What's ahead for the Financial Market? Interview with Jacob Wallenberg

October 3, 2007, Wharton interviews Jakob Wallenberg & Jeremy Siegel

After a terrible August, when the U.S. stock market appeared to be headed for the pits, October 1 saw a massive rally that sent the Dow Jones Industrial Average soaring above 14,000. Markets seemed to be celebrating the effects of the Fed's interest rate cut, and media reports said money was pouring back into equities. The following day, however, stocks began to fall again -- because the National Association of Realtors reported a sharp drop in home sales. In short, Wall Street still seems to be sending out mixed signals.

What will be the long-term effects of the Fed's decision to cut interest rates? Will the U.S. economy move past the sub-prime mortgage mess, or will it sink deeper into a morass and perhaps into a recession? What will be the effect of these developments on the European market? Knowledge@Wharton spoke with Wharton finance professor Jeremy Siegel and Jacob Wallenberg, chairman of the board of Investor AB, which is listed on the Stockholm Stock Exchange and is the largest industrial holding company in the Nordic region. In addition, he is vice chairman of Sweden-based SEB.

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