Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #36 weekly newsletter in 2020.
Every week we curate key content and apply a female-lens so you can stay informed and inspired about money and investing.
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.
“Our mission is to help women take control of their financial future”
-Jana Hlistova
From The Purse…
Editorial from the Founder
Global stocks lost $1.6tn market cap in a tech rout this week as investors shifted their money into more cyclical pro-vaccine beneficiaries. And global factories posted their fastest growth in almost two years.
The US economy has recorded a fourth straight month of job gains; unemployment has dropped to 8.7% vs the expected 9.8% by economists.
Meanwhile the eurozone dips into deflation (down by 0.2%) and unemployment rises to 7.9% (up from 7.7% in June).
And the Bank of England (BoE) warns of huge uncertainty about economic scarring from Covid-19.
In the Future Focus section, read about why investing for social good is finally becoming profitable.
And why according to US billionaire, Bill Ackman, mandatory investing accounts for children can help combat wealth inequality. We love this.
In the UK, households and non-financial businesses are likely to hang on to their cash.
Apple’s market cap, valued at an all-time high of $2.1tn, overtook the value of the FTSE 100.
We spotlight what a stock split is and how this has affected Tesla and Apple stock.
In the Have You Seen This? section we highlight why female fund managers have outperformed men during the pandemic.
And we‘re tracking a French startup called Coot, recently rebranded to Share (d), which helps separated and blended families stay organised.
If you have time, watch Michelle Greene give a TED talk about how the Long-Term Stock Exchange is reimagining public markets by holding companies to forward-thinking standards of diversity and inclusion, employee investment and environmental responsibility.
Stay safe, look after yourselves 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 lost $1.6tn market cap in tech rout this week against a backdrop of good macro data:
Global factories have posted their fastest growth in almost two years.
According to JP Morgan: global factory output expanded in August at the most rapid pace since November 2018:
US unemployment falls to 8.7%, beating forecasts of 9.8%
In August, 1.37m jobs were added.
The US economy has recorded a fourth straight month of job gains.
Consumer prices in the euro area dropped by 0.2% year-on-year in August, new data.
Low inflation is a boost to consumers, but it will cause alarm at the European Central Bank (who are aiming for 2%).
Eurozone unemployment rises to 7.9%
Up from 7.7% in June, which is the highest since 2017.
Eurostat estimates that 15.184 million men and women in the EU, of whom 12.793 million in the euro area, were unemployed in July 2020.
UK: Bank of England (BoE) warns of huge uncertainty about economic scarring from Covid-19
The Bank has estimated it could mean GDP is 1.5% lower - but there’s much uncertainty over this.
Two different views: people are ‘naturally cautious’ about re-engaging with the economy vs how much structural change there will be in the economy.
More stimulus is likely to be needed in the economy.
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
US: Investing is social good is finally becoming profitable
Impact investments are outperforming traditional bets in the coronavirus crisis, which may be a turning point for wealthy investors looking to generate change:
Over all, 64% of actively managed E.S.G. funds beat their benchmarks versus 49% of traditional funds through the first week in August, according to research from RBC Capital Markets.
Top tip: It’s important for individuals to look at the authenticity of asset managers and how rigorous their screening methods are.
Mandatory investing accounts for every child will help combat wealth inequality
According to billionaire Bill Ackman wealth inequality poses a ‘black-swan-type’ risk to investors and US capitalism. He said:
A $6,750 investment at birth, with average returns of 8% per annum, would yield more than $1 million by retirement.
The government could also mandate that companies set aside a portion of workers' wages for a tax-free investment fund, similar to Australia's pension system.
Your Money
Insights, trends and what this means for you and your purse
UK: Households and non-financial businesses likely to hold more liquidity:
According to Bank of England policy maker, Michael Saunders, households are likely to want to build up deposits in their bank accounts to protect against uncertainty and potential job loss.
The cost of breaking up: getting a divorce is trapping women in debt
Around 42% of marriages in England and Wales end in divorce.
The latest estimate puts the average total cost of divorce at £14,561.
Women who suffer from economic abuse are worse off.
