Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #39 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
On Friday, stocks fell and the US dollar climbed as Donald Trump tested positive for Covid-19. The market move reflected investors’ concern about whether the US President would be incapacitated and how long for.
The European Central Bank (ECB) is likely to follow in the US Federal Reserve’s footsteps, as they will consider inflation to exceed its 2% target. The Eurozone is currently experiencing deflation at -0.3%.
The pace of US jobs growth has slowed in September, however the US unemployment rate fell to 7.9%.
The British pound fell after the EU launched legal action against the UK for infringing the Brexit withdrawal deal.
And the UK’s economy record contraction in Q2 has been revised to 19.8% vs the forecast 20.4%. However the UK still experienced the worst slump (compared to other major economies).
In the Future Focus section, the Bank of America has issued a $2bn bond which aims to curb America’s race inequality.
The pandemic may leave a permanent mark on European dividends.
And Twitter CEO, Jack Dorsey has said that Bitcoin and the blockchain is the future. We think so too.
A whole new generation of personal finance experts are changing the rules for managing your money today.
And we Spotlight how the coronavirus is a threat to the European pensions industry.
In the Have You Seen This section, we highlight a new report by McKinsey & Co called Women in the Workplace 2020: read about why the pandemic can set women back half a decade and what needs to change.
We’re tracking the Content Catalyst Fund (CCF) based in Canada: it’s a new development and funding company focused on content developed, delivered and designed by women and about women. We love this!
Read our money habits of the week.
And if you have time, watch the TED talk about what makes a good life.
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:
On Friday, stocks fell and the US Dollar climbed as Donald Trump tests positive (for Covid-19)
European and US futures fell sharply.
S&P 500 future -1.0%.
The market move is more about the US President becoming incapacitated.
The European Central Bank (ECB) to consider inflation to exceed target
This follows in the US Fed’s footsteps.
Eurozone inflation drops to -0.3% (slow price growth).
Letting inflation rise will help to keep rates lower for longer.
Pace of US jobs growth slowed in September
The US economy added 661,000 jobs last month
Unemployment fell to 7.9%
(Since the WWII no US President has gone into an election with higher unemployment rate than Trump).
The EU launched legal action against the UK; the pound fell
It first fell after the EU launched legal proceedings against the UK for infringing the Brexit withdrawal deal.
It later rallied after ‘positive’ Brexit free trade talks.
The UK economy’s record contraction in Q2:
Actual 19.8% vs forecast 20.4%
The Office for National Statistics (ONS) revised the Q2 figure.
However the UK still experienced the worst slump (compared to other major economies).
More than one third of UK employers to make staff redundant
According to research by YouGov, 60% of managers in larger businesses will make redundancies this year.
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
Bank of America issues $2bn bond which aims to curb America’s race inequality
This is the company’s 8th environmental, social and governance-themed bond. It’s total issuance in the category is almost $10 billion.
“This has the potential to help Black and Latino communities through activities such as mortgage lending, financing for businesses and medical practices, and equity investments, with some proceeds going toward renewable-energy and clean-transportation projects”.
September’s global green-bond issuance has already exceeded $30 billion, beating the prior record of $26 billion, set in November 2018.
The pandemic may leave a permanent mark on European dividends
The impact will be even greater on markets such as the U.K., as it heavily relies on dividend-rich industries such as banks and big oil.
This crisis has accelerated structural pressures. And the UK has over-exposure in these sectors.
Twitter CEO, Jack Dorsey says that Bitcoin and Blockchain are the future
Your Money
Insights, trends and what this means for you and your purse
Personal finance experts: new rules for managing your money today
Erin Lowry:
create a ‘bare-essentials’ budget.
your emergency fund should cover 1 year’s worth of expenses (but 6 months is still reasonable).
Monika Halan:
60 is the new 40; plan to earn well beyond 60 years of age.
asset allocation is the most important part of getting your financial planning right.
Sam Dogen:
we need to be saving more for retirement, withdrawing less in retirement, or plan to make supplemental retirement income.
Scott Pape:
avoid buy-now-pay-later services.
financial planning is key.
