The Purse
The Purse
Britain posted the largest budget deficit since records began, how will Covid-19 impact inflation and your money, and how can couples better balance household chores
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Britain posted the largest budget deficit since records began, how will Covid-19 impact inflation and your money, and how can couples better balance household chores

Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing

Welcome to our #21 weekly newsletter in 2020.

Every week we curate key articles and content so you can stay informed and inspired about money and investing. And we spend hours sifting through content every week so you don’t have to.

We apply a female-lens to news and content about money and investing so that it is more meaningful to you.

Stay in the know. Keep on top of global economic, financial and investing news and trends. And read about what this means for you and your money in 2020 during Covid-19 and beyond.

If you’re short on time, listen to the editorial on audio for a brief overview.

“When we take control of our financial future we can live life on our terms”

-Jana Hlistova

Photo: August de Richelieu


From The Purse…

Editorial from the Founder


Global economies are slowly reopening as the pressure mounts to get ‘people working again’.

The global stock markets continue to be divorced from reality although the markets have been more cautious in May.

Investors consider: how fast will economies recover and what is the likelihood of new infections?

In April, Britain posted the largest budget deficit since records began and central government spending increased 57% whilst revenue fell 27%.

Inflation almost halved in April to 0.8% and unemployment is now at 2.1m. However things could get worse.

And for the first time the UK sold debt with a negative yield-which effectively means that investors are paying to lend to Britain.

The US is divided about a second $3tn stimulus package which would include handing out more $1,200 cheques as total unemployment reaches 38.6m Americans.

We spotlight what impact the coronavirus might have on inflation over the next ten years and what this means for your money.

And Chief, the US social network dedicated exclusively to women in professional leadership positions, has raised $15m in their most recent round of funding.

Overall, the pandemic is having a greater impact on women. More women are exposed to the coronavirus because they work in the healthcare and social care sector, more women have lost their job, and more women continue to shoulder the household, childcare and homeschooling burden.

Listen to the podcast by NPR in the Have You Seen This? section about how couples can balance household chores with Bridget Schulte, the director of the Better Life Lab.

Some good news: for the first time there are 37 female CEOs of Fortune 500 companies (US). Studies have shown that public companies with female CEOs or CFOs tend to be more profitable.

And if you have time, check out the TED talk about how to rebuild the global economy after the coronavirus.

Stay safe, take care of yourself and your loved ones.

I hope you enjoy this week’s newsletter. And until next week!

Jana


The Big Picture

Global markets and economy news, trends and indicators


The Coronavirus Effect:


Looking Ahead in 2020


  • There are 6 reasons why the stock market is divorced from reality, according to the Bank of America, chief investment strategist (US/global)

    • Central banks have deployed a total of around $4 trillion of asset purchases over the past eight weeks and the global equity market cap has surged by $15 trillion.

    • Fake markets: the government and corporate bond prices have been fixed by central banks. Why would you expect to see stock prices rise rationally?

    • Instead of looking at the $15 trillion market-cap growth, the global stock market rally should be viewed in context of the $30 trillion collapse between February and March.

    • Most global stocks remain in bear market ie 20% or more below their all-time highs.

    • The current rally is polarised: it is highly concentrated in growth-focused US technology stocks and "FAAMG" (Facebook, Apple, Amazon, Microsoft, and Google).

    • Investors are positioned bearish as most expect a ‘U’ or ‘W’ recovery.

    • Policymakers are causing an ‘immoral hazard’ forcing investors to buy, banks to lend, and corporate zombies to issue debt this year.


Coronavirus Impact: Your Money

Insights, trends and what this means for you and your money



Companies to Watch: winners & losers

Companies to watch and share price movements



In the Spotlight

Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse


What is likely to happen to inflation as a result of Covid-19? And why does it matter?

  • Inflation is the rate at which the prices for goods and services increase. It affects everything from mortgages to the cost of shopping and public transport.

  • It is one of the key measures of financial wellbeing as it affects how much you can buy with your money.

  • In April, inflation in the UK was at its lowest since April 2016 at 0.8%.

  • According to a white paper published by Pete Comley, author of a book called Inflation Matters, the coronavirus crash could lead to a wave of inflation in the latter half of the decade.

  • In the short term the government has been absorbing the cost of Covid-19 but in the long term the burden is likely to shift to ordinary people: inflation will start to rise.

  • The Bank of England (BoE) is predicting inflation will drop to near zero in the coming year, however as the world recovers from Covid-19, inflation could well push past its target rate at 2% to the 3%-5% range for the rest of the decade.

  • The government is likely to let inflation rise as an ‘inflation tax’ in order to reduce the real value of the country’s debts and make interest repayments more affordable.

  • The interest base rate is also likely to be held close to zero to make their interest repayments more affordable.

  • For private investors, inflation will erode returns on bonds and there is a risk of capital loss when interest rates do rise: some businesses may default on their loans.

  • For higher returns, it makes sense to invest in shares. However higher inflation will mean lower returns. Longer term, as inflation rises standards of living may be gradually eroded.

  • The latest inflation wave has just 16 years to go before it reaches its end-of-cycle maximum of 140 years.

  • Source: Covid Inflation


Have You Seen This?

Female-focused news, reports, research, campaigns



What We’re Tracking

Female-focused products or services, crowdfunding campaigns, start-ups and businesses led by female entrepreneurs & investment, research



Money Habits of the Week

Do you have a money habit you would like to share with us? Tweet @jointhepurse


Review the asset allocation of your pension or investment portfolio.

If you have a company pension or a SIPP (self-invested pension fund), find out how it is invested. For example, what is the mix of bonds vs equities vs commodities, in developed markets vs emerging markets.

Use this as a learning exercise to study your investments and understand them better.

And if you need to, contact an independent financial adviser.


What We’re Watching


  • Watch this recent TED talk interview with Kristalina Georgieva, the Managing Director for the International Monetary Fund (IMF) discussing how we can rebuild the global economy after the pandemic crisis.


Coffee Break? Read This



We’d love to hear from you. Do you have feedback? Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.