European union. The stock market seemed to be on the preface of this. Quickly realized while the United Kingdom did leave the eu,an it did not leave the planet and stocks around the world stage an impressive come back. Whats the true longterm come back to separate from the eu . Today were joined by John Schlifske, john, where are we right now . And do you think that the exit of Great Britain is a big deal for investors longterm . I think its a harbinger for things to come. So in a way its going to realign the commerce in europe and things like that. But i dont think its a big deal in terms of investing right now or changing the way youre approaching the marketplace. Its probably going to slow Global Growth a little bit, put a little pressure on stocks. But i think its not going to be a major negative factor on the stock market and we certainly dont view it as something to be afraid of. So nothing has changed in your overall Asset Allocation plan or the way youre thinking about where you want your clients to be . Certainly nothing has changed on the you know, from a major perspective allocation. I think on the margin, i think were going to see a little bit Slower Growth globally, thats better fixed income security. The yield curve is flat, which would argue more Global Growth. I think on the margin a little bit more fixed income and a little bit less in more dicey equities around the world. But john, i would say the one that was consensus at the end of this week is that Interest Rates continue to remain low and probably continue to go lower. Even some of the negative rates around the world. That has a huge impact on your business when you joined us last year, we talk about it. A you agree that were basically now going to trend lower here in the United States and what does that do to your business . So we are in a low for long period. Thats part of our philosophy. I was in japan in 2009 talking about to a bunch of Life Insurance companies there, and it made a dramatic impact on me so we have been able to thrive in this economic environment, so i think were well positioned. But of the camp that Interest Rates are going to stay low for a long time. I was meeting with a couple of governors with the Federal Reserve last week and everybody is talking about 2 growth plus or minus. When you have 2 growth globally, its hard how to see Interest Rates go up. Well, your assumption is in terms of return. Youve got this huge portfolio premium that you have to invest in order to run the business. Do you now think that from a year ago rates are where they are . Your total return is going to be low in your portfolio . We think investors have to adjust for lower total returns over the near term. Equities are going to be up 7 a year and youre going to get 5 and 6 on bonds are out that window and people have not fully adjusted for that but portfolio returns are not going to be the way they were. 2 growth creates a lot of financial anxiety. Youve got low income, low wages, low increases in wages, is there anything that we can do to make the individual investor less financially anxious . So theres a lot we can do and thats what our companys all about is figuring that out. Weve done some studies and have found that 85 of americans are worried about their Financial Security, 25 of them worry about it on a daytoday basis and over half of americans dont even know where to go. And the problem exists because i think historically the markets have done so well. People think all you need to do is put money in your 401 k , it will go up, and youre fine. But invest only approach to Financial Security is isnt enough. And what were telling people is that you have to integrate your insurance and your investments are on the plan in order to be totally financially secure, and you cant expect the markets to bail you out of bad decisions. Lets go back to when insurance was a product, because you did talk about that as well. And i think we got tremendous feedback last year. Peek saying i think about stocks, i think about bonds, i think about real estate, i dont think about insurance as an investment. How do you think about insurance as an investment . Life insurance has several features that augment the portfolio. In some ways its like your mobile phone. You use your mobile phone now not to make just phone calls. But, first of all, it has cash value that grows on a guaranteed basis each and every year. So thats a huge impact. Its tax deferd as well. And its tax deferred as well. Year after year, guaranteed. Second of all what it does is give you access to liquidity especially in down markets. So if you did need cash over the last few days when the market was down, you could access that without having to sell securities at a loss or things like that. But the biggest thing really i think is that it gives you an ability as you near retirement to almost construct your own defined benefit plan. It gives you the ability to create income for life in a way thats very safe and secure. And ultimately what it does to a portfolio is it reduces the volatility and increases your overall performance in the long run. You think theres a recession on the horizon given everything thats going on . We dont think theres a recession. Were modestly optimistic about the economy going forward. As i said i think its going to be low growth but theres so many good things going on in america right now. Youve got the demographics of our country, weve got a young population emerging, in fact, the fun fact i just saw yesterday, five years ago age 50 was the number one age in the United States. Now the top five number one ages