welcome to "the wall street journal report." i'm maria bartiromo. what did he say? what did he mean and what happened? a powerful force, and what it means to your portfolio. plus all of the president's men. i'll go one-on-one, wo one of the top white house xhuk advisers, lawrence summers. we'll talk fannie, freddie and where the economy is headed next. it's not your grandma's truck. from gourmet to high tech and it may be coming to your neighborhood. "the wall street journal report" begins right now. this is america's number one financial news program "the wall street journal report." now maria bartiromo.

here's a look at what's making news as we head into a new week on wall street. a massive yore haul othe nation's financial system is now law. president obama signed a sweeping reform act just this past week which was enacted in response to the financial crisis that began in 2008. the law creates a council of federal regulators that oversee the system and defect risk. financial entities whose failures hamper the system and housed within the federal reserve. earnings drove the markets higher most of the week last week. the dow snapping a two-day losing streak on monday and rose again on tuesday and on thursday on strong profit news. the markets continued up on friday. not all of the earnings news was good. some big companies falling short on revenue expectations including johnson & johnson, ibm, yahoo and amazon.com. but most companies did come ahead of analyst expectations, apple had a blowout quarter for one, coca-cola, wells fargo, morgan stanley all beating earnings and revenue estimates.

as did 3m, caterpillar, at&t, american express, microsoft, all dow components, by the way. meanwhile, federal reserve chairman ben bernanke spooked the marks with the semiannual testimony before the senate banking committee. bernanke said we are seeing, quote, an unusually uncertain economy. he did say though, that he did expect a moderate economy. about bernanke said the federal reserve was prepared to take steps, any steps needed, if the economy did take another leg down. he did not say what those steps would be. chairman bernanke may be concerned about an unusually uncertain economic outlook, but nigh next guest says he feels like the last optimist standing. he isser is me segal, professor of finance at the wharton school and uthor of "stocks for the long run." always great to have you on the program. welcome back. >> thank you very much, maria. >> so the markets have been so mixed these last few weeks, but you think it's a great time for investors. what makes youo so optimistic?

>> they're allowed shrm uncertainties, but i look at valuation. i look at earnings and i look at the prices of stocks and right now, first oall, the second-quarter earnings are coming in really extraordinarily good. full-year earnings are looked at so that the valuation othe market, the p-e ratio, the price-to-earnings ratio which is the major measure that we finance economists use in order to judge the valuation of the market is now standing around 13 times earnings. the average over the long run is just about 15 and the average is higher when interest rates are as low as they are today. so right now i think it could be like once in a generation opportunity for long-term investors to buy stocks. >> long-term investors to buy stocks, but at the same time we had these headwinds in terms o the economy, right? i mean, yes, the point that you

make as far as corporate earn suggests obviously the right one and it's coming through with the numbers, but when you look at housing or unemployment, do these issues for the broad economic landscape bother you? >> oh, yes, certainly, we're in a soft spot right now. we -- we ended the recession last summer. we got a couple of quarters of very good growth and now we're getting quarters of much more moderate growth. this is not that unusual in an economic recovery, that there is a slowdown in the middle of it. yeah, there are headwinds, yes, we are in a slowdown and there are always headwinds. there are always headlines we can point to to give people an excuse not to buy. the more of those there are, history shows the better it is for investors to put their money in the stock market. >> all right. so how do we want to invest in that environment? talk to investors out there about putting together a sound financial plan, investing in the stock market for the long term. what do you advise some. >> right now, i think the

markets not only in the u.s., but globally are very attractive right now, and what i see particularly attractive are dividend-paying stocks. with interest rates so low, you can pick up dividend-paying stocks or portfolios of dividend paying stocks toward those stocks which are yielding three 3% to 4% that is longer than long-term treasury bonds. >> jeremy, ask you about the reform. the president signed the financial regulatory reform law this week. what do you think this regulation means for the financial stability and economic growth. do you think the financial services industry will look very different say two years out? >> probably not. a lot othe worst measures were toned down. the 50 to $75 million bank bailout fund which by the way, now looks like the government for fannie and freddie will be

making money on its investments in the bank and it seems to be that that was not a necessary feature. a lot of those were eliminated at the end. it depends on the regulators that they put in. there's a lot of flexibility. there's a lot of scope in this bill for the regulators to act. you have good regulators in there, and there are some very positive features. if you get them in there, they can do a lot of harm so we'll have to see who is actually going to go in there and how they're going to regulate it. i actually think the industry can live with this and for the ordinary investors i really don't think this is going to be a pathbreaking or momentous change in the investing climate. >> jeremy, what changes your mind on this? what are red flags you need to focus on? are there things you worry about that could turn bearish? >> i am concerned about -- we must clarify the tax outlook.

