ring out the old, bring in the new. the markets wrap up their best first quarter in a dozen years. what is next and where do we go from here. what is brewing at starbucks? i'll talk to howard schultz about the journey he and his company have taken, where it's headed and who needs a trenta anyway. and a movie muggy well a long and legendary career. now the tables are turned on jerry weintraub. my conversation with a true hollywood insider. "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 is a look at what is making news as we head into a new week on wall street. encouraging news about jobs in america. the unemployment rate fell to a two-year low in the month of march as companies created jobs at the fastest two-month pace since the recession began. the labor department says the economy created 216,000 new jobs, slightly better than analysts' expectations. the unemployment rate dropped to 8.8%. the markets wrapped up a strong quarter, the dow having the best first quarter showing since 1999, the s&p since 1998. the dow hitting a six-week high on wednesday and highs for the year on friday. there is now another bid for the stock exchange. ice making a counteroffer to by it at a price 19% higher than the deutsche borse's offer.

the case and schiller s&p index showing house prices dropping for a seven months in a row. warren buffett may have to start looking for a successor and the man thought to be the replacement of berkshire hathaway has suddenly resigned. david sokol stepped down saying he wants to start his own company patterned after berkshire. but his resignation has raised questions about a stake sokol has in a company berkshire is acquiring. sokol had bought thousands of shares two months before berkshire announced that it was acquiring that country. shares have risen about 27% since the deal was announced. and sokol had pitched the acquisition to berkshire's board. in a statement, buffett said neither dave nor i feel his lubrizal purchases are in any way unlawful. he told me they were not a factor in his decision to resign. a strong first quarter, encouraging news on jobs. the markets shrugging off higher

oil and commodity prices. where do we go from here and what is next? joining me now to talk about is nariman behravesh. he is chief economist at ihs. great to have you on the program. welcome back. >> thank you, maria. >> let's talk about the jobs numbers to start off. the economy creating 216,000 jobs in the last month. the unemployment rate moving lower to 8.8%. that's a two-year low. encouraging news. it is enough? >> indeed. and in fact as you well know, the private sector created even more jobs, 230. but it was the government that was sort of pulling things down a little bit. this is really good news. and what we have seen over the last two quarters is actually an acceleration of jobs creation. so we're on a very good momentum here in terms of the economy, and in particular in terms of the jobs market. the march number was a very good one. >> going forward, do you worry that there are headwinds that could reverse this positive trend, such as the weak housing market and all of those foreclosures in the pipeline, and of course the federal reserve getting out of the way

and ending its stimulus that has been in place for some time. >> indeed. as you say, there are a number of headwinds. housing is one of them. state and local government is another one. they're cutting back quite a bit. we don't think either of these is going to derail the recovery. it might cut a little bit of growth. same thing with japan. as horrific as that event is, in terms of the u.s., fairly small potatoes. however, the bigger risk, and still only a risk right now is oil price. oil prices go up much above where they are right now, that could really start to affect the recovery. so far so good, keep an eye on the oil prices. >> is there a magic number that you think actually does at people's disposable income? we all talk about oil being $107 a barrel. what number would actually be high enough to start getting people worried and perhaps zap the disposable income that drives the economy? >> well, the real psychological

barrier is not so much the price per barrel, but it's the price for a gallon of gasoline. and here we think somewhere around $4 a gallon for regular gas is a psychological barrier. once people see that, we suspect there will be some belt-tightening. nothing terrible, but people will adjust. we all have to fill our gas tanks each week, or each den days or whatever. and we see that number, see that price as one of the few prices we see a lot of. so people do tend to react once you get above, say, something like $4. >> let me get your take on the quarter. very strong first quarter for the stock market. the dow and the s&p 500 having their best performance in 12 years? what does that tell us about the economy, and what are you expecting for the second quarter as we wrapped up the first quarter last week? >> well, this is a business-led recovery, and in particular, business earnings, profits are very, very strong. so the stock market from our perspective is reacting rationally as it were to the fact that companies are doing very well.

so from that perspective, i expect that to continue into the second quarter. good profits growth, maybe not as great as we've had in the last year, but still quite good. so i would expect the market to continue to do fairly well. maybe not as well as it's done over the past year, but still pretty decent performance. >> even with prices moving higher in the commodity space, can the economy live with oil at $105 and copper where it is, silver at a 31-year high, gold at elevated prices, copper, iron ore, across the board moves in commodities increases. >> the one word answer is yes, we can live with commodity prices at these levels. if they go much above here, i start to worry a little bit. but commodities actually play a fairly small role in the u.s. economy. i mean just to kind of give you an example, household budgets. only about 15% goes to energy and food. the remaining 85% goes to all other kinds of things.