are under 30. All 20 somethingyearolds. So weve got this millennial boomers, millennial generation thats moving into the consuming phase and ats going to help our economy. Were almost energy independent, were an entrepreneur invaded society, so i think were in a good position. The people like gary that still think theyre millennials . Well, i was just going to say that demographic fact is guessing for us. Yeah. John, stick around. Well be right back, folks. Okay. Thanks can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. My teeth are glowing. They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Welcome back to wall street week. Were talking now with northwestern ceo John Schlifske, john moving from the uk to the u. S. Weve got really interesting political situation here. Your business hates uncertainty. Pretty uncertain right now. How do you read things . Well, you know, from a president ial perspective, i dont think it really matters. With all due respect whether its trump or hillary, theyre only going to be in office for eight years. We invest for 30, on 40, 50 year cycles, so i think it makes better Reality Television than it does in terms of what you should do fran investment perspective. I think ultimately its a great place to invest. So from our perspective its dont change anything. Just stick with what you know. John, theres been a number of investors on our show, weve asked the question and they all say the same thing. It doesnt matter who the next president is. Heres what the markets look like. Do you think were that disconnected from the political situation and the tax and regulatory potential policies from the future administration inspect. No. I dont think were that disconnected, and i think i frankly think whoever gets in is going to have to have a better growth agenda. I think weve had eight years of very anemic growth and starting to show up in sort of personal in the accident and the way people feel about the country, and i think we have to get back on a growth trajectory but ultimately the politicians can only do so much. We have a fairly balanced political scene in washington right now between the democrats and the republicans. So i think its going to be more of the same sort of just middle of the road kind of stuff. Interesting point, though though, no matter who gets in. Interesting point, though, he said four years or eight years and were just beginning this process and youre looking way past that already thinking about what the business will be. When bob joined us about a month ago, he talked about this idea of trying to come up with some way to bring back all the money overseas with a change in the Corporate Tax policy, Corporate Tax rate, and it would have even a 1 positive impact to the gdp. Does that make sense to you . Yeah. I think i spend a lot of time on capitol hill, i think that both parties are really interested in reforming the Corporate Tax situation. Its crazy whats going on now. And i do think if they find a way to make it more pro growth, i think that will have a Huge Positive impact on the economy here. So they havent been able to do that. And they all want to do that. Theyve all talked about repatrioting the capitol, creating more pro growth environment, but they just cannot seem to do it. So when youre on capitol hill, and you ask them that question, what do they say . I think what you see is just a difference in opinion. One side wants lower rates and pro growth agenda and the or side wants to make theres a fair redistribution of wealth and things like that and on the ground from those situations. Frankly from our perspective i would like to say were a company. We have to thrive which party is in power, so i dont pay too much attention to that, and we just try to live within the rules that were given and do as best we can. Any sectors that youre super bullish on right now . Well, given the low growth, low rate environment, were very positive on corporate fixed income. I think high yields attractive right now. Were investing in real estate and mortgages. Structured credit as well . We dont do a lot of structured credit but the Higher Quality and the high yield market strong double bs and strong single bs. I wouldnt get down into the triple c category but there seems to be good value there. So i think where you can get good yields without taking an enormous amount of risk, thats kind of where we see the play right now. And what about the opportunities outside the United States . I know that youre focused on this country, and youre focused on your clients in this country, but as you talked about japan, youve got Interest Rates around the world down low and negative. Do you look to try to take advantage of any opportunities outside of the country . Sure. 20 of our investment portfolio is invested globally. Europe, asia, south america. You know, the big thing i think were focused on right now is 100 of our feign investments are hedged. Hat was the second part of my question. Given what has happened with the dollar this week, are you trying to take out the currency or get total return . We think the dollar is going to continue to strengthen, so we do not want to have a lot of foreign currency risk in our policy right now. Were 100 hedged and were just investing in companies that we think can grow globally. I think the separation vote in the uk could be an opportunity for some private Equity Investment in europe right now, you know, because things are cheaper than they were. You had to name two reasons why the dollar was going to shrink, what are they . I think the two big reasons are we have positive