What’s going on here?

Offices in the UK and US are more deserted than they’ve been for a generation, according to news out on Tuesday.

What does this mean?

Companies have been coaxing workers back into offices, yet despite the tempting promise of slightly subsidized vending machines and the occasional free banana, most folk are refusing to give up the good life they discovered during the pandemic. But with the fluorescent lights still on, the cost of keeping an office simply isn’t justifiable for many firms. That’s left offices in prime locations like New York, San Francisco, and London emptier than they’ve been in 20 years, according to research firm CoStar. Commercial property prices are sinking as a result, less than ideal when the sector makes up around 10% of the US economy. So for the country’s sake, that sprinkling of free fruit better start looking a lot more appealing.

Why should I care?

For markets: We’re behind the times.

Builders seem to have missed the memo, mind you. Central London’s expected to complete a record number of new office builds this year, with developers saying there’s enough demand for energy-efficient buildings to keep hoisting up the scaffolding. The most likely explanation, though, is that most projects were funded before the work-from-home movement was born. So unless these new spots are snazzy enough to lure folk in, they could end up empty too.

The bigger picture: Your dime’s on the line.

If businesses don’t move their ThinkPads into these new offices, the firms that financed the developments will be left empty-handed. Often, that’s private firms like British Land, which has already seen its stock pulled back down to pandemic-level depths. But for massive projects like the Penn Station redevelopment, it’s Federal, New York, and New Jersey governments in charge of the pursestrings. So if they keep giving new offices the green light while workers stay firmly on red, the public wallet will be left a lot thinner.

What’s going on here?

PepsiCo reported tidy third-quarter earnings on Tuesday, showing at least one thing’s organic about its business.

What does this mean?

Inflation might have whole countries down in the dumps, but it’s not going to get PepsiCo. The drinks and snacks giant pulled up prices to even out higher costs, confident that loyal shoppers wouldn’t dare switch to a supermarket alternative or, worse, a certain famous competitor. And the move paid off: organic sales – excluding brands that were bought or sold – bulked up by 9% last quarter from the same time last year. Full of reassurance, the beverage aficionado nudged its profit growth outlook up to 13%. That was just the ticket after a year of so-so performance: investors gave the stock a pop upward after the news.

Why should I care?

For markets: Defense can be the best offense.

Investors usually turn to defensive firms – ones that can bag sales no matter what’s going on elsewhere – when the economy’s in a tough spot. PepsiCo’s included in that category, because no measly downturn is going to turn folk off their favorite fizzy drinks and salty snacks. Still, before the recent update, PepsiCo’s stock was down 9% this year, lagging behind the S&P 500 index. The future is only looking foggier, though, so this recent change of mood may signal that investors are starting to flock to the safety of carbonated chemicals.

Zooming in: Loyalty is everything.

PepsiCo’s strategy worked, sure, but mainly because its most loyal customers were willing to pay more for their favorite products. But actually, fewer of the brand’s items were picked off the shelves last quarter than the same time last year. That’s not an immediate worry for PepsiCo, but investors will be looking further ahead. If the company prices out even its biggest fans, or if sales stagnate when inflation cools down, the firm could end up looking flat.