Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #19 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.
“Money fuels our life, it fuels our choices. It’s what allows us to have power and agency in our life. When we take control of our financial future we can live life on our terms” -Jana Hlistova
Source: Moose Photos
From The Purse…
Editorial from the Founder
The Bank of England (BoE) forecasts the worst recession for Britain in the last 300 years. It has predicted output will drop by nearly 30% in the first half of this year; the economy falling 14% in 2020 only to recover 15% by 2021.
However some economists do not agree with what they consider to be an overly optimistic economic forecast.
In the US, unemployment has hit a postwar high of 14.7% which is now over 30m Americans. Some expect the unemployment rate to rise to 20% in May.
As the global economy limps on, the global stock market has been rising since it hit the bottom towards the end of March. Last week global stocks gained $1.5 trillion.
Governments around the world have made it clear that ‘they will do whatever it takes’ to ‘cushion’ the coronavirus impact. Central banks are using tools such as quantitative easing (QE) in order to soak up the government debt. Read more about what QE is and how it can affect us all in the Spotlight section of this newsletter.
All eyes are on Bitcoin: the third halving event will take place on Tuesday, 12 May.
According to a new poll for the New York Times, home schooling is disproportionately being handled by women during the coronavirus lockdown. And Sheryl Sandberg writes about the ‘double double shift’ for women during the pandemic. As if women didn’t have enough to do already.
I interviewed Anna Sofat, Founder & Wealth Advisor for the Progeny Group: we talked about financial planning, how to make your money work for you and how to invest for social impact and more. You can listen here and here.
Stay safe, look after yourself and your loved ones.
I hope you enjoy this week’s newsletter. Until next week!
Jana
The Big Picture
Global markets and economy news, trends and indicators
The Coronavirus Effect:
Global stocks gained $1.5 trillion last week; investors become more accustomed working from home, absorbing data points around virus spread, the development of vaccines and a wave of stimulus packages being implemented.
According to the Bank of England (BoE), Britain faces the worst recession in 300 years ie since 1709. But there is no additional stimulus to the economy for now and interest rates remain at 0.1%
In the Monetary Policy Report, the BoE predicted output in the first quarter will fall 3% and will further drop 25% in the second quarter.
Total output is expected to drop almost 30% in the first half of 2020.
It is also forecast that unemployment will rise to 9% in 2021, up from 4%.
The BoE also predicted inflation will drop to 0.5% in 2021 but expects in 2022 inflation will return to the 2% target.
They expect the economic damage to the economy to represent 1.5% of GDP.
The BoE expect a V-shaped recovery to the economy which means the recovery will be far more rapid than the global financial crisis in 2008/2009.
The BoE’s scenario shows the economy falling by 14% in 2020 and then recovering by 15% in 2021.
23% of businesses who responded to its latest survey said they had “temporarily closed or paused trading” last month.
Of those who responded to the survey, between 6-19 April, the main sectors that were affected were: accommodation and food service activities (81%) and arts, entertainment and recreation (80%).
UK: a net of £2.6bn was invested in equity funds in the UK in April
According to data provider Calastone, small investors poured into the stock market-up to six times more than in a typical month.
Global funds have been the most popular destination for investors followed by funds invested in UK equities.
Investors have also turned to active funds rather than passive funds.
US hits postwar unemployment high at 14.7%
In April, 20.5m Americans lost their jobs due to the coronavirus.
Unemployment has climbed higher for women in April to 15.5% compared to men which increased to 13%.
It is possible that unemployment in May could increase to 20%.
Donald Trump claimed that the coronavirus came from the Wuhan Institute of Virology which is denied by China.
Trump also suggested that new tariffs on China could be the ‘ultimate punishment’ for Beijing.
On Friday, Trump cast doubt over the Phase 1 trade agreement with China after a phone call.
China is likely to be a focal point for the US presidential campaign.
Bitcoin broke the $10,000 price barrier for the first time since February before falling to around $9,600. On Sunday the price dropped 10% to $8,100-$8,600.
In contrast, gold’s price has increased by 4% over the last month.
Looking Ahead in 2020
By his calculation, $3.9 trillion of money, the equivalent of 6.6% of global economic output, has been printed since February.
“We are witnessing the Great Monetary Inflation -- an unprecedented expansion of every form of money unlike anything the developed world has ever seen.”
According to Tudor, Bitcoin is a store of value as it has these four characteristics: purchasing power, trustworthiness, liquidity and portability.
Andreessen Horowitz invests over $500m into the crypto trade
The enterprise capital agency will make investments $515 million into the long-term growth of “crypto networks and businesses.”
“Gold has long played the role of a fiat substitute, but Bitcoin is a digital alternative that is gaining acceptance and adoption around the world,” the a16z Crypto Fund II announcement particulars.
Policy actions in response to the coronavirus crisis should cushion the impact of the virus.
Despite the significant rallies in equities in the last few weeks, the price declines imply significant expected returns compared to eg US debt.
Coronavirus Impact: Your Money
Insights, trends and what this means for you and your money
Six money-saving ideas for for lockdown and beyond
Use tech to shop around
Chase refunds for services you can’t use
Claim the benefits you’re not entitled to
Clear the credit card quicker
Review rainy day savings
Return items even if shops are closed
Half of UK parents with young children face money woes
Parents are twice as likely as those without children to say they will struggle to make ends meet in the next three months, with 51% of parents of under-11s and 56% of single parents agreeing, compared with 27% of those who are not parents of young children, according to the research.
