Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #22 weekly newsletter in 2020.
Every week we curate key articles and content so you can stay informed and inspired about money and investing. And we spend hours sifting through content every week so you don’t have to.
We apply a female-lens to news and content about money and investing so that it is more meaningful to you.
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.
“When we take control of our financial future we can live life on our terms”
-Jana Hlistova
Photo: Anna Shvets
From The Purse…
Editorial from the Founder
The UK economy is showing early signs of improvement as the country eases out of lockdown. On Thursday Boris Johnson confirmed plans for a phased reopening of the retail industry and schools.
However according to McKinsey, the management consulting firm, in Europe 60 million jobs are potentially at risk of reductions in hours or pay, temporary furloughs or permanent layoffs. In the UK, unemployment could double during the summer from 2.1 million.
The US is also starting to see hints of recovery: nearly every state has reopened even though the number of coronavirus cases continues to rise in some.
Total unemployment is just under 41 million Americans however new weekly unemployment claims fell 46% from their peak in early April.
The global stock markets continue to rally despite the growing tension between the US and China-which could dampen the recovery of the global economy.
Meanwhile in the UK the number of companies reporting the gender pay gap falls by half due to the pandemic. And according to a report by Citi Bank, women are disproportionately impacted by coronavirus job losses, which could cost the global economy $1 trillion.
The Institute of Fiscal Studies (IFS) has conducted research on how mothers and fathers are balancing work and family under lockdown.
One of the key findings was that ‘the gaps between mothers’ and fathers’ time use are not straightforwardly explained by mothers’ lower employment rates or lower earnings’.
We spotlight what a shake-up in the FTSE 100 means.
And Oprah Winfrey and Katie Perry have invested in a food waste start-up which has raised $250 million.
Check out the money habit of the week and if you have time, watch the Ted talk by economist Marilyn Waring called ‘The unpaid work that GDP ignores-and why it really counts’.
Stay safe, take care of yourself and your loved ones.
I hope you enjoy this week’s newsletter. And until next week!
Jana
The Big Picture
Global markets and economy news, trends and indicators
The Coronavirus Effect:
The UK economy is showing early signs of improvement as the country eases out of lockdown
Job vacancies on the rise: 8.4 million people have been furloughed because of the pandemic. Total vacancies advertised in May is 66,000 compared to 100,000 end of March. Total unemployment is at 2.1 million but could double over the summer months.
Spending downturn eases: in April spending fell 40% but the contraction of spending is half as steep from end of March to 24 May.
Business activity starts to rise: more businesses are trading, with about 81% of companies operating in the two weeks to May 17, up from 75% in the two week to April 5.
Car showrooms and outdoor retail could start to reopen from Monday, with social-distancing measures in place.
Non-essential shops are due to reopen from June 15.
Primary schools in England can start to reopen to more pupils from Monday, covering children in Reception, Year 1 and Year 6.
Groups of six can meet outdoors.
According to McKinsey: 60m jobs across Europe are potentially at risk of reductions in hours or pay, temporary furloughs, or permanent layoffs due to the coronavirus.
The European Central Bank’s (ECB) balance sheet is now equal to 46.7% of Eurozone GDP, the highest ratio on record.
US: hints of recovery start to emerge for the economy
Nearly every state has begun to reopen, even though the number of coronavirus cases continues to rise in some.
The low for the ‘two-month recession’ probably occurred in April, says Douglas Porter, chief economist at BMO Financial Group.
The fastest recoveries have been to clothing and accessories stores which recovered 607% since their April 12 low.
US: total unemployment has risen to just under 41 million Americans
First-time jobless claims totalled 2.1 million last week.
The high jobless numbers persist even as all states have reopened their economies to various extents.
However, new weekly unemployment claims fell 46% from their peak in early April.
‘Fear of missing out’ dominates as investors turn into stock market ‘believers’:
The S&P 500 index of US blue-chip stocks is up more than a third from its low two months ago. On Wednesday, the index closed just 10% below the record high reached in February.
