Coronavirus fears: panic gripped the global markets this week wiping $6trn in value, how do you think about a falling stock market, and single women get lower returns from buying and selling property.

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

Mar 01, 2020

Welcome to our #9 weekly newsletter in 2020.

Every week we curate key articles and content so you can stay informed and inspired about money and investing without the boring bits!

This is your weekly go-to place to read up on all things money-related.

We spend hours sifting through content every week and apply a female-lens to news and content about money and investing so that it is meaningful to you.

Ultimately we want to support you in making well-informed financial decisions, grow your net worth and ensure your financial security.

Photo by Startup Stock Photos

From The Purse…

Editorial from the Founder

Women are long-term investors because they tend to buy and hold stock. Women also tend to spend more time researching their investments. They examine more possibilities and are far more detailed in how they do their research.

It therefore may not surprise you to know that women are in fact ‘better investors’ compared to men.

Women study and plan more but trade less. Whilst they pay less in stock transaction costs, they spend more in sourcing professional advice.

At times of financial market uncertainty, it’s well worth revisiting your investing principles and investing strategy and try to remain calm.

Being clear on the end goal and riding out the storm is often what is called for.

And remember to reach out to a financial advisor or seek professional advice if you need to.

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

Jana

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The Big Picture

Global markets and economy news, trends and indicators

Coronavirus fears: investors are worried after a rise in the number of companies warning about the impact of the outbreak on firms.
- Panic gripped the global markets this week as the coronavirus outbreak has hit businesses, and it may have a longer-than expected negative impact on company earnings and global growth.
- Companies including Apple, Microsoft, Diageo have all issued financial warnings due to the coronavirus.
- Public health experts call the coronavirus a ‘pandemic’, as coronavirus cases are confirmed in the US.
Source: Photo by Anna Shvets
Global equity markets had an estimated $6tn wiped from their value in the biggest weekly loss since the depths of the financial crisis.
- Traditional safe haven gold was also tumbling, down 3.4% to $1,588, on Friday (28 February).
- Simultaneous losses in both riskier and low-risk assets is a sign that traders are having to sell in order to cover their losses.
- The Vix Index, one of the most closely watched measures of expected volatility in Wall Street stocks, jumped as high as 49-its highest since 2009.
- Track the Vix Index here
London's FTSE 100 share index has seen one of its worst weeks since the depths of the financial crisis in 2008.
- Shares have shed almost 13% of their value, wiping £210bn from the value of companies on the index.

The crypto markets have also dropped at least $38bn in value since Monday which may be a reaction to a ‘bad week’ for investors.
The market is expecting interest rates to be cut quickly and decisively globally.
- On Friday, the Federal Reserve (US) in a statement said that they would “act as appropriate” to support the economy in response to the “evolving risks” posed by the spread of the coronavirus.
“Follow the flows”: global banks have pumped billions in liquidity into the markets. This could end the ‘global rout’.

Holger Zschaepitz @Schuldensuehner

Follow the flows: Central banks have pumped billions in liquidity into the markets. This could end the global market rout.

However, according to stock brokerage firm Charles Schwab, disease outbreaks often weigh on global stock markets in the short term, but the impact fades over time (see diagram below)

There is concern that the market rout will turn into a credit crunch.
- Credit market and debt rollovers should be an area of focus.
- Corporate debt has risen dramatically in the last ten years.
- In June 2020, $200bn worth of debt is due to mature in the sectors most exposed to the slowdown.
Read more about the coronavirus and how it compares to the seasonal flu.

Looking Ahead in 2020

The coronavirus and the impact on the travel industry
JP Morgan: blockchain is laying the bedrock to digital money.
- JP Morgan published a 74 page report outlining their global enthusiasm for blockchain technology in the financial sector.
- The report describes 2019 as the ‘rise of digital money’.
- They suggest that the ‘groundwork is now in place’ for the massive adoption of blockchain in the realm of ‘payments, trade finance, and custodial services’.

BlackRock has released a new report this week which outlines that the value of sustainability is not properly valued by markets.
- This will have ‘significant implications on the expected returns and the pricing of assets-and therefore on every asset in the investment universe’.
- Millennials and women tend to invest based on their values and social impact.

In the Spotlight

Is there a topic you'd like us to Spotlight? Please email jana@jointhepurse.com or tweet @jointhepurse

How do you think about a falling stock market?

