hi, everybody. welcome to "the wall street journal report." i'm maria bartomo. today coming to you from sao paulo, brazil, a cy of 20 million people. coming up in the program, what behind the boom in this natural resosource-rich nation? i'll be talking with several leaders here in brazil. also ahead, the federal reserve, the markets a and a lo more. the "wall street j journal repo" begins right n. >> this is america's number one financial news program, "the wall street journal report." now maria bartiromo. >> i'll be back with more from brazil coming up. but first, let's get the headlines of the week with tyler mathisen. over to you, ty. >> thank you so much, maria. here is a look at what is making news as we head into a neww wee on wall street. federal reserve chair ben bernanke made history this week but not a lot of news. for the first time, a sititting

chairman met the media and held a formal n news conference following a fed meeting. mr. bernanke said the fed is watching inflation very closely. >> while it is very, very important for us to try to help the economy create jobs and to supporort the recovery, i think evy central banker understands that keeping inflation low and stable is absolutely essential. >> during the meeting, the fed kept interest rates at near zero percent, lowered its growth projections and improved its outlook for employment. the dow osed up almost 100 points following the conference, ending at a multi-year high. nasdaq reached a ten-year high on wednesday as well. both were up again on thursday. we got our first look at the strength and size of the overall economy for the first quarter of the year, and growth slowed sharplply. the gross domestic product was up by 1.8% on an annualized basis, slightly below analysts' expectations. many economists hope it's just a temporary setback, and that

growth will resume close to a 3% pace for the rest of the year. we are in the thick of earnings season, and ford, 3m, ups, boeing, exxon, microsoft, all beat analysts' forecasts. but it wasn't a clean swooeb swe sweep. coke and procter & gamble missssed. brazil isbooming. some 30 million people have been lifted from poverty to this rising middle class to the vast natural resource, doing massive trade deals with china, and that is creating a real boom on the ground throughout brazil. so what is brazil doing right, and it is s sustainable going forward? should you be investing your money in brazil? joining me washington is richard haass, president of the council on foreign relation. richard, always wonderful to have you on the program. >> thanks a lot, maria. >> so let's talk about brazil. i know you have been here many times and have been studying the econy for so long. what is driving this boom

happening, and so much money moving into brazil? >> well, what really goes back out 20 years ago during the cardoso era. you put io place a modern regulatory regime, more lenient laws to attract investment and so forth. and then youegan at the same time to begin to address the poverty, to look at some of the educational issues and so forth. so if you will, you had both the top down and a ground-up approach. and together it turned around the brazilian economy. >> you know, i was talking with the agricultural minister, and he tells me, he is just back from china, he did two major deals to open up more markets wherbrazil will sell china more meat, more chicken, more corn because of the vast land and so many commodities here. what about the uted states? why does bral matter to the u.s., richard? >> brazil matters to the united states in part because of its sheer size. it's two-thirds the population

of the united states, 200 million pele. it has more potential for growth really than any other country in south america. but beyond the economics, you know, say the fact that the united states now exports $50 billion worth of goods and services to brazil every year, beyond that, brazil, maria, is going to be one of the half dozen countries that is most going to shape the 21st century. everyone talks about china. but very quickly after you mention china or maybe japan and europe, then you're right up there th brazil and ina. essentially the rising, emerging countries that are going to become significant in the world ergy scheme and questions of climate change and questions of any sort oflobal trading arrangement, currency arrangements and diplomacy, you will not be able to talk about the 21st century without making sure that t brazil has a seat a the front table. >> will brazil at some point be a competitor to the united states? should we be concerned? >> i don'think so. it's a growing market for us.

