Welcome to our #54 weekly newsletter.
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 2021 during Covid-19 and beyond.
If you’re short on time, listen to the 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 ‘Reddit Army’ has destroyed $3.7tn in global market cap this week (this is equal to the GDP of Germany). The hedge fund short squeeze has a knock-on effect: many had to sell their long positions to fund their losses.
GameStop shares surged 1,500%+ in January as a horde of retail investors bid up shares and cheered each other on in Reddit forums like WallStreetBets. It is estimated that GameStop short-sellers have lost more than $19 billion+ this year.
Read more about the ‘Reddit Army’ and what short-selling is.
The US Federal Reserve has said that they will hold interest rates close to zero and they continue to print money in order to support the US economy.
The International Monetary Fund (IMF) has downgraded the forecast for UK recovery to 4.5% (from 5.9%), whilst global recovery will be stronger.
And UK unemployment rises to 5%.
Meanwhile, Ether, (ETH), the digital token of the Ethereum blockchain, hit a new all-time high of $1,476 (early Monday morning).
Data reveals that hedge funds are increasing their bitcoin short positions.
And Elon Musk and Ray Dalio have signalled strong support for bitcoin.
Institutional support for cryptocurrencies continues: Visa, the payments giant, may add cryptocurrencies to its payments network.
In the Your Money section, read about what Covid has really done to your money.
And in the UK, personal savings has hit £1.5tn for the first time.
And according to survey in the UK, 40% of women are crypto investors.
We are tracking Powered Brands (in the US), a special purpose acquisition company, or SPAC, priced earlier this month on the Nasdaq, under the ticker “POWRU,” with the goal of creating a new kind of global conglomerate made up of sustainable and digitally focused beauty brands.
It is founded by serial entrepreneur Katherine Power and Dana Settle, founding partner at venture capital firm Greycroft.
And don’t forget to listen to The Purse Podcast interview with Vicky Pryce.
Vicky Pryce is Chief Economic Adviser and a board member at the Centre for Economics and Business Research (CEBR). And she is also the author of Women vs Capitalism.
We talk about Brexit & Covid-19 and the impact on women. We cover topics including the gender pay gap, flexible working, the role women entrepreneurs play in driving growth and prosperity, why government intervention is needed and women can do.
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 Reddit' Army’ has destroyed $3.7tn in global market cap this week (equal to the GDP of Germany)
The hedge fund short squeeze has a knock-on effect: many had to sell their long positions to fund their losses
GameStop shares surged 1,500%+ in January as a horde of retail investors bid up shares and cheered each other on in Reddit forums like WallStreetBets.
GameStop short-sellers have lost more than $19 billion+ in the year.
(Read more: the Reddit army which is crushing Wall Street)
(Read more: What is short-selling, why it’s risky and how the ‘squeeze’ happens)
The Fed described a weakening of the US economy, due to the recent wave of coronavirus infections.
According to Mr Powell, the Fed Chairman: ‘We have not won this yet’.
IMF downgrades forecast for UK recovery (while global recovery will be stronger)
The International Monetary Fund (IMF) has forecast that:
UK’s national income (or GDP) would expand by 4.5% this year (versus 5.9% growth forecast made last October).
UK unemployment rises to a 4 year high
UK’s unemployment rate rose to 5% (in the three months to November).
This is up from 4.9%.
Bitcoin & cryptocurrencies
Global news, trends and insights
Ether hits an all-time-high (again)
Ether, the digital token of the Ethereum blockchain, hit a new all-time high of $1,476 (early Monday morning).
Cathie Wood: Bitcoin ETF approval unlikely until market cap reaches $2trn
Ark Investment Management CEO Cathie Wood said:
‘The flood of demand has to be satisfied so it’s going to have to get well over a trillion dollars – $2 trillion, I think, before the [U.S. Securities and Exchange Commission] will feel comfortable about’.
Bitcoin’s market cap is approximately $627bn.
Data reveals that hedge funds are increasing their bitcoin short positions
According to data from crypto news and analysis company The Block, hedge funds are short bitcoin to the tune of more than $1 billion, even as retail traders pile into bitcoin and other cryptocurrencies.
Hedge funds increasingly bet against the bitcoin price, to some extent covering their long positions.
Meanwhile this could spur retail investors to bitcoin and other crypto.
(On Monday) Marathon Patent Group announced their purchase of 4,812.66 BTC valued at a total $150m
On Friday, Elon Musk signalled his support for bitcoin
Future Focus
Keeping an eye on key predictions, innovations and what’s going to impact the future
Visa may add cryptocurrencies to its payments network, says CEO
Visa CEO Al Kelly said the payments giant is in a position to make cryptocurrencies more ‘safe, useful and applicable’.
