John Schlifske knows his way aroud the stock market. Before he became CEO of Northwestern Mutual, for more than 20 years he was calling the shots on how to invest the firm’s huge multi-billion dollar portfolio. So when he says he’s bullish on the markets, it’s worth listening why.
When I spoke with Schilfske in June, he ticked off the reasons for his optimism. No signs of recession. Easy monetary policy. No major bubbles to worry about. Earnings are strong. Companies have cash. The US consumer is strong. Wages are rising.
“All in all, there’s nothing to make me think not to be bullish,” Schlifske says. “We look at about 15 economic indicators and there’s only a couple that are even yellow. The rest are green.”
Does he still feel that way given the recent stock market selloff? Yes, actually. When I emailed him in August, he responded with a slightly tempered view.
“Earnings numbers are coming in softer and manufacturing weakness is evident as companies are hesitating to invest in this environment,” he wrote. “The consumer continues to be strong, however, and indicators other than the yield curve are still green. In short, risks have increased but the base case is still favorable for economic growth, albeit less than we saw post tax cuts.”
Schlifske’s call on the markets is critical for the millions of people who rely on Northwestern Mutual to invest their savings for retirement, education, and life insurance protection. The Milwaukee, Wisconsin based company has been doing that successfully for more than 160 years. With revenues of nearly $30 billion the company is number 111 on the Fortune 500 list of the largest companies in America.