hi, everybody. welcome to the "wall street journal report." i'm maria bartiromo reporting today from london in the midst of new talks of an aid package for troubled greece. i'll have the views from the other side of the pond and talk about investing in europe and how the economy is doing here. should it be part of your portfolio, and just how do you do it? my conversation with one of the most powerful women in business, pepsico ceo indra nooyi. on what brings the fizz to her company and where she sees the profits bubbling up. how burberry keeps up with the times. the "wall street journal report" begins right now. >> first here's the day's

headline. ty? >> thanks very much, maria. here's a look at what's making news as we head into a new week on wall street. in a new move to boost the sagging housing market, the federal government has a bold new plan to help homeowners. it will include initiatives to refinance loans and get homeowners who owe more than their house is worth into new government-backed mortgages with lower payments. it would also temporarily reduce the payments for borrowers who are unemployed and looking for a job. and it will also encourage lenders to write down loan balances to help lower monthly payments. it comes on the heels of two disappointing pieces of housing news. sales of existing homes fell for a third straight month. it was down 0.6% in february. and new home sales, they were down as well, fourth straight month there. they tumbled 2.2%. record low. in spite of that, the dow hit an 18-month high for the week with a triple-digit gain on tuesday, took a breather on wednesday and was flat on thursday.

the markets were flat on friday. google is shutting down its search engine in china, the world's biggest market. the company said it will not tolerate censorship by chinese authorities and is sending people to its unfiltered hong kong website. it's sometimes the gift that stops giving. but now federal regulators are issuing new rules about gift cards. they will soon have to be valid for at least five years, and there can be no penalty fee. now back to maria with the rest of the program. >> thanks so much, tyler. here in london concerns are similar to those in the u.s. fragile recovery in place. worries about jobs, the budget. and, of course, the slow environment. but how are the markets doing here and should some part of your portfolio be invested in europe in one way or another? we have the ubs chief european equity strategist and jarred lyons, chief economist. good to have you here. thanks for joining us. jared, how would you characterize the global recovery? >> a global recovery is very

weak. it's much stronger in the east. in the west, in the states. and in europe it's very, very weak indeed. basically the u.s. economy is in difficulty, but the europe economy is naturally in worse shape. if you're sitting in europe it's time to think as bad as things are here in the states it's actually worse over there. >> sounds like you are assessing joblessness continuing to persist in 2010. would you say an actual recovery is a 2011 affair? >> in eastern, certainly. in europe we have obviously many different countries. germany is in pretty good shape because the german export machine is doing really well, sending exports to china. but other european countries is the likes of greece, portugal, ireland, down key evaluations but all together tied to the euro so greece's position, those problems have really come to a head and in this last week we've seen the key economies in europe, germany and france trying to club together, maybe with the imf's help.

but the reality is the smaller economies in europe have no easy way out. >> you're seeing a bit of power shift to asia as china grows, and we're seeing real vibrancy there at a time that europe is slow and the u.s. is slow. but sounds like a real devastating situation here in europe. karen, do you agree with that? as an investor, how do you want to approach that kind of a story? >> perfect question. absolutely perfect. economists and equity people, me, people and european equity strategists look at european equity markets very different than the european economy. equity markets have a real opportunity of opening up. one of the reasons is american investors won't touch europe right now. january, february, won't touch it. concerned about the currency. is it going to roll over? we've got weak economic growth, but if you look at companies in europe, they are very international in nature. about 45% of the quoted market is actually selling outside of europe, outside of the euro area, outside of europe, and profits can do quite well even when economic growth is weak.

and because the americans won't touch europe and a lot of international investors, you're really starting to see a gap in valuations opening up for european companies, and there's some great opportunities. >> opportunities in terms of putting money to work at the bottom, putting money to work at very depressed levels? is that where you're seeing that? >> sure, opportunity means -- yeah, people have ignored the market and you've got companies that have been left behind but you look at an s.a.p. such as oracle, saw that during the past week on television, the difference in results and such. both had okay results but s.a.p. is trading at a big difference to okayal. price has gone up so you've got big international players with brand names. last year was the international company play in the u.s., wasn't it? currency was weak. u.s. internationals did really well. i think if the currency keeps weakening in euro, that game could gain once we get a bit of comfort with the economic -- you know, the sovereign cries and the debt crisis in greece. if we start to feel a little bit more comfortable with that, i think you'll see some money drifting back into the large-cap

internationals in europe. >> and do you think that there is some opportunity that you see? i know that we're looking at a deteriorating situation here as it relates to what's happening with the debt issue in greece, and the impact in the euro zone and a slow economy. how does china play in here? >> we're seeing the shift in the balance of power shift from the west to the east. the winners in this will be the countries that have the financial resources like china, qatar, saudi, the countries that have the natural resources and the countries that have the ability to adapt to change, so the companies that are settling into those markets, the companies that are in the financial sector or in the retail sector, the international will do well. the problem is that the u.s. and the european economies face a jobless recovery so you don't want to look to companies in europe or in the states that are setting domestically. you want to look to ones serving internationally and that's a problem because while interest rates in america and europe stay low, it means that politicians will start to become more protectionist in their outlook. >> yeah. >> and that's a challenge, so we need to look for politicians to

think global about the challenge from an investor's perspective is to try to pick the global brands without getting caught up by the ones that are bogged down and pulled down by the economic weakness, either in the states or in europe itself. >> it's a great point because certainly the economic upset has created just that, some protectionism around the world. good you have to on the program. >> thank you. >> so appreciate your time today. >> thank you so much. >> up next on "the wall street report, the pepsico show. how one of the largest consumer businesses is faring and i'll talk to the woman wearing one of britain's most iconic brands. take a look now at the stock market figures as we end the week. back in a minute.