it's good for americans to invest. it will become an ncreasing source of engy and oil to the united states. it willl be a place, where agai, we'll be able to partner on things like climate change, what brazil does with its enormous forest will have consequences far beyond its borders. we should welcome the fact that countries like brazil are essentially getting ready to take their place on the world stage. well need other countries to succeed. we need markets. we need partners. so sure, every now and then we're going to find ourselves competing or disagreeing. that's inevitable. but by and large, brazil's success is exactly the sort off thining we should wish for, whether fromom an economic vante point or a foreign p policy vantage point. >> someone said to me, look, it feels like the united states in the 1950s from an econonomic standpoint because people are happy, they're optimistic, they have jobs. and as a result, they're spending m money. the telecom sector for example rising, and then the catalyst of the olympics in the next couple

of years that is going to drive a major infrastructure build here. >> you're exactly right. you now have a gdp per capita something like 10, 11, 12,000. it's growing. you talked before about 30 million people being lifted out of poverty. that really puts brazil righ after china and ina as one of the great poverty alleviation experiments in modern times. it's booming. it's not just natural resource. though those are considerable. it is also the basics of a manufacturing economy. you've got impressive aircraft industry and so forth. so brazil is, again, it's emerging. it used to be a joke that brazil had a great future and always would. that joke is over. the future is now with brazil. the fact that president obama went there the other week in the midst of all the middle eastt problems i thought sent an importrtant memessage, that he wasn't going to allow the urgent problems of the day crowd out the long-term important job of building a stronger relationship with brazil. >> so what about the investment ane? we know that an enormous amount

of money has been moving into brazil. so how important is brbrazil to american investors? and how can n they c cash in ons boom? >> well, it's more and more important in terms of a place to invest in terms of like machine parts, aircraft. you got growing industrial base there. soit's very exciting for american invests. it's ao a place where i'mure you've run into them in the hotels. the private equity crowd is ineasingly finding all sorts of opportunities i in brazil. you've got a vibrant stock market that peoeople can have confidence in. so whether you look at individual companies or country funds, or brazil as part off global fund, i would think incrsingly it makes sense as anpart of a round portfolio. >> we'll leave there it. always great to have you on the program. great insits as aays. we'll see you soon. >> thanks. >> richard haass joining us. coming up ne on "ththe wall street journal report," clear beer talk with the brazilian

businessman heing up the world's largest brewer, carlos brito coming up. and beer to big screen tvs and everything in between, brazill s buyi. i'll talk to one of brazil's most successful marketeters abo cornering the latin american market. as we take a break, we'll take a look at how the stock market ended the week.

welcome back from rio de janeiro, brazil this week on "the wall street journal report." this country of 200 million people boasts a vibrant and growing consumer class, and it continues to see fortunes rise. with an expected increase in per capita income of 6% a year, i spoke with o of brazil's business success stories, and that is the ceo of anheer-busch inbev, rioative carlos brito. it's the world's leading brewer with some 200 brands of beer around the world. i asked this new king of beer for the real story onhe boom happening in brazil. >> the whole thing started in 1994. when the government back then implemend what was called the real plan. it was a plan that aimed at tami inflatio andnd they were successful. so inflation prior to 1994 would be sometimes 40% aonth inflation. and after the plan, was like 10% a year. and ththe last seven years i wod

say between 4 and 5% a year. i think the second thing is the whole commodity boom that happened around the world benefitted brazil as an exportrterer big-time. so sce the beginning the plan, 50 million jobs or the last yr alon2.5 million jobs alone in a population of 200 millllion people. and that -- at created a lot of what we c call a social inusion. so 50 million jobs, 30 million people getting out of the poverty line, people that didn't belong in the coumer market all of the sudden entered this market with ptions of power. the last part i is the credit. with the wholeact of 16 years of stable rules, a stable economy, and governments that have built on the pvious government's success, brazil has had an all-time lowering in terms of unemployment. today we feel because we operate there it's a very hot job market. 10 people findjobs.