Companies: winners & losers
Companies to watch and share price movements
Bayer drops more than10%, the steepest drop since March
The German group warned that the coronavirus pandemic would hit profits harder than expected, particularly at its ill-fated Monsanto acquisition.
Bayer will take a several billion euro writedown of assets in its agricultural business (most of which was bought from Monsanto for $63bn in 2018).
Bayer reported a net loss of €9.5bn for the second quarter of the year, largely due to setting aside €12.5bn to settle a series of legal challenges.
The company said it would cut €1.5bn of costs in 2024, on top of the already announced €2.6bn from 2022, and potentially cut more jobs (in order to meet its long-term profitability objectives).
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
How is the Coronavirus a threat to Europe’s pension industry?
Big increases in unemployment will shrink tax revenues which fund state pensions. Contributions made by employers and individuals will also go down.
Cuts to interest rates and new government-backed bond buying programmes have reduced what income pension funds can earn.
According to research by Better Finance (before the pandemic), a 50:50 equity/bond tracker fund has outperformed the vast majority of pension products (for 18 European countries, for up to 20 years).
There are concerns that older unemployed workers will raid their pension early and (by implication) will have less or no money left to retire on.
Note from The Purse: it is important to be well-informed and proactive when it comes to your money and building your net worth. Interest rates are low, inflation is likely to go up (above the 2% target) and it’s crucial that you plan for how to protect the value of your money and investments. On a very simple level, ensure your money is getting at least a 2% return (although UK inflation in August was 0.2% and is -0.3 in the eurozone, we are likely to see this start to rise over the coming months).
Have You Seen This?
Female-focused news, reports, research, campaigns
US: McKinsey & Co: Women in the Workplace 2020 report published
The Covid-19 crisis could set women back half a decade.
Companies are stepping up but many are not addressing the underlying causes of stress and burnout.
Covid could push many mothers out of the workplace.
Companies are at risk of losing women in leadership.
Black women are less likely to feel supported during Covid 19.
What’s the path forward?
Make work more sustainable
Reset norms around flexibility
Take a close look at performance reviews
Take steps to minimise gender bias
Adjust policies and programs to better support employees
Strengthen employee communication
Download the full report here.
Know this: globally women have faired worse than men during the pandemic crisis. Not only have more women been made redundant (and furloughed), women have had to bear the brunt of all household responsibilities, childcare and homeschooling. Research suggests that women feel less listened to or supported in the workplace. Outdated working practices continue to put more pressure on women as they work the ‘double shift’. Seek out employers who allow you to work flexibly and on your terms. Smaller businesses tend to be more open-minded, however larger employers who have forwarded-thinking policies are also worth exploring. Ask the difficult questions during the interview process and you will avoid nasty surprises later on.
What We’re Tracking
Female-focused products or services, start-ups and businesses led by women, investment, crowdfunding campaigns and research.
Content Catalyst Fund (Canada)-founded by Julie Bristow, the former CEO and president of Canada-based prodco Bristow Global Media (BGM), CCF is a new development and funding company focused on content developed, delivered and designed by women and about women. (We love this!)
CCF has been founded with the aim of supporting storytelling from a female perspective. It will develop and invest in unscripted and scripted content.
The CCF has been seeded by Julie Bristow, along with “a small circle of like-minded investors”.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Read up about investing in sustainable or impact bonds.
Consider how you can invest via a stocks & shares ISA (in the UK).
Until recently bonds have been a relatively untapped opportunity for sustainable finance.
Bonds represent a loan made by an investor to borrower, for a return, over a specific period of time. They can be issued by governments or by companies.
Study up on the various ways you can invest in sustainable bonds online.
Keep learning and stay engaged.
What We’re Watching
Robert Waldinger is the Director of Harvard Study of Adult Development, one of the most comprehensive longitudinal studies in history.
Watch the TED talk about what makes a good life? As the director of a 75-year-old study on adult development, Waldinger has access to data on true happiness and satisfaction. In this talk, Robert Waldinger shares three important lessons learned from the study as well as some practical wisdom on how to build a fulfilling, long life.
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.
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