Welcome to our #69 weekly newsletter.
Every week we curate key content and apply a gender 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 2021 during Covid-19 and beyond.
If you’re short on time, listen to the audio for a brief overview.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
Editorial from the Founder
The global stock markets fell sharply at the start of the week and rebound again (from mid-week). In the US, Big Tech took a hit Monday on concerns about rising inflation and high valuations. The selling then spread to the rest of the market and across the Atlantic.
US consumer prices have risen at the fastest rate since 2008. The 4.2% jump in inflation is a significant leap compared with the 2.6% reading in March.
This reflects a combination of government stimulus, supply bottlenecks and increased spending as economic activity picks up (following the rollout of Covid vaccinations).
The European Commission has upgraded its growth forecasts.
The governor for the Bank of England (BoE), Andrew Bailey has said that the drivers of inflation will not persist.
Tesla CEO, Elon Musk said Wednesday on Twitter that Tesla has ‘suspended vehicle purchases using bitcoin’, out of concern over ‘rapidly increasing use of fossil fuels for bitcoin mining.’ Over $365bn+ has been wiped off the market’s value following Musk’s decision to halt support for bitcoin payments.
Internet Computer, a new cryptocurrency was launched on Monday.
And UBS is looking into offering crypto investments to wealthy clients.
In the Future Focus section, read about the rising concerns regarding inflation and will central banks and investors hold their nerve?
Cathie Wood, the founder of Ark Investment Management LLC now controls $39.7bn in her U.S. exchange-traded funds (ETFs), down from more than $60bn at a peak in February. Throughout the downturn, Wood has said repeatedly that her strategies haven’t changed and that she invests with a five-year time horizon.
And in the Have You Seen This? section read about women reaching a record share of S&P 500 bank boards due to retiring men.
We are tracking a global report about women, cryptocurrency and financial independence.
And don’t forget to listen to The Purse Podcast interview with Rebecca Chesworth, Head of Equities for ESG & Sectors for State Street Global Advisors.
We talk about the equities market, key trends, exchange traded funds, cyclical vs value stocks, sectors, and responsible investing. And Rebecca shares her thoughts on how women can engage more around their money.
Stay safe, look after yourselves and your loved ones.
I hope you enjoy this week’s newsletter.
Jana
The Big Picture
Global markets and economy news, trends and indicators
The global stock markets fell sharply at the start of the week and rebound again (from mid-week)
(US) Big Tech took a big hit on Monday on concerns about rising inflation and high valuations. The selling then spread to the rest of the market and across the Atlantic.
The FTSE 100 suffered its worst one-day slump since February.
The European markets slid 2%; the worst sell-off so far this year.
‘The spectre of inflation is the most central cause for concern at the moment, which in turn could lead to interest rate rises earlier than investors had been anticipating’.
The markets rebound (from mid-week) again on US jobless claims boost and as inflation fears eased: the European markets rallied too & the FTSE 100 ended Friday with solid gains.
Inflation fears rise on both sides of the Atlantic
US inflation expectations jumps to the highest level since 2017.
And Eurozone inflation expectations rose to the highest since 2018.
US consumer prices rise at fastest rate since 2008
The 4.2% jump in inflation (in the 12mths to April) is the biggest rise since 2008 and is a significant leap compared with the 2.6% reading in March.
This reflects a combination of government stimulus, supply bottlenecks and increased spending as economic activity picks up (post the rollout of Covid vaccinations).
EU Commission lifts growth forecasts
The European Commission has upgraded its growth forecasts, pointing to progress with Covid-19 vaccinations and a massive public stimulus programme.
It is predicting growth of 4.2% for the EU in 2021, and 4.4% next year. (This compares with its previous estimates in February of 3.7% growth this year and 3.9% in 2022).
Bank of England (BoE) head says that drivers of inflation will not persist
Governor Andrew Bailey is at odds with the bank’s outgoing chief economist warning of price inflation above 2% target.
Chief economist Andrew Haldane used a newspaper article to warn of the need to prevent the ‘inflation genie’ getting out of the bottle.
There is concern that a pick-up in inflation would force central banks to rein in the amount of stimulus they provide which continues to ‘prop up’ businesses and economies around the world (plus the added risk of raising interest rates which are at an all-time low).
Bitcoin & cryptocurrencies
Global news, trends and insights
Tesla does a U-turn and will not accept payment in Bitcoin due to ‘environmental concerns’
Tesla CEO Elon Musk said Wednesday on Twitter that Tesla has ‘suspended vehicle purchases using bitcoin’, out of concern over ‘rapidly increasing use of fossil fuels for bitcoin mining.’
The price of bitcoin dropped about 5% in the first minutes after Musk’s announcement.
In an SEC filing in February, Tesla revealed that it bought $1.5bn worth of bitcoin and it may invest in more of bitcoin or other crypto currencies in the future.
$365bn+ has been wiped off the market’s value following Musk’s decision to halt support for Bitcoin payments.