>> and in tms of the sustainability of what is happening in brazil, do you think that it is sustainable? how does this ep going? >> the whole is pro brazil in sense of commodities. so brazil is less dependenton exports than companies for example like china, germany. it's very important for the overall pie. in those days one of the big problems brazil ed to have was with hard currencies. with hard currency because of all the import, especially oil that brazil had to do, every month, every year. so that was in the '80s. after that, the governrnment pua target to be self-sufficient in x years. and they achieved that. and lately, they discored even new reserves that will bring in re investments to brazil. so brazilra will come frfrom a import of oil to a net exporter of oil in a few years. and that will add to the whole thing. again, i think brazil will be

more and more known not for only samba and soccer, but also for hard-working peoplple, entrepreneurial people, and a country that offers lots of opportunity country for foreign investments do. >> you u worry that things are heating up too much and they're not worrying abobout inflation? do you worry about new government policiein place to rein in real? >> i think it's a very pragmatic government. i think from what i read what they have in mind is they want to keep inftion within the range that they consider acceptable defined by the central bank and the cap of 6 1/2% a year. >> you vu been very direct with shareholders, with the market in terms of your plans, in terms of overseeing ab inbev. let me ask you about that. where are you in that plan? you said the priority was to pay th down after the anheuser-busch deal, and you said a plan was to take advantage of various economies around the world where there is

growth. where are you in that strategy right now? >> we said the leveraging was the first thing we had in mind two years ago because of all the financial crisis and the debt we took to be able t afford the deal. we're also developing brands. budweiser is global brands but also the local brands are very important. so we'll continue to develop our busineness in china, very promising. so very happy with the development that we have in china. >> and it is fair to say that the emerging markets really represent the biggest opportunity, or it is th u.s. and brazil? >> u.s. and brazil are the tw-- the numr one and number two profit pools in the beer industry in the world. and we have leading positions in these two markets. for different reasons, they're both very interesting. in the u.s., because you want to grade consumers, you're not going to have we think the nds of growth you s in brazil in terms of industry, because the dierenmarket at a differenent stage, a different population

pyramid, different consumption habits, but the here the upzbrad to getet consumers to pay more r the beer, by bringing them brands that they feel good about paying premium for. now of course we saw beer consumption go down in the u.s. right after the recession. how are things today would you say? >> industry in 2010 and '09 were negative, slightly negative, 1% negative, 2% negative. we think that has a lot t to do- not that we think. the models show that that hahas lot to do with unemployment and consumer confidence. so that has to change before the industry changes. so as unemployment come downs and consumers get more confident about the fact that they will have a job today and ey will continue to have a job tomorrow, i think the industry will come back. >> my thanks to carlos brito for joining us. up next on the "wall street journal report,"," they export soccer and samba, but what does brazil want t to buy? ththe head of the world's large advertising agency will be here to lk about selling to shoppers in this booming part of th

welco back. one of the most successful advertisers in the world believes we are embarking on a latitin american decade. and he is looking for ways to reach those cusustomers. sir martin sorrell does business in more than 100 countries as ceo of the wpp group, he talked to me about the opportunities and challenges in latin america. he gave up his view ofof the ad game, business and commercial appeal in brazil. >> it's a younpopulation. its age base is very different to what we see. china everybody focuses on. but actually bause of the one-baby policy which is under review in some ways, that's created an older population. india is a younger population. russia, the ote r brick is an agingg population, 145 million people with -- although people

are tending live a little longer in russia, there is a real health issue there. so a young population. a burgeoning what they call c class here, which is a lower middle income class. so for example t the retailers like casas bahia or magazin luisa whichre low and middle e class retailers have blossomed. ponte frio a few months ago. you're seeing the growth of retail and consumer products in a ler, lower middle class that is grong extremely rapidly. the other thing is when president lula took power, we saw a basic shift in trade. the united states used to account for about a third of brazilian trade, and now it accots for about half that. and china is brazil's biggest trading partner. so you've seen a big shift in patent. tremendous entrepreneurial vigor. trtremendous passion. it extends beyond the soccer field. >> yeah. >>nd o view is thatat this i is the decade of latin americ