we don't know the tax rates for next year. we don't know them on ordinary income and we don't know them on differ denneds and we don't know them on capital gains and the estate tax is tremendously uncertain. if the congress does nothing and the president does nothing we'll have a tremendous increase in taxes. i think it is very important that we delay, at least delay, if not cancel these onerous tax increases, and i urge the administration and congress to act on that as soon as possible. i think that's a major cloud that is now over the investment horizon. >> all right. we will leave it there. jeremy, great to have you on the program and we'll be watching the taxation story and we'll see you soon. >> thank you very much, maria. >> jeremy segal. in the interest of full disclosure, professor segal is a senior adviser to the company to which my husband is a ceo. coming up on the wall street journal report, my conversation with one othe president's top economic advisers, larry

summers, will join me. we'll talk financial reform, what it means to you and why fannie and freddie are not in the reform bill. a growing sector othe food industry that brings the restaurant right to you. high-end food trucks are rolling along. as we take a break, take a look at how the stock market ended the week.

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rain showerence summers is a key member othe obama administration's economic team and one othe important voices that the president listens when it comes to the economy and shape policy. i talked to him about chairman bernanke and the newly passed financial reform bill. >> the moat important wall street reform legislation in 75 years. it will substantially reduce the probability of another financial

crisis. it will eliminate the prospect of large-scale federal bailouts of the kind we were forced into a year ago, and it will change the financial life of every american household by forcing the right kinds of protections and restrictions on egregious credit card practices, on mortgages that have exploding and unfair terms. on payday loans and other means in which consumers have been taken advantage of. you know, if you look at the financial history of this country, we had a catastrophe in the 1930s. we've put in place a system of regulation that really set that right. we went a long period with almost no major financial incident, but in the last 20 years we've seen one almost every three years. >> let me ask you, larry, because a theme keeps coming up

with my conversations with business people and that is that the bill, the law has left a lot to interpretation. in other words, when you're actually looking at a situation the regulators can interpret the law in different ways. do you worry that that may keep some othe uncertainty out there in terms of companies putting heads on the payroll and actually creating jobs which i know is your number one item on the agenda? >> well, you're right about the importance of -- of jobs and you're right about the importance of implementing this bill in a strong, clear, vigorous way, maria. you know, my friends in the business community sometimes try to have it both ways. they're for standards and for clear standards and they don't like the standard asks they're for regulatory discretion in a lot of areas, the volcker rule,

for example, it was business that was working very hard to get regulatory discretion and to avoid detailed statutory mandates. so i think it's a little rich for them to complain that there's now a certain amount regulatory discretion. look, there's things congress should not do. congress should is not know the details of the circumstances of an individual financial institution. these are enormously -- >> it should be open to interpretation -- >> so there needs to be discretion. discretion is circumscribed by a framework. a framework that rules out the prospects of of taxpayer bailout. a framework that provides for resolution authority. a framework that insists that stufthat can be put on clearing houses and exchanges be put on clearing houses and exchanges. a framework that insists that

every systemic institution, if you're big enough to bring down the system you're big enough that somebody regulate you comprehensively. those are the important elements of the framework, and i think they put us in a very, very different position going forward. >> larry, is it a blow -- >> it's about uncertainty. >> is it a blow to you that fannie and freddie were not addressed? >> no. this is a process that has to play out over time, at a time when there's still strains to put it mildly in the housing market and at a time when more than 90% of mortgage credit is coming from the federal government. that's not a time for a precipitous change in the arrangements with respect to the gses, but that time will come. the president is committed to propose a plan next spring to the congress. >> larry, very quickly here, final question.

ben bernanke on the hill today saying that the economy is slow and that the outlook remains unusually uncertain. his quote, not mine. how is this economy going to get revved up again? how do you create jobs in thissen viern fundament do you agree with the chairman's statement? >> i don't agree with it -- >> no. you quoted him very selectively emphasizing the most negative phrases that were contained -- >> well, the market traded down when he spoke, so i'm just following what the market reacted to. >> in his outlook, look, we're determined and the president said it many times to do what's necessary for growth. the fact that it happened too late and it happened too slowly, but the fact that congress is at last extending unemployment insurance looks like it's on the verge of providing significant new credit and tax incentives for small business. he's starting to move on a broader range of programs to

support energy. remembering the needs of state and local governments and all of this will contribute to supporting and extending the momentum of growth. >> my thanks to lawrence summers. up next on "the wall street journal report. sweets on the street, bring a high sense ticker symbolity to fast food. we'll talk to one that's literally on the move. >> become a fan on facebook. you'll findous facebook at th

