> china is 20% of revenue for apple, a big market. because of covid restrictions, you cannot manufacture and sell in a timely manner. you want to clean inventory out before the next model kicks in in september or october. it is important to get rid of them so you can start fresh. kriti: put that into context. we heard from walmart, target to say that they have massive inventories they are trying to get rid of, but does the same type of inventory buildup apply to apple? anurag: it is unusual. they normally do not do that. i do not think it is a brand issue or an issue with the quality of what apple sells.

it is a problem with the supply chain as well as travel restrictions or opening up top -- shop restrictions in china. jon: as we watch what happens in china and in the quarter for apple, is there a law that all of corporate america can take away? or are they in their own boat? this is a company that has proven its ability to keep prices high. this is a rare for them to make a change on prices. even the supply chain, apple is good at navigating it. kriti: that is a -- anurag: that is a different equation for apple, but two things to remember and that is the strong dollar. the estimates are not down as much as we would have liked them and to be just on the dollar strength.

that is a, not the real economics of the business but the strong dollar is going to have an impact, not just for the next quarter but guidance going into the corridor after that. the second thing is because of restrictions in china, we may be having issues about getting the parts, which then the first the sale of certain products, whether it is the iphone or the max -- macs. those are two things people are not really focused on parent kriti: what about services revenue? in peak: times, one major indicator of demand was how many people were going into the stores. what about that services revenue? anurag: in the last quarter,

they did guide that they are going to include double digits. that is going to the ok, but going forward, we do see some deceleration, largely because they are running into test comparisons. because of the nature of some of these products, we do not expect that to be in the will digits forever. they are trying hard to get tv rights. they are also going to generate from advertising. these streams should help them to get back to that lower double digits in service rates. in the near term, we may see some pressure. kriti: always a pleasure to have you on all things apple. how much more hawkish can the federal reserve get?

75 basis points priced into the market. is that a fair assumption and that she and this is bloomberg. ♪

kriti: this week is a big one, not just earnings but the fed as well, which may have to inflict more pain on the economy. analysts say it will take a recession. 75 basis points priced into the market. how much more hawkish do they need to be? mike: they do not know the answer. forward guidance full get squished into jay powell's news conference wednesday. the left couple of eating's, he said we could do 50 or 75. i do not think he wants to get that specific. some numbers show insulation they beat he. -- may be peaked.

that university of michigan number, inflation expectations fell. if inflation has peaked, maybe they do not need to go as hard and that avoid session. jon: the other factor out there is how far ultimately the fed is willing to go with actual rate hikes. you have mike wilson who feels that equity investors may be prematurely tried to predict when you might see that he. -- peak. for those watching jay powell this week and trying to determine how far the fed will go, what you be watching for? mike: we will not have a new forecast. powell is probably not going to give us anything different in terms of a terminal rate. the fed thinks it should just over 3%. he will probably tell us that

date will go at least to neutral. he will not say consequently may want to stop and look around at that point. the problem is that nobody really knows at this point. economic growth indicators are slowing, except for jobs and that is what you would expect. inflation if it is starting to roll over, maybe you do not have to go as high as 4% to get the economy under control. such a weird time coming out of this pandemic and with the work going on. it is hard for anybody to make an accurate prediction. kriti: the site about the dollar. this defect going to do anything about it? -- is the fed going to do anything about it? mike: the will tell you that they cannot accept by raising interest rates. you use the trade-weighted

dollar, not the 1 wall st focuses on. the main impact of the strong dollar will hit in 2023 or 2024. rate increases will hit then. if they think the dollar is going to have an impact, they argue for less in terms of raising rates. jon: so many considerations. thanks. a busy week for you, michael mckee. for more on what to watch, let us bring in dana peterson. set the stage with your own expectations on what rate move we will see the u.s. federal reserve this week. dana: we expect the fed to raise interest rates by 75 basis points dependent upon the data. the data has been next.

jobless claims rose. but when we look at housing prices, the are continuing to rise at housing activity is slowing. even our own measure has declined, indicating that things are slowing down. that suggests that the fed probably not need to go 100 basis points. kriti: let us talk about inflation. we most recently got 9%. how much higher code that print go? dana: we are thinking we peaked with that last number you sent it a bit -- if you dissect it a bit, prices are being driven by external factors. the core measure has been sewing in terms of year on year increases, suggesting that some of the internal measures are

coming off as people shift away from buying goods and shift towards services. jon: putting out the pieces together, the market trying to figure out where the economy lands. it recession -- recessionary worries and floors. walk us through how that plays out for the economy. dana: we think the fed is going to raise rates into restrictive territory, about 3%, for the end of this year, maybe getting to 4% early next year. that means the u.s. economy is going to different to a recession. inmate be shallow and reef but certainly slower growth as the fed is raising interest rates. that will be flanked by stagflationary periods, where you have low growth but high inflation. we are not expecting inflation

back down to 2% until 2024. kriti: one of the big questions is how much of an impact the dollar will have on company's bottom lines. how worried are you about the undying strength of the dollar? dana: the dollar it makes it less expensive for companies to import things. consumers love buying cheap goods from abroad. that is more negative for companies that have international exposure for companies -- in economies that have weakening currency. it pens on the type of company. kriti: dana peterson of the conference for. a crucial time. we thank you for your insight. tune in for the coverage of the

said decision this wednesday at -- for the fed decision this wednesday at 1:30 p.m. can safe shipment corridors to get supplies out of ukraine be successful? this is bloomberg.

jon: time for what it's worth. our data point is 10%, the amount of global wheat exports that came from ukraine last year. the challenge this year has been shipments stec in limbo -- stuck in limbo. there were encouraging developments last week on the

belief you see some shipments move then we set the attack on odessa. david westin spoke with the council about whether this new deal will last. >> in this war, it often comes down to one person, vladimir putin. he will decide whether this agreement holds. the u.n., turkey, ukraine going to to hold the but it comes down to russia, how important it is for them to get sanctions exemptions for their own grain exports, how they are perceived in the developing world -- obviously out to a bad start. it is too soon to write it off but so far it does not make sense why the russians would have signed it and 24 hours later violated it. kriti: that was the president of

the foreign counsel of relations. it is such a crucial time to talk about this. we are waiting for more supply on the market when there are fewer and fewer people who can provide that supply. jon: we saw wheat moving higher on that news. there is one part of the equation about where the economy goes. the other part is tied to geopolitics hard to know where things go on that front. kriti: stick with us. this is bloomberg.

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mark: keeping you up-to-date with news from around the world. president biden's doctor's essay covid-19 symptoms have almost completely resolved. -- say his covid-19 symptoms have almost completely resolved. he is experiencing residual nasal congestion and minimal hoarseness. he tested positive for the virus four days ago. he is being treated with paxlovid.