Internet Computer, a new cryptocurrency launched on Monday
Internet Computer, a cryptocurrency launched Monday by blockchain non-profit Dfinity, is already the eight-largest digital asset with a market cap of $45bn, data from CoinMarketCap showed on Wednesday.
The project, developed by founder Dominic Williams, is a result of five years of research.
The token's promoters claim it can provide the core basis of a new, decentralised internet.
Binance faces probe by US money-laundering and tax sleuths
Binance Holdings Ltd. is under investigation by the Justice Department and Internal Revenue Service, ensnaring the world’s biggest cryptocurrency exchange in U.S. efforts to root out illicit activity that’s thrived in the red-hot but mostly unregulated market.
Bitcoin losses accelerated Thursday after Bloomberg reported the investigation into Binance.
UBS explores offering crypto investments to rich clients
UBS Group is in the early stages of planning to offer wealthy customers digital currency investments, joining U.S firms in seeking to give broader access in response to client demand.
‘We are monitoring the developments in the field of digital assets closely,” UBS said in a statement. “Importantly, we are most interested in the technology which underpins digital assets, namely the distributed ledger technology.’
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
(US) The summer of inflation: will central banks and investors hold their nerve?
A summer burst of inflation was always inevitable once lockdown measures began to ease: a year ago the spread of Covid-19 had crushed economies around the world, sending commodity prices plummeting and even pushing the cost of a barrel of oil in the US below zero.
Central bankers -particularly at the US Federal Reserve - have been at pains to insist the current bout of price rises is temporary and will not push them to an early unwind of the massive monetary stimulus actions they launched.
Those assurances, however, have not deterred a growing number of investors from becoming unnerved that a groundswell of deeper inflationary forces.
A prolonged bout of inflation could hamper the post-pandemic recovery, potentially forcing the Fed and other central banks to quickly tighten its monetary screws ie raise interest rates.
Investors are concerned that they have been left guessing not only how the Fed defines ‘transitory’, but also the specific parameters that motivate a change in policy.
The Fed’s determination to stay the course could also see long-term inflation expectations rise even further — leading to sharper rate rises down the line.
Mohamed El-Erian, chief economic adviser at Allianz and former co-investment chief at bond group Pimco said: ‘The last few years have been great for investors because everything went up — you gained on your equities and your bonds…Now you risk losing money on both sides. It’s a horrible environment, and I’m glad I’m not managing money.’
Companies: winners & losers
Companies to watch and share price movements
Flagship fund ARKK falls more than 35% from February peak
Cathie Wood, the founder of Ark Investment Management LLC now controls $39.7bn in her U.S. exchange-traded funds (ETFs), down from more than $60bn at a peak in February, according to data compiled by Bloomberg.
A huge portion of the loss is due to the value of her holdings dropping sharply, as speculative tech names with soaring valuations and massive runs come back down to earth.
Her flagship ARK Innovation ETF (ARKK) has fallen about 35% from its high.
The mass exodus some had anticipated during a period of underperformance hasn’t yet materialised, with traders pulling just $76m from the fund in April and $301m so far in May, compared to the $7.1bn added in the first three months of the year.
In fact, the firm’s ETFs have still taken in a net $15.3bn so far in 2021. The eight-product lineup -six actively managed funds and two tracking indexes -has roughly only lost a net $800m since the end of February.
Throughout the downturn, Wood has said repeatedly that her strategies haven’t changed and that she invests with a five-year time horizon.
Have You Seen This?
Female-focused news, reports, research, campaigns
Retiring men lifted women to record share of S&P 500 banks boards
Women gained a larger share of board seats last month at five companies in the S&P 500 Banks Index as four men retired or stepped down, and Zions Bancorp expanded its board to include a new female director.
The shift, which increased the average number of women on bank boards to 4.5 from 4.4, highlights a tactic many companies are using to add seats for diverse members when male members depart.
The 32.8% of women on bank boards rose from 32% in March and is the highest since Bloomberg began tracking the ratio in January 2019. That compares with 29.3% for the broader S&P 500 Index.
The alternative to expansion would be to actively manage out directors who aren’t fulfilling their duties, even if they aren’t at retirement age.
Know this: building a gender diverse company & culture is multi-faceted. However, one of the reasons change is slow, is that boards are made up of men of a certain age who are comfortable with the status quo. The data shows that women on boards and in the C-Suite (33% minimum threshold) drive financial performance and business transformation. Slow progress re gender equity on boards continues to limit maximum company performance.
What We’re Tracking
Female and diversity-focused products or services, start-ups and businesses led by women/diverse founders, investment, research.
Global Report: women, cryptocurrency and financial independence
The total number of global cryptocurrency users has surpassed 100m for the first time.
Exchange platform surveys indicate women make up 15-55% of crypto users (depending on the region).
Financial independence seems to be the key driver for women.
Coffee Break? Read This
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
The Purse Ltd. Copyright 2021 & All Rights Reserved.
Share this post