Kelly said: ‘Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their Visa credentials or to cash out onto our Visa credential to make a fiat purchase at any of the 70 million merchants where Visa is accepted globally…’.
Sustainable investing may be the breakout star of 2021
Most big investors now believe sustainable investing is good risk management, leveraging the practice to help manage risk in uncertain times.…It turns out that companies that manage sustainable risks better, manage other risks better as well.
Read Larry Fink’s letter to CEOs with a clear emphasis on sustainability, diversity, equity and inclusion.
Ray Dalio calls Bitcoin ‘one hell of an invention’
Bridgewater Associates founder Ray Dalio is considering cryptocurrencies as investments for new funds offering clients protection against the debasement of fiat money.
Companies: winners & losers
Companies to watch and share price movements
GameStop rallies 1,500%+ in January amid huge losses for Melvin Capital & Citron
After weeks of unrelenting gains for GameStop shares, Reddit traders seem to have beaten Wall Street.
Melvin Capital and Citron were identified as their primary antagonists early in the rally, hoping to profit by forcing shorts to cover their bets.
GameStop shares have surged by more than 1,500%+ in January as a horde of retail investors bid up shares and cheered each other on in Reddit forums like WallStreetBets.
While other Reddit-fuelled rallies died off in a matter of days, GameStop's climb has gained momentum.
GameStop short-sellers have lost more than $19 billion in the year to date.
Rolls-Royce is facing £2bn cash reserve hit as flight numbers fall
Rolls-Royce, whose engines power many Boeing and Airbus aircraft, said it expected flying hours for this year to be 55% of those seen in 2019, which was down from its previous estimate of 70%.
The company has already announced plans to sell assets worth billions of pounds. It is also cutting more than £1bn in costs by axing 9,000 jobs and closing factories.
The company has about £9bn it can draw upon and therefore was ‘confident that despite the more challenging near-term market conditions we are well-positioned for the future.’
On Monday, the news sent shares in the company down as much as 9% in early London trading.
Your Money
Insights, trends and what this means for you and your purse
UK personal savings hit £1.5tn for the first time
Money saved through reduced spending on holidays, commuting and dining out has allowed UK savers to add £98bn – 7% – to their bank accounts and cash ISAs since March 2020.
What Covid has really done to your money
This week the Office for National Statistics released details of its own deep dive into our personal and financial wellbeing to 20 December:
It confirmed that women, renters and, somewhat more unexpectedly, 30-59-year-olds, were hit especially hard.
Its figures showed that if these groups were already in debt, they were more likely to take out further borrowing, that they would borrow more, that they were more likely to be struggling with their bills.
Have You Seen This?
Female-focused news, reports, research, campaigns
40% of crypto investors are women (survey)
The Gemini Exchange has published a trends report.
The exchange had surveyed about 2,000 random residents in the U.K in the fourth quarter of 2020.
13.5% of respondents were past or present crypto investors.
(Of that number) an impressive 41.5% are women.
However, men hold more cryptocurrency than women in categories exceeding £10,000 ($13,694)— 65.8% of investors (in that range) were found to be male.
Women make up 53.4% of investors holding between £1,000 and £5,000 ($1,369 and $6,847).
Know this: online investment platforms make it easier to invest. Based on data, more women invested in the stock market back in March 2020, when it slumped due to Covid-19. And this trend is also reflected in the cryptocurrency market. It is worth noting that women are investing smaller amounts of money. However, it is better to start small (learn as you go), then not to invest at all.
What We’re Tracking
Female and diversity-focused products or services, start-ups and businesses led by women/diverse founders, investment, crowdfunding campaigns and research.
Powered Brands (US):- founded by serial entrepreneur Katherine Power and Dana Settle, founding partner at venture capital firm Greycroft.
A special purpose acquisition company, or SPAC, called Powered Brands priced earlier this month on the Nasdaq, under the ticker “POWRU,” with the goal of creating a new kind of global conglomerate made up of sustainable and digitally focused beauty brands.
Following a successful public debut, Powered Brands says it’s aiming to acquire between $800 million and $1.5 billion worth of assets.
The U.S. prestige beauty industry generated $18.8 billion in sales during 2019, according to market researcher The NPD Group.
“Historically, there haven’t been a lot of beauty companies that have gone public or have chosen to take that path. And it’s typically because they get bought up by a strategic before that happens.”
SPACs are companies with no commercial operations that are established solely to raise capital from investors for the purpose of acquiring one or more operating businesses. Investors in SPACs can range from well-known private equity funds to the general public.
Coffee Break? Read This
Estonia gets new cabinet with women in almost half of the top jobs
The GameStop mania driven by Reddit traders isn’t simple market trolling.
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.
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