rents, health care, so on. so it's that 15% that is being affected right now. the rest of it really isn't. >> right. so the grim news on the economy still the housing market. as we mentioned a moment ago, do you expect a double-dip in housing, and if we were to see a double-dip in housing, does that impact the broad economic environment? >> i think we could well be on our way to a double dip in housing. house is still only about 6 percent of gdp. so it's fairly tiny. so from that perspective, we could even see a double dip in housing and still see the recovery continue. >> and how did the cutbacks play into that? a lot of calls in washington to cut the deficit that means cutting back on spending, cutting back on programs. does that hurt any economic recovery that is just gaining traction? >> it all depends on the timing. if it's done this year, next year, and they're big cuts, yes, it will affect the recovery. if it's spread out and back loaded to some extent, it will

not. so a lot is going to depend on the exact timing. >> nariman, great to have you on the program. we appreciate your insight ongs this. we'll see you soon. nariman behravesh joining us. next up, starbucks howard schultz talks to me about returning to a job he left behind, and his plans for moving onward. >> when you're an entrepreneur and you create something, second to family there is nothing more important. and later on, film storyteller and "ocen" producer, jerry weintraub. how this hollywood heavyweight did it his way.

entrepreneur howard schultz took starbucks from independent coffee bean retailer to iconic multinational brand. then he watched the company he built lose its way. since returning to the ceo job in 2008, schultz reinvented starbucks again, cutting $700 million in operating experience closing stores and revamping the

menu. he describes the task in his new book "onward: how starbucks fought for its life without losing its soul." as they celebrate their 40th anniversary, starbucks ceo told me more. >> for me personally, this is about a love story. when you're an entrepreneur and you create something, second to family, there is nothing more important. and i was witnessing the fracturing of the values of the company. and i just felt i had to come back. and we did some things that inquiry very unusual. you probably -- i don't know if you remember, we closed every store for retraining. do you remember that? >> yes, that's right. >> we had to publicly admit to our people and to our customers that we were not as good as we once were, and we had to get back. every public company has multiple constituencies. the most one, though is our people and our customers. but there is no doubt that there is a cloud hovering over every public company, and it is the expectations of the street. and i think as the company grew

so fast, we became complicit with our tv and the stock price. and the decision were made not for the stock price, but to feed the growth. we had to stop the growth. we had to close stores, which was very painful, and we had to focus on our core. >> so out of all of the steps you took to turn things around, some bolder than others, what was the most important? >> i strongly believed, and this is proven out with our story, that the consumer today wants to support a company, a product, a service, a network, whatever it might be whose values are compatible with their own. and given the choice, if there is transparency about what those values are, they're going to support a company that they trust. now we're not perfect, but every step of the way, we gave our customers and our people a reason to believe in the equity of the starbucks brand. >> that is very powerful. because once you have the loyalty and trust of the customer, then you have to

continue to earn it. >> and this is happening all over the world. starbucks is in over 50 countries. so the new kind of growth for the company will be highly disciplined, highly thoughtful. and there also is a new vehicle for starbucks which is what we're going to do in the grocery aisle in america. we have via in over 30,000 points of distribution. and via is a great test case. we introduced via in our stores. and six months after that drafted off the success into grocery. and starbuckss that potential to become the first consumer brand to have a national footprint of retail stores and ubiquitous distribution in grocery. no consumer brand has been able to do both. and that is going to happen. >> how are you dealing with increased commodities on all levels? you're passing it on to the consumer? >> maria, i've been in this business for 30 years. i can tell you unequivocally with every coffee farmer and resource that we talk to in which we have decades of

relationships, we cannot identify a supply problem in the world where we're buying coffee. so one question is why are coffee prices going up. and in addition to that, why is every commodity price going up at the same time. why is cotton, corn, wheat, why? and i think what is going on is financial engineering. the financial speculators have come into the commodity markets and drove these prices up to historic levels, and result of that the consumer is suffering. >> the company recently introduced a new large size called the trenta. >> oh, god. why do you have to bring that up! >> come on, why the trenta? a 31-ounce size beverage. 16 milliliters large they're than the human stomach capacity. come on, howard. >> in the sunbelt, it was said to us by our customers that they drink a tremendous amount of iced tea and iced coffee in the

sunbelt. we were talking to our customers. more often than not that. >> drink their large size and drink throughout the day and refill it. so as a test, we said let's see if we can introduce a large size in the sunbelt. once we did, it was a level of velocity that we did not expect. so being the smart company that we are, we introduced a 31 ounce only for iced coffee and iced tea only in the markets that it is in. it is far exceeding expectations. and as you know, you want to be doing everything you can to satisfy the customer. >> how many cups of coffee do you have a day? >> four or five. usually. >> my thanks to starbucks ceo howard schultz. up next on "the wall street journal report," hollywood tales from a legendary producer and movie mogul, jerry weintraub. his lessons on life, business, and talking back to frank sinatra. as we take a break, take a look at how the stock market ended the week.

jerry weintraub is -- >> jerry weintraub is -- >> he never gets down and quits. he is that guy. he is the cliched guy that fights harder. >> it is a rare bird. >> jerry weintraub is here with us. he is the producer of the