soft drink and snack company pepsico has increased a new line of sweeteners. and increasing a line of healthier snacks. among the invasions attempting to attract customers in a less profitable environment. earlier i spoke with the brand's ceo indra nooyi at yankee stadium, the site of their annual analyst meeting and asked one of the most influential female executives today how she sees the economic recovery right now. >> i don't know, maria. this one worries me, i tell you. in the western world, especially in the united states, what i have not yet seen is the construction worker coming back to work. and i think you need that worker coming back because a true test of the economic vitality of the economy is when that worker is employed, and we're not seeing

that as yet. >> what would it take for you to create new jobs right now? i know earlier you said that you're expecting low double-digit eps growth in 2011 and 2012. what is it going to take you to move, pepsico and other companies just like you to move from the cost-cutting phase of things to the growth part of things where you actually are going to create new jobs? is it a policy out of administration, something else? >> i think it comes down to is the core economy doing well? and larry summers said something i'll never forget, we can see gdp growth and statistical recovery and a human recession. that's not good enough. because that's not going to be long-lived. we need to see sustainable job creation. we need statistical recovery and human growth, employment growth. if that happens, confidence is back in all of private enterprise, and we can start hiring and growing and planning

for the economic future. we're still refreshing our talent and still hiring in many places including in the united states. but i think we really want companies to come back to a hiring cycle, we need confidence there's going to be job growth in the country. >> a number of executives have come on the program saying there are too many uncertainties in 2011. not just higher taxes which we know are coming but also health care. as a leader in the global community, what do you think about this? how is this going to change your business? >> well, the bill just passed so give us some time to go up and stud to and understand the implications for the country. but first thing we have to do is pause as americans and say here's a president that put everything out there to go sell a bill that he felt was right for the american public and it's right for a lot of people who don't have health care insurance. i think at this moment we have to sit back and say there's a president that delivered on a promise he made during the campaign. as far as the implications for pepsico, we have a lot of people studying the implications of all of that, what's the final markup in the bill and over the next

weeks and months we'll have a better perspective. >> let me ask you about the rest of the world. the last time we spoke you were in china outside of beijing somewhere. you were talking about the new plant that you were putting up there and you were planning on doing 13 plants in china. talk to me about the opportunity in china. today, of course, you know the news that google is coming out and is going to shut down china because they can't be censored. you haven't obviously had any issues with the chinese government because you're creating a plant there. >> it's actually -- the chinese government has been very good to us. we just got permission to build another 14 plants, and so we've got 22 plants on the ground already. we're going to build another 14 plants. we're growing, you know, double digits in china. >> this is an important region for you. >> very important region and especially recently the chinese government has been particularly good to us and has been supportive of our strategies both on the beverage and the snack side because we also do good for farmers. we develop agri. in a lot of these areas i think we're real partners with the chinese government. the one thing about pepsico is

we're a great global company headquartered in the united states, but we're local in every country in which we operate because you can't export soft drinks and chips. you have to be local. i mean, there's the value density. >> and you're creating jobs all over the world. >> creating jobs everywhere. >> so can you break it down for us as far as the international landscape? are you still seeing much of the vibrancy of the company coming outside of the u.s. in the emerging markets? and how is europe doing? a lot of people talking about that. >> east and the middle east, the markets are extremely vibrant. i think japan has always been slow market. but all of the other markets east to the middle east extreme vibrancy, especially markets like india. we're seeing a level of excitement that's unbelievable. we're also seeing a lot of vibrancy in south america, south of mexico. especially markets like brazil. a lot of optimism. people are feeling great about the market. i think the slowness is really in east and western europe and north america and mexico. so those are the markets we need to have targeted attention to and figure out how to get the

unemployment rates down. it's not just gdp growth. we have got to address jobs. >> and most important message you want to leave with analysts and investors today as you continue this two-day analysts meeting? >> that pepsico is an incredible company with a great heritage and great past and even brighter future ahead of us. >> my thanks to indra nooyi, ceo of pepsico. up next on the "wall street journal report," the fashion view from europe. their raincoat was worn by british soldiers 100 years ago. now burberry is a luxury brand with global reach. how is business doing now? become a fan on facebook. you'll find us on facebook at wsjrwithmaria. i drove my first car from my parent's home