Check out the Surviving Economic Abuse website
Companies: winners & losers
Companies to watch and share price movements
Tech stocks took a hit this week: combined market cap of FANGMAN (Facebook, Apple, Netflix, Google, Microsoft, Amazon, Nvidia) has lost $636bn within 2 days, almost equal to GDP of Switzerland.
Apple overtakes the value of the FTSE 100
The world’s most valuable company is now worth over $2.1 trillion, an all-time record.
The Footsie (which is light on tech stocks) is now worth around £1.5 trillion, or roughly $2 trillion.
Apple has surged by an astonishing 75% this year, the blue-chip FTSE 100 has lost over 20% of its value since 1 January.
Apple’s shares also got a boost from its stock split. Investors now own four Apple shares for every one they owned last week.
Zoom shares soar after revenue more than quadruples from last year
Zoom rose almost 23% in after-hours trade after it reported a 355% rise in revenues to $663.5m for the July quarter, smashing forecasts for around $500m.
Zoom’s market cap now stands at more than $129 billion, up from $25 billion a year ago. The company is now larger than IBM and AMD.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
What is a stock split?
A stock split is when a company divides the existing shares of its stock into multiple new shares to boost the stock's liquidity.
Tesla has recently split its stock 5 to 1 which fuelled a 7% jump in the share price on Tuesday.
Apple also recently split its stock 4 to 1: investors now own 4 Apple shares for every Apple share they owned last week.
That makes the stock more affordable to small investors.
Stock splits don’t actually make these companies more valuable, but investors have been enthusiastically buying up both Tesla and Apple shares.
Source: The Guardian & FT.
Have You Seen This?
Female-focused news, reports, research, campaigns
1 in 4 women miss out on a pension
The Resolution Foundation, a think tank, said that 24% of women were ineligible for automatic enrolment pensions, despite being in work.
Companies only need to enrol staff in a work pension if they earn over £10,000 per annum.
Know this: on average a woman’s pension is one fifth of the average man’s. Women are paid less, they are more likely to take career breaks and work part-time in order to take on the majority of childcare. This has a major impact on a woman’s purse. If you are not eligible for a work pension, you can set up a self-invested personal pension (SIPP) in the UK. There are a number of online investment platforms which allow you to set up a SIPP today. Make a commitment to invest monthly into your pension, however small the amount. Don’t forget that the UK government gives you a tax relief every time you make a pension contribution.
Female fund managers beat men at stock picks
According to Goldman Sachs, even after adjusting for risk, female-managed funds have outperformed their counterparts amid the pandemic-related market swings.
Female-managed funds are benefiting from a preference for technology stocks, an industry that has dominated gains. Male managers lean toward financial shares, the second-worst performer in the S&P 500.
Know this: women are still a small minority in the industry. Only 3% of the mutual funds tracked by Goldman have an all-female fund manager team, collectively managing just 2% of total assets. In contrast, 77% are managed by an all-male team, with these funds accounting for 57% of assets.
What We’re Tracking
Female-focused products or services, start-ups and businesses led by women, investment and research.
Coot (rebranded at Share (d)) (France): founded by Anthony Amouyal, helps separated and blended families stay organised, and avoid disjointed multi-channel communications like across post-it notes, whatsapp and email.
The start-up has just raised €3.7 million from a family office and Bpifrance.
The fresh funds will prepare the team for its expansion across France and globally.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Study how Big Tech stocks have performed since the pandemic compared to bank stocks or stocks in travel, retail or the leisure industry.
Read up on tech companies including Zoom, Apple, Tesla and Salesforce (we have covered these in The Purse newsletter-also see previous editions).
Consider UK based tech companies which are listed: how well have they performed and why?
Track your findings and jot down any questions you have. Search for the answers online and add to your notes.
Keep learning and stay engaged.
What We’re Watching
Michelle Greene: is President of the Long Term Stock Exchange and she believes that we can use our financial system to change the way companies show up in the world.
Watch this TED Talk: ‘about how the Long-Term Stock Exchange is reimagining public markets by holding companies to forward-thinking standards of diversity and inclusion, employee investment and environmental responsibility -and generating better outcomes for everyone involved’.
Coffee Break? Read This
How women-led fashion tech companies are shaking up the industry
US: A new report shows that the gender pay gap is closing for new hires, in July 2020
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
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