A global stock market, in theory, is a reflection of what happens in the world and the impact this will have on the economy.
Investors are not only predicting the impact on businesses due to for example, workers being ill, an expected fall in how much money consumers spend or disruptions to the supply chain, but importantly, it is also about investor sentiment and what people think will happen.
How the public responds to a crisis can have huge consequences on the financial markets. People may travel less, go out less and therefore spend less money.
Regardless of what may be deemed a ‘rational response’, if people are cautious and concerned, the impact on the economy and therefore the financial markets is real.
If investors judge that the public is not going to respond well, they may exacerbate the negative impact by panic-selling in the stock market.
However it is very difficult to predict what may happen.
(Source: The Atlantic)

And here’s Chamath Palihapitiya (CEO Social Capital & Chairman of Virgin Galactic) on Twitter:

Chamath Palihapitiya @chamath

I can’t remember a more volatile start to a year in recent memory. January: US assasinates General and postures war with Iran February: Coronavirus pandemic roils world travel, GDP and capital markets What will March have in store? Who knows, but stay calm, chaos will subside.

Have You Seen This?

Female-focused news, reports, research, campaigns

BBC faces more pay disputes
- According to new data released under the Freedom Information Act, 8 staff members have lodged claims with the employment tribunal.
- Another 38 will be reviewed internally by the broadcaster’s grievance process.
- Newswatch presenter Samira Ahmed won a landmark equal pay case last month where the BBC where unable to explain why her co-presenter Jeremy Vine was paid seven times more than her. Ms Ahmed is owed £700,000 in back pay.
Millions of savers who miss out on pension contributions while raising their children or caring for elderly relatives could be granted £875 a year towards their pensions.
- Women could benefit the most from such a policy: the data shows that they are £106,000 worse off than men when it comes to saving for their retirement.
Advisers have been urged to tap into the '£36.8bn wealth of Generation X and millennial women' as part of Parmenion’s ‘Advise Her’ campaign.
- According to the research, there is an obvious gap between the money women have and the money women are investing.

Single women get lower returns from buying and selling property
- According to research by Kelly Shue and Paul Goldsmith-Pinkham from Yale University (US), single women lose out to approximately $1,600 per year from buying and selling real estate.
- This inequity may in part explain the gender gap in wealth accumulation.

What We’re Tracking

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

Marks & Spencer (M&S) has launched a digital bra-fitting tool to drive more sales.
- M&S has struggled recently, falling out of the FTSE 100 as profits fell from £1billion-plus in 2008 to £523million last year.
- The bra-fitting service is part of a strategy to focus on 'killer products' where the company is already a market leader, such as lingerie, jeans and nightwear.
- M&S's share price is now 171.95p, close to the 30-year low of 164p it reached in October.
- According to Amanda Glover, digital change manager at M&S: 'We know nearly 90 per cent of customers buy a bra after a bra-fit.'

Money Habits of the Week

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

During times of uncertainty in the financial markets, it is a good idea to remain calm and avoid responding impulsively to movements in the market.
Revisit or review your long-term financial and investment goals.
Remind yourself that financial markets move up and down; cycles are a common feature of the market.
Use this time to reflect and research any potential investments.
Seek professional advice or talk to a financial advisor.

Caught Our Eye

Digital tools for managing your money and investing

Interactive Investor is UK’s number one flat-fee investment platform.
You can open an account for £9.99 a month and all service plans offer at least one free trade a month.
Open a SIPP (self-invested personal pension), an ISA and/or a trading account.
You can also open an ethical investing account.
Disclaimer: this is for informational purposes only.

We’re Applauding

Female role model in politics, finance, business, money, or investment

We’re celebrating Katherine Johnson, who died at 101 years of age on the 24th February: a mathematician who broke barriers at NASA.
She was one of a group of black women of mathematicians who was also celebrated in the film called Hidden Figures in 2016.
Katherine was responsible for calculating: ..." the precise trajectories that would let Apollo 11 land on the moon in 1969 and, after Neil Armstrong’s history-making moonwalk, let it return to Earth”
In 2015, President Barack Obama awarded her the Presidential Medal of Freedom.

The New York Times @nytimes

They asked Katherine Johnson for the moon, and she gave it to them

nyti.msKatherine Johnson Dies at 101; Mathematician Broke Barriers at NASAShe was one of a group of black women mathematicians at NASA and its predecessor who were celebrated in the 2016 movie “Hidden Figures.”

What We’re Reading

Extraordinary Popular Delusions and the Madness of Crowds is the original guide to behavioural psychology - and how manias, follies and superstitions begin, spread and (eventually) pass.
Given the ‘coronavirus fear’ that grips the global markets right now, we thought it was worth reading this insightful book published almost 180 years ago, which takes us on a tour through (including) financial scams, stock market bubbles and prophecy wars.

Coffee Break? Read This

We’d love to hear from you. Do you have feedback? Have we missed anything? What would you like to see more of? Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.