Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #37 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.
“For women who are taking control of their financial future”
-Jana Hlistova
From The Purse…
Editorial from the Founder
The combined balance sheet of the US Federal Reserve, the Bank of Japan and the European Central Bank has hit an all-time high at $21.3tn, which is equal to the US GDP.
The US Federal Reserve has signalled that interest rates will not increase until 2023.
Meanwhile the Bank of England (BoE) will keep interest rates at 0.1%, although economists expect rates to fall to -0.5% if Britain fails to strike a trade deal with the EU.
UK’s inflation fell to 0.2% in August (down from 1% in July), due to the government driven Eat Out Help Out scheme, which reduced the cost of living for consumers.
UK redundancies are on the rise, but UK Chancellor Rishi Sunak has signalled further job support after the furlough scheme ends in October.
The combined market cap of FANGMAN (including Facebook, Apple and Microsoft) has declined $1.4tn since the beginning of September.
Christine Lagarde, the President for the European Central Bank, has said that women face greater risk of inequality because of the coronavirus.
Women challenging the state pension age rise have been defeated in the Court of Appeal.
And why has Covid changed the conversation about money for women?
We spotlight why the BoE is considering negative interest rates and in the Have You Seen This? section we highlight how the BBC is closing the gender pay gap.
We’re tracking Chip, the UK startup which is building the world’s best savings app and is currently crowdfunding.
Don’t forget to listen to The Purse Podcast where I interview Katie Donovan, a leading pay equity specialist in the US, about closing the gender pay gap, how to negotiate for more pay and what this means for your money.
And finally we dedicate this edition of The Purse to Ruth Bader Ginsberg (RBG), the history-making jurist, feminist icon and national treasure, who died Friday 18 September. She has been a personal inspiration to me for many years.
We honour her work, the legacy she leaves behind and how she made the world better for women.
Read more here and here or watch a fascinating conversation with Ruth at the University of Chicago filmed in September 2019.
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:
The combined balance sheet of the US Federal Reserve, Bank of Japan and European Central Bank has hit an all-time high at $21.3tn, which is equal to the US GDP.
This means that paper money continues to be devalued, which may not be reflected in consumer prices but in assets.
The US Federal Reserve has signalled no interest rate increase until 2023
Policy will not be tightened until inflation achieves 2%+ target.
US retail sales lost steam in August;
Retail sales increased by 0.6% (from July) vs the expected 1% increase.
Expiration of government stimulation measures could be undermining economic recovery.
However, overall retail sales are up 2.6% from August 2019.
US unemployment claims are lower than expected
Jobless claims 860,000 vs 870,000 (expected) last week.
Continuing claims fell by more than 900,000 to 12.63m.
The Bank of England (BoE) will keep interest rates at 0.1% (for now)
Economists expect rates to fall to -0.5% if Britain fails to strike a trade deal with the EU.
UK’s inflation fell to in 0.2% in August (down from 1% in July)
This is the lowest UK inflation since 2015
Driven by the government’s Eat Out Help Out Scheme, which reduced the cost of living for consumers.
UK redundancies rise, as unemployment hits 4.1% (May-July)
The number of employees in the UK on payrolls was down around 695,000 in August, compared with March 2020.
More than 5m people are still furloughed.
UK Chancellor, Rishi Sunak signals further job support
The furlough scheme ends October and further government support is likely.
700,000 jobs have been shed due to the coronavirus.
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
World economy seen to be withstanding virus better than forecast
The world economy will shrink by only 4.5% this year; this is less than the 6% forecast in June.
The UK will still contract more than 10% this year and only gain about 8% in 2021.
Goldman Sachs boosts its 3-month stock forecast to ‘overweight’, cites strong profit growth recovery
Goldman Sachs is forecasting ‘high single digital returns’ for global stocks over the next year.
The most important ‘catalyst’ to lower near term risk, is when and how a vaccine will be deployed.
In OECD countries, the gender wage gap is still 13%.
Women are working more but are still under-represented in management positions.
The coronavirus crisis has made the situation worse for women.
Women make up almost 70% of the healthcare workforce; they are at greater risk from a health perspective.
As in every economic crisis, they are at greater risk of losing their jobs or of having their wages cut.
Your Money
Insights, trends and what this means for you and your purse
UK: Women challenging state pension age rise defeated in Court of Appeal.
Many women born in the 1950s believe they were robbed of their state pension when the government introduced the changes to the state pension age (SPA) from 60 to 65, and then 66 in line with men, noting that it was ‘unlawful’ and ‘unfair’. Around 3.8 million women born in the 1950s have been impacted.
US: How Covid has altered the conversation about money (for women).
Women who have let their husbands deal with money matters can no longer bury their heads in the sand.
Here are 5 important questions to ask your spouse, according to the financial planner Michelle Smith of Source Financial Advisors:
How are assets titled and what is, and isn’t, in joint accounts? This is especially important for access in case of prolonged illness or death.
Where are all the important documents? Do I have access and login information for all accounts, such as savings, investments, retirement, marital assets and trusts?
Do I have enough funds in my own name to get through six months of my family’s total overhead expenses, like housing, taxes and personal expenses?