rates, i just read in the last day or two, i think theres 12 trillion in bonds globally that are in negative yielding securities. Right. So we have a positive yield curve still. Positive yield even at the shortened and then the second thing is safety. People know the United States is going to stand behind its debt and its just the one last place where you can get certainty principle. Really appreciate your time. And we want to thank John Schlifske for joining us today on wall street week. Weve got more ahead. Stay with us you guys be good. Ill see you later [ bark ] [ bark ] bye. See ya pal. Ever wonder what your pets do when you leave home . [ laughing ] aw you cutie pie. Aw. Aw. Aw. Aw. [ barking ] [ washing machine running ] partys on know what your pets are up to with xfinity home. Xfinity. The future of awesome. See the secret life of pets, in theaters july 8th. By switching to xfinity x1. Rio Olympic Games show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Donald trump taking a tough stance on trade. Vowing to reject Free Trade Agreements like nafta and renegotiate better deals for american workers. Trump also took aim at one of the nations top trading partners, china. Im going to instruct my treasury secretary to label china a currency manipulator. Which should have been done years ago. Any country that devalues their currency in order to take unfair advantage of the United States, which is many countries, will be met with sharply. And that included tariffs and taxes. Our fox business allstar, one of them is laughing right here, good friends Charlie Gasparino and liz claman joining us now. Charlie, i love the music. I cant believe im sitting here. Very traumatic. Didnt you grow up watching this . What about the opening when im walking and hes working. Lets talk about donald trump for a second. Tough talk on trade. What do you think, liz . Is that the right approach . I dont know why everybody think so this is such an original call to label china a currency manipulator. Ever since china extricated itself or tried to crawl out of economic isolation in the 90s, everybody said youre manipulating your currency, youre weakening it to take advantage of a cheaper export opportunity so that we could then see you export more to our countries . Well, guess what. News flash. Any country with a central bank could very well be labeled a currency manipulate, including the United States, they expand or contract their money supply depending on what works for them at the moment. Do you think we have a Free Trade Agreement with china that is fair . No. We dont. But guess what . Weve got an agreement that is constantly morphing and, in fact, it was president obama who just a couple of years ago imposed much higher tariffs on cheap chinese steel so that they wouldnt take advantage of what was already a failing industry. Lets try to explain to the American Public we just said about their because theirre incomes are down. So how do you explain to the American Public that whats going on with our Free Trade Agreement with china is good for them. I will say one thing when i saw the first saw that video of donald speaking, i thought it was a clip from christmas. It looked like a christmas you know, heres the thing. No trade agreement is perfect. You know, when the u. S. Does something known as qe, meaning manipulating our currency, by the way. We were buying stuff, we were lowering Interest Rates, we were manipulating we were changing the value of a dollar just by doing that. And doing it in our favor. So i remember every country does that. Listen, if you tell me the chinese cheat, i would say, yeah, they do. Theres ways of fighting that without getting into protectionism. Now, the real question is this, and this is what donald trump refuses, and i expect you of all people, you know, adult in the room, to walk up to him and say, donald, here is economic because you know this guy. Youre on the airplane with him. Here is the number here are the numbers. Heres what free trade has done for the u. S. And heres what it hasnt done, and i tell you every rational economic analysis. I think its misunderstood. The Hedge Fund Manager paul singer, big republican donor said this week that if trump is successful if trump is elected and successful in these trade wars, well have a global depression. But i wanted to ask you. A lot of respect for paul. Right. Youve had him at the conference. Very smart investors. But some an mouse going on there that i dont fully understand. The bigger question republicans is that the democrats seem to coalesce about around somebody that they may not necessarily like but the republicans are having a very hard time doing that. Listen, maybe im missing something, and you guys are immersed in economics as much as i am. The numbers on free trade are positive to the american worker. Theyre better than they would be and to the American Consumer because if you start to impose very high tariffs on things. Yeah. I dont very high costs, everybody uses the walmart case. Forget walmart. A lot of Small Businesses bring in goods, and theyre cheaper for their again, my view, i dont think that that was the reason for the speech. What hes basically saying is that weve had an imbalance in terms of our trade agreements for the last seven years. That was designed by the United States to help develop these other countries. And we all understand that. Now opening the question up. We have the lower and middle class here that are struggling. Do these trade agreements need to be as unfair as they have been over the lasts 70 years. So you really do think they were corrected the