Weekly newsletter for women who want to be smart about money

Financial news, personal finance and investing

Jana Hlistova

Nov 10, 2019

The Big Picture

Global markets and economy news, trends and indicators

The US and China trade deal is still to be agreed: a phase-one deal negotiations are ongoing although it is unclear when this deal will be signed. China has asked President Trump to lift more tariffs worth $125bn on China’s goods imposed in September as part of the phase-one trade deal. But Friday morning Trump said that he did not agree to rolling back existing tariffs. The two sides are in the process of deciding on the location for signing the phase-one trade deal after the initial meeting mid-November was cancelled. (Source: CNBC, FT)
The US stock market has hit record highs this week which means that Wall Street investors are selling bonds and buying equities (shares) again. However investors continue to be cautious due to slowing growth in the global economy. The underlying sentiment is that the global economy is on a knife edge. (Source: FT)
Study claims that the Bitcoin surge in 2017 was fuelled by manipulation. According to a Texas University Professor the Bitcoin price was sent higher by a digital token called Tether on the Bitfinex crypto exchange. (Source: Bloomberg)
The biggest risks to the financial markets in 2020: Deutsche Bank’s chief economist, Torsten Slok shared a list of the 20 risks to the economy and markets next year. The list includes (US focus): (Source: CNBC)
- Continued increase in wealth inequality, income inequality, and healthcare inequality.
- Phase one trade deal remains unsigned, continued uncertainty about what comes after phase one.
- Trade war continues to weigh on corporate capex decisions.
- More negative-yielding debt sends global investors on renewed hunt for yield in US credit.
- Brexit uncertainty persists.
According to Ray Dalio, American billionaire, hedge fund manager, and philanthropist, the American capitalist system is broken. He published a linkedin post this week where he explains why: (Source: Linkedin)
- the value of financial assets have gone up whilst future expected returns have gone away and the economy and inflation remains sluggish
- large government debt exists and will continue to increase substantially
- at the same time pensions and healthcare liability payments will be due and are unlikely to be met causing the wealth gap to get bigger
- and money is free for those with creditworthiness leading to more ‘wealth, opportunity and political gaps’.
This is why Dalio argues that we are coming up to a big paradigm shift.
What’s New This Week?
UK news: the economy, business, personal finance, investing.

Report by the Treasury’s economic forecaster blocked: The Cabinet Office has blocked the publication of a report expected to show the decline in the UK’s public finances over the last 8 months. The impact was expected to show Britain’s annual deficit has increased by approximately £12bn.
Women’s wages on the rise: According to the Institute of Fiscal Studies (IFS), women’s wages are increasing whilst men are earning 12% less than they did ten years ago. London is the hardest hit region with men’s average earnings down 8%. As women stay in the workplace longer, work full-time and move up the corporate ladder, they earn more.
Back to the 1970s? Government spending is likely to hit 1970s levels whichever party wins the General Election on 12 December. The think tank Resolution Foundation said that both the Conservative and Labour Party plan to increase the size of the state (estimated at 41.3%-43.3% as a share of GDP). However it remains unclear how this will be paid for. As women have been disproportionately hit by the UK government’s austerity policies, these are welcome news.
Mothercare closes down: Britain’s biggest childrenswear chain has collapsed into administration putting 2,500 jobs at risk with all 79 stores set to close.
The General Election and personal finances: who voters choose to vote in on 12 December will have a significant impact on the nation’s finances beyond the economic ramifications of if, how and when Britain leaves the EU.
In debt? Average household non-mortgage debt in the UK has risen to £14,000 with increasing reliance on credit cards, bank loans and payday lending. According to the Office of National Statistics, the median weekly earnings in April this year was still £20 below where they were when the UK entered the 2008 recession.
Payday lenders close down: three of the biggest payday lenders have collapsed recently. According to the City regulator 78% of adults have borrowed through credit or a loan at some point during the previous year.
Tax loophole: Over 9000 wealthy professionals in the UK use companies and partnerships to lower their capital gains tax. They were able to collect over £1m each in capital gains tax (paying a tax rate as low as 10%).

Have You Seen This?

Female-focused news, reports, research, campaigns.

Now Pensions Report on the gender pension gap: Did you know that women’s average pension is £51,100 vs men’s average pension £156,100 (by their 60s). And currently there are 50% more women than men heading for retirement without a pension savings at all.
Female breadwinners and financial distress: the number of female breadwinners has increased by a third since last year but according to research they are less likely to seek protection against redundancy, illness or other causes. This exposes women and their family to financial distress which can be prevented.
Female entrepreneurs: according to a study female entrepreneurs have much less equity in their start-ups than their male peers.

What We’re Tracking

Female-focused products or services, crowdfunding campaigns, start-ups led by female entrepreneurs & investment, research.

US: Professional network for women Elpha raises funding.
Australia: Crowdfunding creches at work: why these friends build a female flexible workplace.
UK: A safe place for women to talk frankly: how a meet-up app for mothers was born.
US: How Harbinger Ventures is bringing female DNA to VC starting with tampons.
UK: Oval Money, a finance app for users to track their spending, savings and investments, with Benedetta Arese Lucini as CEO, is crowdfunding. (Disclaimer: this is for information purposes only)

We’re Applauding

Female role model in politics, finance, business, money, or investment

We’re big supporters of Jo Swinson not least because she’s fighting hard to get a ‘seat at the table’. ITV and the BBC has scheduled a general election debate on 19 November and 6 December respectively between Boris Johnson and Jeremy Corbyn and Jo Swinson, the leader of the Liberal Democrats, has not been invited. The Liberal Democrat Party is now in discussions with lawyers over ‘court action’. You can show your support by signing a petition here.

Caught Our Eye

New digital tools and cool stuff

Freetrade: We stumbled across this mobile app which allows you to invest in stocks and funds commission-free from your phone. You can invest using your ISA (Individual Savings Account) so that you do not pay tax on the gains or profit you make from your investments. (Disclaimer: this is for information purposes only)

What We’re Watching or Reading

We’re big fans of Ray Dalio, the founder of Bridgewater Associates. Check out his book called Principles on life and work and his more recent book Principles of Navigating Big Debt Crises.
And if you want to get a better understanding about how the economy works, he explains it really well in the video below:

Money Habit of the Week:

Do you have a money habit you would like to share with us? Tweet @jointhepurse

“Spend 5minutes every single morning reviewing your expenditure, current accounts and investments and make any necessary adjustments” Jenny from London

Coffee Break? Read This:

We’d love to hear from you. Do you have feedback? Have we missed anything? What would you like to see more of? Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.

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