Women are also feeling more anxious: it found that among general workers 46% of mothers of younger children report anxiety compared with 36% of men, and 24% of men who are not parents of young children.
Companies to Watch: winners & losers
Companies to watch and share price movements
Disney reports a 58% drop in operating income from parks and cruises, its worst hit segment.
Disney reported mixed results for Q2 2020 earnings.
The coronavirus has disrupted its theme parks and cruises business.
Disney saw a bright spot in its direct-to-consumer business. The company reported it had increased the number of paid subscribers to its new streaming service-from 33.5m to 50m+ paid subscribers from March 28 to early April.
AirBnB is to cut 25% of its workforce and scale back its efforts in the high-end travel market due to the impact of the coronavirus.
1,900 out of 7,900 workers will be made redundant.
Revenue forecast for 2020 likely to be less than half of what it took last year.
The company raised $2bn in April valuing the company at $18bn, a steep drop from its $31bn valuation in 2017 (previous funding round).
Neiman Marcus, the upscale department chain store in the US, has filed for bankruptcy protection.
Private-equity backed, it plans to eliminate $4bn of its $5.5bn burden debt.
Creditors had committed to provide $1.43bn in financing to help the business through the restructuring and its aftermath.
BT has cancelled dividends until 2022, shares plummet
The telecoms group announced Thursday it would cancel its dividend and would accelerate its investment programme during Covid-19.
They plan to invest in 5G and increased rollout of the Fiber internet.
The shares dropped 10% before recovering.
BT posted disappointing full year earnings as adjusted EBITDA fell 3% to £7.9bn. Revenue also fell 3%, but this was broadly inline with expectations.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
What is quantitative easing and how does it affect me?
Today policy-makers promise to do whatever it takes to prop up the economy to limit the impact of the coronavirus.
We have seen governments around the world introduce stimulus packages in order to support individuals, businesses and even cities/municipalities through this pandemic crisis.
Quantitative easing (QE) is a tool used by central banks in order to inject money into the economy.
Often referred to as ‘printing money’, the central bank will create digital money in order to finance government spending directly.
In times of emergency and often during wartime, central banks lend money to the government.
Without limit, financing the government in this way can lead to hyperinflation.
But these risks can be manageable especially if these economies are met with increased demand.
Should inflation begin to rise, central banks can use tools such as increase interest rates or unwinding QE.
Alternatively we may experience deflationary pressures-like Japan.
However, there is ongoing debate about printing money: how this devalues currency, will the US dollar remain as the world’s reserve currency, the risk of hyperinflation and the extent to which institutions should be allowed to intervene in a free-market economy.
It is for this reason that we see continued interest in Bitcoin: the first digital currency created, distributed, traded and stored with the use of the blockchain.
Have You Seen This?
Female-focused news, reports, research, campaigns
By implication, underrepresented founders including women, who tend to raise less funding through VCs, arguably need government support more but are less likely to get it.
The scheme is not compatible with SEIS and EIS, tax breaks the vast majority of angel investors leverage in order to invest in early start-ups.
Female founders facing hurdles face funding hurdles amid pandemic. (US)
Nearly half of men say they do most of the home schooling. 3% of women agree (US)
According to a new poll by Morning Consult for The New York Times, home schooling is disproportionately being handled by women during the coronavirus lockdown.
Fathers don’t agree: nearly half of those with children under 12 report spending more time on it than their spouse — but just 3% of women say their spouse is doing more. 80% of mothers say they spend more time on it.
The results suggest men and women are not dividing housework or childcare work any differently or more equitably than they were before.
70% women say they’re fully or mostly responsible for housework during lockdown, and 66% so for child care-roughly the same shares as in typical times.
What We’re Tracking
Female-focused products or services, crowdfunding campaigns, start-ups and businesses led by female entrepreneurs & investment, research
Starling Bank, founded by CEO Anne Boden, will start offering the government’s new Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS).
Under the BBLS, lenders are offered a 100% government-backed guarantee. However the intention with BBLS loans is that they are repaid.
Whilst some previously accredited lenders opted out, Starling Bank decided without hesitation to become lenders under these schemes, fully aware of the advantages and disadvantages. It wasn’t a difficult decision. As a bank for SMEs, we had to do it.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Spend some time studying digital money and bitcoin this week.
We live in unprecedented times-government debt globally has never been higher as central banks print money around the world. What will happen to fiat currency over the medium to long term?
What We’re Watching
Don Tapscott: A leading analyst of innovation and the impacts of technology, Don Tapscott has authored or co-authored 15 widely read books about various aspects of the reshaping of our society and economy.
In this TED talk, Don Tapscott demystifies blockchain: this world-changing, trust-building technology which, he says, represents nothing less than the second generation of the internet and holds the potential to transform money, business, government and society.
Coffee Break? Read This
Gender expert on why women leaders are doing a great job in response to the Covid-19 crisis (UK)
Women are struggling more with mental health under lockdown than men (US)
‘There’s no room for mediocre women’: Madeline Albright on females and leadership (AUS/UK)
‘It’s a mistresspiece!’: the 14-hours film about forgotten female directors (UK)
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.
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