Am I the owner or beneficiary of my husband’s life insurance policy? If the policy is owned by a trust, do I know who the trustees are or if I am a beneficiary of the trust?
What is my legal or emotional recourse if my husband refuses to share information? (The quick answer: no recourse, unless you file for divorce, which compels financial discovery.)
Companies: winners & losers
Companies to watch and share price movements
FANGMAN has lost $1.4tn in market cap since the beginning of September:
Apple is down 22% from highs
Netflix is down 18.3%
Amazon is down 16.8%
Kodak soars 84% (Wednesday) after special committee it hired finds no violations of law
Kodak received a $765m loan from the US government.
The special report said that the Kodak executives did not violate the US insider trading laws.
Shares of Kodak soared more than 2000% in July after the camera company announced it won a loan from the government to begin producing pharmaceuticals.
UK tech giant ARM Holdings to be sold to US company Nvidia in $40bn deal
One of UK’s most successful tech companies Arm Holdings is being sold by its Japanese owners for £31bn ($40bn).
Nvidia, a US company, will pay SoftBank $21.5bn in shares and $12bn in cash for the chip designer.
The deal is still subject to regulatory approval in the UK and could face opposition.
The deal will see SoftBank and the $100bn Vision Fund, which has a 25% stake in Arm, take a stake in Nvidia of between 6.7% and 8.1%.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
Why is the Bank of England considering negative interest rates?
Central banks have tools they can use to stimulate the economy. They can print money, issue bonds and cut (or increase) interest rates.
The Bank of England (BoE) interest rate is currently at a historic low ie at 0.1%.
In theory, negative interest rates encourage banks to lend money (rather than deposit it), and businesses to borrow money which spurs the economy.
For consumers, it could mean a cheaper mortgage or lower credit card fees. And this implies they have more money to spend.
But economists can’t agree on whether negative interests are effective.
In Japan, interest rates have been below zero for four years, and their economy has remained sluggish.
It may actually be unprofitable for banks to lend and savers do not get a good return their money.
The rising Covid infections and a lack of clarity over Britain’s trade relationship with the EU could threaten economic recovery. And the BoE may need to use less conventional methods, like introducing negative interest rates, to spur the economy on.
Have You Seen This?
Female-focused news, reports, research, campaigns
Closing the gender pay gap at the BBC
Match of the Day host Gary Lineker was the highest-earning star with an unchanged salary of £1.75m in the 2019/20 financial year. But he has signed a new contract with a 23% cut.
Zoe Ball, the Radio 2 presenter, has seen her pay rise by £1m since taking over the breakfast show in 2019.
Fiona Bruce and Lauren Laverne have also moved into the top 10 of the highest-paid stars, which features four women for the first time. Vanessa Feltz is also among the top earners.
The report also showed 12.3% of BBC leaders were BAME, below its 15% target for 2020.
The overall gender pay gap at the BBC has fallen from 6.7% to 6.2%. Previous director general Tony Hall had pledged to close the gender pay gap by 2020.
Know this: in 2019 the gender pay gap was 17.3% in the UK, which means that on average, women were paid approximately 83p for every £1 men were paid. The pay gap is largest for those 40years+. The financial services industry has the largest gender pay gap. And the gender pay gap is bigger the more senior the role or position. It is estimated that women lose out on between £250,000 to a £1m+ in their lifetime.
What We’re Tracking
Female-focused products or services, start-ups and businesses led by women, investment, crowdfunding campaigns and research.
Chip (UK): is building the world’s best savings app. And they have launched a crowdfunding campaign on Crowdcube. It is now raising its biggest investment round to date.
Key facts include:
250,000 savers across the UK
Deposits up 110% over the last 12 months
Market leading FSCS eligible interest rates
Full FCA authorisation
NB: this is for informational purposes only.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Compare your expenditure in the year 2020 to 2019.
What are you saving money on? What are spending more money on?
How much money do you have left over (if any?) every week, every month?
If you have left over money, what are you doing with it?
Have you considered increasing how much you put towards your pension or your stocks & shares ISA?
Research online investment platforms and mobile apps which allow you to invest small amounts on a regular basis.
Keep learning and stay engaged.
What We’re Watching
We honour Ruth Bader Ginsberg who died Friday, 18 September 2020.
She was an American jurist who was an associate justice of the Supreme Court of the United States from 1993 until her death in 2020.
She was nominated by President Bill Clinton and was generally viewed as belonging to the liberal wing of the Court.
Ruth was the second woman to serve on the U.S. Supreme Court, after Sandra Day O'Connor. During her tenure Ruth wrote notable majority opinions, including United States v. Virginia (1996), Olmstead v. L.C. (1999), and Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc. (2000).
Ruth spent much of her legal career as an advocate for gender equality and women's rights, winning many arguments before the Supreme Court. (Source: Wikipedia)
Watch this conversation with Ruth at the University of Chicago:
Coffee Break? Read This
Coronavirus: lockdown ‘blessing’ for women setting up business
Women are drowning in unpaid labour at home. Don’t make them do it at work
Reopening UK offices is risks excluding women and minorities, says business chief
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 2020 & All Rights Reserved.
Share this post