our view isis the two big event in 2014, the world cup which brazil must win and 2016, the olympics which i think will be another stunning event will repotion brazil and the whole latin american continent. and you mustn't forget the other players as well. mexico is our second biggest market. the third biggest market is argentina despite their issues and then cololombia and chile. pretty much across the board we're seeing great growth, vigorous growth. and wpp's future is no longer confined to the u.s. and western europe. it's very much in thesese brick >> a good point. what do you tnk the big challenge is here in brazil? you talked about the inequality which is obviously an issue. but dilma, the president talalk about inflation which is another issue. how concerned are you about inflation? >> i think we're all worried there is sovereign debt issues in europe. there is the deficit in amera which the administration seems steadfast inn not dealing with until after t the election in 23 when the rubber wiwill hit the

road and you can't kick the can down the road. and obviously north africa and the middle east and the japanese things.. but in addition to, that we've en the rise in commodity ices. interestingly, from an advertising point of view, i think we're starting to see clients reduce pricing discounts and invest the same or more in advertisin so a p might look as though it's down, but it's the p that is down, the advertising is stable. that's interesting. the other thing in the established economy i think risk averse managements are more interested in maintaining brand and maintaining share and investing in brand equity rather than in investing capacity lehman is seared into the conscious and they don't want to expand the capacity at a time when they're uncertain in the west. here it's fine because you've got some gwth to absorb the capacity.

buin the western continental europe, uk, u.s., they're conservati, and they're investing in the brand. >> and they're investing by the way here in brazil. i just wonder how the next five years look. the head of the world cup and the olympics, lots of catalysts to come. >> there are two things. the multinationals coming. in and don't't forget the natials and brower, companies that are going to be -- petrobras gogoing to be stridin the world in its beat in an increasing way. >> martin, it's great to have you on the program. >> it's a pleasure to be here. it's such a hardship. we're not at the wedding, but we're watching with the otother two billion people. >> we wi watch the wedding on television. >> and brazil loves it here. >> my thanks to sir martin sorrell. up next on the "wall street jojournal repo," a look at the news this upcoming week t that will have an impact on your money. and then 12 stadiums in 12 cities. how soccerer brazil is building for its moment in the sports spotlight? are they ready for gametime?

for more on our show and our guests, i hope you'll check out the website, wsjr.cnbc.com. and i hope you'll follow me twitter. look for @maria bartiromo. now a look at the stories coming up in the week ahead that may move the markets and impact your money this upcoming week. we'll get the first quarter earnings reports from pfizer as wellll as kraft foods, visa and mastercard among other first quarter reports coming out. monday, congress returns from a two-week recess.

majority leader harry reid said he plans to bring the republican debt reduction plan to a vote on ththe senate floor. also on monday, the institute for supp and management will release its latest figures on activity in the manufacturing sector. tuesday we get total motor vehicle sales for the month of april. and then on friday, the latest jobs report sought. we'll find out how many jobs the economy lost or gained in the last month. 8.8% of americans are currently out of work. and finally today, thelock is ticking here in brazil for brazil's's double whammy in sports. the world cup is in 2014, and the olympics, the summer olympics happens two years after that. the country thatat prododuced p has three yearsrsto build 12 stadiums in 12 cities for soccer's main event. constructionn those venu may be a little behind with just one-third ofof the $20 billion infrastructure funds spent. rio's olympic facilities are further ahead, many built for the 2007 panamerican games. brazil is hoping for an $11

billion positive impact to gdp as a result of this moment in the sports sun and a chance to prove to the world that this emerging market has indeed arrived. that will do it for us today. thank you so much fojoining us from brazil. on this wweek's "wa street joururnal report nexteek st in n time for wedding season, wewe'lltalk wit fashio designer and ceo vera wang. each week keep it right here where wall street meets main street. have a great weekend, everybody, ♪ [ woman ] sam begged and pleaded... so i sent him to camp. we'd earned lots of points with our new citi thankyou card... and i put them to good use. he told me about his bunkmates, and how he signs up for every activity. ♪ he even hangs out with the camp director. just like that. [ malannouncer ] the new citi thankyou premier card gives you more ways tearn points. what's your story? citi can help you write it.