Sceptics worry the market is driven by the Fed reserve stimulus and that investors are overly confident a vaccine will emerge soon.
The Euro Stoxx 600 and FTSE 100 is up by approximately 25%. The Nikkei index of Japanese stocks has gained more than 30% since March 23.
The markets continue to be immune to the global economic impact of the pandemic.
On Friday, the FTSE 100 fell over 2% as concerns over the China and Hong Kong relationship
With China imposing the new national security laws on Hong Kong, the real risk to markets is if Donald Trump moves to act against China and potentially reignites a trade war that could derail the economy.
Oil jumps nearly 90% in May to $35, registering the best month on record
West Texas Intermediate, the U.S. oil benchmark, registered its best month on record after gaining more than 80% in May.
An increase in demand as well as record supply cuts have pushed prices higher.
“It certainly doesn’t feel like it was oil’s best month ever,” said Regina Mayor, KPMG’s global head of energy. “Low $30s for WTI is clearly better than where we were at the end of April, but it’s not sufficient enough to bring the bulk of production back online.”
Looking Ahead in 2020/2021
UK economy faces a longer and slower recovery from the pandemic
Surveys of business activity suggest that the low point for the UK economy probably came in April, with a slight improvement detected in May.
Global stock markets have rallied despite the outlook for jobs and risk to growth.
Companies are bracing themselves for a protracted recovery as lockdown measures are gradually lifted.
The Bank of England (BoE) has warned that GDP could contract 25% in the second quarter: this could be the worst economic slump in three centuries.
Unemployment is set to double over the summer months.
The economy has bottomed and this is not a ‘Depression’.
Significant uncertainty remains with respect to growth trajectory:
Path of recovery
Employment of ‘temporary job losers’
Additional waves of new infections as the economy reopens
Fiscal and monetary policy measures were designed to offset the demand shock and liquidity shock and will not be inflationary
Stagflation is highly unlikely.
The US dollar will not be debased.
We do not recommend gold on a strategic or tactical basis for clients’ investment portfolios.
We do not recommend bitcoin on a strategic or tactical basis for clients’ investment portfolios even though its volatility might lend itself to momentum-oriented traders.
Coronavirus Impact: Your Money
Insights, trends and what this means for you and your money
Companies to Watch: winners & losers
Companies to watch and share price movements
Nationwide profits fall 40% (UK)
Britain’s largest building society Nationwide said profits crashed to £469m in the year to April 4th, from £788m the year previously.
The company had already been seeing pressure on its profits from its investment in technology and payouts for payment protection insurance (PPI) before booking a £101m hit from Covid-19.
Nordstrom sales plunge nearly 40% on pandemic-led closures (US)
Seattle-based Nordstrom said online sales rose 5% to $1.1 billion in its first quarter ended May 2. The retailer has strived to reduce inventory, cut costs and sharpen its marketing strategy.
It reported a net loss of $521 million, or $3.33 per share, compared with a profit of $37 million, or 23 cents per share, a year earlier.
Zscaler shares hit record high after Q3 earnings beat; Department of Defence win boosts gain (US)
Zscaler said its cloud security platform processes more than 100 billion transactions, while blocking 100 million cyber threats, each and every day.
Billings hit $113 million, the company said, and overall revenues surged 40% to $110.5 million.
Zscaler shares were marked 23.6% higher in early trading Friday at just over $12 billion.
Gains for the stock were also boosted by a new cloud security contract with the Defense Innovation Unit, that could ultimately scale to as many as half a million users.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
What does a shake-up in the FTSE 100 mean?
The FTSE 100 is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation.
It is set for the biggest shake-up in 4 years after the impact of the coronavirus wiped out revenue for companies in the travel and aviation industry but boosted the emergency and technology industry.
Easyjet and Carnival are likely to drop out of the FTSE 250: ‘because cruise liners and planes are expensive and often funded by large quantities of debt, costs remain stubbornly high’.
Centrica and Meggitt, whose shares have fallen sharply, after coronavirus hit its civil aerospace division, are also due to drop out of the FTSE 100 based on their market capitalisation.