welcome back to wall street where street meat is going knorr may in cities across the country. new food businesses are bringing diverse cuisine like barbecue, waffles and whoopie pies to meals on wheels. we are here with the street sweets new york trunk and owners grant duhamel and samira buf on. also with us is barbara fairchild, editor in chieof "bon appetit." thank you all for being here. this is so gate. barbara, let me kick this up with you. tell us how these trucks work. these food trucks. are they run by chefs and trained restauranteurs? >> it's been a way for a younger chef who may want be employed in restaurants yet to start their own businesses if they want to and it's been a way for

established chefs or change o career people to find new ways to take their message to the public. >> which is exactly what you guys did, right? >> you left the corporate world and started a mobile bakery with $150,000 oyour own money. food trucks are a hot story. how's business going for you? >> business isn't bad. the street business can be fickle with different changes and climates and our event business is booming and we're doing more and more special events and we love it. >> how did you get started? you decided you're done with the corporate world and you want to do what you love. >> my industry is printing and advertising was going through some horrific changes. i wanted to make a change and control my own destiny. we wanted to always have our own business. we didn't have millions upon millions of dollars to start a pastisry. we did our ri search and here we are. >> samira, what i love about it is you are able to change locations and you can change products based on the customer feedback.

how does that work? >> the customers talk back us to or give us feedback via twitter as well as facebook. so it's really great if they want a product, we try to really come up with some ideas and produce it for them. >> and the food culture is really changing and sort of getting more int aeractive becae of social media. the food truck trend is what put twitter and facebook on the map as far as people are concerned. the trend started in l.a. with the coach truck and these fellows were so smart to have their regular means of public relations and communication. they went straight to twitter and facebook. the only way you can find where a lot of these trucks are is to follow them on twitter or facebook. it's interactive, in a way. >> and you made me a coffee. thank you for that. you've got a lot of following. >> we have 5,000 people on twitter. another 500 people on facebook, and it's really essential to us. if we have to move, for example, if we're supposed to be in a

location and the police asked us to move because of an emergency, we'll twitter or tweet and say we'll be around the corner. and we also try to have fun with it and we see people coming out of the office buildings because we tweeted about it. >> it does help your bottom line then. >> no question about it. >> you've got a direct line to your customer, telling them where you are. >> exactly. >> and a great aroma for the street. >> this is in urban areas, we're obviously in new york as grant was saying and you have the direct relationship. where else do you think? >> it's working very well in l.a., obviously. boston and seattle have been very embracing and welcoming o the trends and chicago's taking a look at it because they have some health laws that are sort of at odds with what the street carts are all about. portland, oregon which had a long, long history ostreet carts and now with the trucks isn't exactly as big as new york is, but they have a really big and ready and willing audience

to partake of what all ous are doing and it's not just limited to tweets. that's what's so interesting about it. there are trucks where there's lots of cooking going on. we have a fried chicken truck in l.a. and a fishy truck in l.a. it's all across the board. >> love that. >> how do you want to grow this business? do you have plans to apply for a loan to get bigger or perhaps build a brick and mortar restaurant? what's the next step? >> a bit oall that. no question we would like to have a brick and mortar restaurant. now i'm starting to see trends in where carts may be more at van takous than trucks. trucks have their own bagable, so to speak and carts strategically placed would be the next step. >> such an interesting story grant, barbara, samir, great to have you on the program. onward and upward. for a video look, check out our website wsjr.cnbc.com.

when we come back, up next on "the wall street journal report," a look at the news this upcoming week that will have an impact on your bonnie and the billions buried below wall street. this neighborhood's hard assets under ground. [ female announcer ] jobs leaving.

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rolling seasons rolls on and we'll hear from embattled bp, as well as dupont, exxon mobil, chevron and merck among others. monday, the latest sales of new homes will be reported and more housing news as well on tuesday. the shiller home price index will be released for the month of may. then on wednesday, june's total of durable goods orders will be released and these are consumer products meant to last. on thursday we get the federal reserve's beige book, a monthly survey oactivity across regional economies and on friday, we get the second quarter gross domestic product reading. the gdp is the broadest measure of the health othe u.s. economy and often is a market mover. finally to date, lower manhattan may be the safest place to hide billions of bullion, right around the corner from where we are, the world's largest stockpile of gold is safeguarded and is 80 feet underground and holds more than 500,000 gold

bars. the central banks and international organizations. it charges $1.75 fee per bar. when gold enters or is moved within the vault. with gold prices topping $1100 an ounce, that's somewhat of a bargain. that will do it for us for today. thanks so much for joining us today. next week my guest national education association president dennis van willkof. keep it right here where wall street meets main street. have a great week, everybody. i'll see you again next weekend.

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