"ocean's eleven" trilogy, the man behind the concert tours of both elvis and frank sinatra, a diverse and long show business resume. jerry, great to see you again. >> great to see you. >> really good to have you back here. >> thank you. >> a new documentary, we just saw a couple of clip there's about your life and your career about to air on hbo. how did that come about? >> graydon carter, the editor of "vanity fair" came to me and said he would like to make a documentary about my life after my book was so successful. and my book was coming out in paper back "i'll stop talking when i'm dead." a little plug there. i said graydon, i can't produce a documentary about myself. it means i have to turn it over. and i can't creatively get involved with a documentary about myself. because that's not right. so that means i am out of the loop except i'm an actor. all of the sudden in front of

the camera, and an actor. and i don't know if i want to do that. >> so you didn't have anything to do with the creative then. >> zero. >> what was it like? what was it like? was it tough describing your life and your career on the other side of the camera? >> yeah, no, that part wasn't hard. what was hard for me was not being -- having a final cut, not being able to fix it, take out what i want to take out, or put in what i wanted to put in. but they got a wonderful team together. graydon produced it. they have soderbergh, steven soderbergh as an executive producer, doug mcgraff who is an academy award guy as a director. >> top guy. >> top people. and hbo, which is a fantastic place. i mean hbo is great. fantastic. so i turned it over. and i said okay, let me go with this. i'll go with it and give it a shot. i did. and there was no script. and we were telling all these --

all about my life, you know. >> your stories. >> yes. the only thing i did is call my friends and ask them to come and do it, and they all came. and then i stepped aside and i came to work every day and did what they told, sit, sit, sit over there. i said i don't want to sit over there. no. sit over there. >> let me get your take about the business end of it. the financing of movies. so the financing has changed. >> yes. >> you worked on three recent "ocean's eleven" movies and the actors in that case regularly command what, $20 million a movie? >> yeah, a lot of those. >> $20 million a movie, individually. >> right. >> how do you afford those salaries now? and tell me how the financing of the movie business has changed. >> well, you can't afford those salaries now or then. you couldn't afford those salaries. i got them all together in a room, and i said this is how much money i have. and this is how many points i

have on the back end. it was all about the back end. and everybody, we cut the money up. >> back end meaning they participate in what the movie makes. >> gross proceeds. first dollar gross, which is a great way to make money. >> this year's oscar winner for best picture, "the king's speech." >> i loved it. >> tell me about that. it had a budget in the neighborhood of $15 million. >> yeah. >> but now they're talking about grossing $300 million. >> who is talking about it? harvey weinstein? >> he came on the show a couple of weeks ago. >> he is great. >> what is your business model for a successful film? more attention on the effects? more attention on the cast? >> personally, i work on film with character and story. i'm not into special effects movies. i don't really, because i don't have control over special effects. it's really a young person's business, that business, the special effects business. >> with 3-d? >> yes. i'm into "the king's speech."

>> the characters. >> yeah. the characters and the story. >> a lot of attention in the film is paid to your personal life. >> yes. >> was that tough? it included your 50-year marriage to your wife, your 20-year relationship with your girlfriend. was it tough to talk than and be so outward with the press as well? >> no. i talked about it because it's -- i have these two great women in my life. and they both love me. and they both gave themselves to me, and they both are friends. and co-exist. they cook in the same kitchen. we stay at jane's guest house. she stays at our guest house. the kids are all come for holidays. we're all good together. >> you made it work? >> they made it work. >> and in terms of the digital revolution, has that impacted the way you approach your business today? >> yeah. i don't think it's a good impact because we -- the fact of the matter is that we can do things too quickly now. and we don't have time to think.

and i think the work suffers because of it. we used to do a film, and cut it, edit it, put it together, send it out, bring it back, send the film out, read the negative. the music, we has more time with the music. everything is in a hurry now because the budgets are too big. and everybody -- your cost of money is too much. and everybody is in a hurry to get the movie. >> and certainly people's habits have changed in terms of when they see films, when they go out. jerry, it's great to have you on the program. congratulation. >> thank you. >> what a wonderful story, and so many stories. "his way" debuts on hbo monday, april 4th. we'll take a look at the news this upcoming week that will have an impact on your and then an unusual sight at the stock exchange where they rolled out the red carpet for a different kind of guest.

for more on our show and our guests, check out the website, wsjr.cnbc.com. you can follow me on twitter. find me at maria bartiromo. now the stories in the week ahead that may move the markets and impact your money this week. on tuesday the federal reserve's open market committee releases the minutes from its march meeting. the fed's next meeting is later this month. and the institute for supply management services index is also out on tuesday as well. friday, april 8th is the federal budget deadline, and total wholesale inventories will be reported by the department of commerce that day as well.

finally today. >> it was a true case of animal spirits on the stock exchange this week. there were no bears and bulls inside, but there was a horse. budweiser brought one of its clydesdales on to the trading floor as inbev partnered with major league baseball to promote baseball's opening day and ring the opening bell. the horse didn't make it up the steep stairs to ring the bell, but he didn't seem to mind that will do it for us today. thank you so much for joining us. my guest next week chicago federal reserve with the charles evans. each week keep it right here where wall street meets main street. have a great week, everybody. i'll see you next weekend.