Technology groups including Homeserve, alongside online gaming group GVC and Convatec which makes medical equipment, are set to replace them in the FTSE 100.
These companies have fared well during the pandemic and are now trading close to where they were before the crisis started.
Have You Seen This?
Female-focused news, reports, research, campaigns
UK: reporting of companies’ gender pay gaps falls during the pandemic:
The UK government removed the requirement for companies to report on their pay gaps due to the pandemic in March.
The number of UK companies reporting on the gender pay gap has halved during the past year (ie approximately to 5,000 vs 10,000 companies).
The 10 FTSE 100 companies with the widest pay gaps all reported gaps of 40 per cent or more.
According to a report by Citi Bank:
More than 220 million women around the globe work in sectors vulnerable to the coronavirus slowdown, and 31 million women could lose their jobs compared to 13 million men.
The loss of 31 million equates to a decline in global GDP of $1 trillion. This represents 1.2 percentage points of the 3.2 percentage point drop in GDP we’re expecting for 2020.
Since women in the workforce are a key generator of global growth, the firm said that looking forward decision makers need to factor this into policy responses.
Study: women with caring responsibilities have a greater risk of poverty
How women are getting squeezed by the pandemic:
“Our formal economy is only possible because it is subsidised by women’s unpaid work.”
Crises amplify existing inequalities, and so across the world women are being affected more severely by the socioeconomic impacts of this pandemic.
This is because in every country women earn less, they save less, they’re more likely to be in precarious jobs with little security or protections if they do work, or in the informal sector, with no protections at all.
But we need women in positions of leadership to ensure that solutions are informed by a diversity of views and experiences. Because if not, we could deepen inequalities.
Institute of Fiscal Studies: how are mothers and fathers balancing work and family under lockdown?
Key findings include:
Compared with fathers, mothers are spending less time on paid work but more time on household responsibilities.
Overall, in 2014/15, the average mother (including those who did not work for pay) was doing nearly 60% of the number of uninterrupted work hours that the average father did; now she is doing only 35%.
The gaps between mothers’ and fathers’ time use are not straightforwardly explained by mothers’ lower employment rates or lower earnings.
Despite doing less childcare than mothers, during lockdown fathers have nearly doubled the time they spend on childcare.
Netflix premieres first ever documentary about black female CEOs
She Did That is the documentary created by filmmaker and blogger Renae L. Bluitt to promote a more accurate representation in the media of Black female business owners.
What We’re Tracking
Female-focused products or services, crowdfunding campaigns, start-ups and businesses led by female entrepreneurs & investment, research
Oprah Winfrey and Katie Perry invest in food waste start-up Apeel Sciences which raises $250m
Apeel Sciences has devised an edible spray-on coating for perishable produce such as avocados, lemons and limes so they stay ripe for twice as long.
Narrative change: VCs are finally ready to talk about menopause
According to Pitchbook data, startups in this space have raised $254 million to date since the start of 2009.
Femtech startups as a whole raised more than $498 million in 2019 alone.
An estimated 1.1 billion women throughout the world will be postmenopausal by 2025, according to the North American Menopause Society.
‘I’ll be doing this for decades’: Arlan Hamilton’s challenging the status quo of VC
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Review your spending, saving and investing habits regularly.
And at least every three months, consider whether you can increase how much you save and invest- even if this is by 1%.
Make it a habit to review your saving and investing rate and adjust accordingly.
If you if you have credit card debt where you pay very high interest, do pay this down as soon as you can. But make sure you have an emergency fund set up.
What We’re Watching
Marilyn Waring advocates for a public policy database that recognises all unpaid work -and the preservations of ecosystems -instead of relying on GDP.
In this TED talk, Marilyn talks about unpaid work that GDP ignore and why it really counts.
Coffee Break? Read This
Many workers would prefer to work from home at least for some of the time
Shortlist announced for the 2020 women in software power list
Karolina Pliskova says male players who complain about equal prize money are ‘super weak’
We’d love to hear from you. Do you have feedback? Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
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