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the united kingdom's largest luxury retailer is the burberry group, a 154-year-old company that once made rain coats for the british army. this iconic brand now has global scope and high-end consumers. joining me now is burberry group ceo angela ahrendts. good to have you on the program. you're an american woman from the midwest running this luxury brand. how is this area of retail doing right now versus other areas? when you think about a raincoat, more than $1,000 is a lot for some people to pay for a raincoat. >> it is. but i think the difference is when they know that they're

going to get a return on that investment for 20 years on average, i think it's psychologically a very different purchase. it's an investment purchase, not just a fashion purchase. >> here in europe people are talking about the problems in greece, talking about an economy that is slow, and yet there seems to be a real shift towards the east. you have increasingly a lot of focus on asia, and you've got what, 44 stores in china. >> mm-hmm. >> what's -- where's the growth coming from? is it asia, middle east, u.s., europe? where would you say is really the main bright spots in the business? >> you know, it's actually interesting because we just reported every market up almost double digits with america up single digits. so, again, great brand. pretty solid around, but would i tell you that the emerging markets, like you said, you know, china, asia, markets where you have currency on your side, uk, korea or high growth markets are absolutely outpacing, india, latin america, china is a little further up on the trend curve right now. >> burberry's runway show during

london's fashion show also created a 3-d experience. you tied locations around the world. how is technology, whether it's 3-d or social networking, mobile phone applications changing the business? >> it's changing it dramatically. and dynamically. i mean, you just -- it can't even be part of your five-year plan it's happening so quickly. but i think what it is it's allowed you to go back to some of the old traditional metrix because the reach is just unbelievable. we hit a million friends on facebook today. >> that's terrific. >> the largest in the sector by a long shot. but christopher goes on every week -- >> that's the creative director. >> creative officer christopher bailey. incredibly talented. he talks to the consumer about what's coming a week before the show he's in the design studio talking to cuters is about what's coming and how exciting it is. it can be so inclusive. you've got the music. the customer can really feel the brand and the culture of the

brand. >> i wonder how that's impacting the consumer shopping experience. when you're looking at a show in 3d, does that impact the clothes, the way they look? in other words, can you see the fabrics more clearly? can you get a better idea of the cut? tell me about the shopping experience and how it's changing for people. >> absolutely. you get much more detail and much more detail. and in our case you get a lot of sherlings and buckles and details. depending on the sophistication of your system, i mean, can you zoom in, et cetera. we actually did something else that was really fun and kind of another first is actually did runway to reality so those people who were e-mailing in, you could actually click and buy and have that item delivered in four weeks. >> wow, that's terrific. you're really focusing on the young consumer, younger per demographic, and i guess choosing emma watson from the harry potter movie as the face of the brand tells you that. tell me about that demographic. can young shoppers afford

luxury? >> a lot of them can, but i -- we call that the millennial consumer, but age is limitless and timeless. emma is young but her look is classic. we don't want to do anything to block the core consumer. they're vital and we have a nice going children's business so we >> played pretty -- we say cross-generational, full. >> burberry's signature plaid, that really is -- it screams burberry. everybody knows that plaid and it days back to the 1920s. yet you have wannabes around. you're suing retail discounter tjmaxx for selling counterfeit, that version. burberry item and that signature plaid. how big of a problem is that? >> in some respects you're flattered about it because the hotter you get, people try to do it. but we keep reinforcing it and trying to add innovation.

christopher will cut it on the bias and i think the more innovative we make it the more obvious the fakes become. >> are you a big shopper of the items in the collection, or do you wear the same sort of signature items? i mean, how has the brand dictated what you're doing? >> ah, what a great question. it's funny because when i started, no, but we put in a great team of people, great design team, great merchants. now i will tell you a funny quote. we had a runway show and after the show everyone was talking and one of the guys said it's so fabulous that i have to get another closet and the other guy said, no, i have to move because we just live in the clothes. we just wear it, and i think that's a big part of the success, you know, because we're feeling what the customer wants and we are the customer. >> happy to have you on the program. see you soon. angela ahrendts, ceo of burberry. up next on the "wall street journal report," a look at the news this week that will have an impact on your money and the place where british monarchs take the throne is getting a new

look. more on that when we come back from london this weekend.

for more on our show and our guests, check out the website wsjr.cnbc.com. also find a link to my blog, investoragenda.cnbc.com. i hope you'll check it out. now a look at stories coming up in the week ahead that may move the markets and impact your money this week. on monday the government

releases data on total personal income and spending. then on tuesday, the latest reading of the s&p/case-shiller home price index will be out. that measures home prices and the changes in prices in 20 cities across the country. the latest reading of consumer confidence from the conference board as well. thursday, april 1st, total auto and truck sales out. on friday the labor department releases the very important latest employment report. we'll see if the economy is finally beginning to create jobs. but the stock markets are closed that day in observance of good friday. and finally today, the view from london. behind me is westminster. a building with more than 1,000 years of history. the coronation church since 1066, queen elizabeth ii was crowned there in 1953. last year a $34 million publicly funded renovation project was announced to include a museum, a new elevator and decadent new crown-shaped roof. the facelift is expected to be