Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #24 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 money matters into our own hands, we can live life on our terms”
-Jana Hlistova
Source: Anna Shvets
From The Purse…
Editorial from the Founder
UK GDP has declined by 25.1% in the first half of this year and it is expected that the UK will suffer the worst damage from Covid-19 of any country in the developed world.
The Bank of England (BoE) has predicted that the UK would experience the worst recession in 300 years and it also forecast a relatively rapid recovery.
So whilst the UK economy is expected to fall by 14% in 2020, it is predicted to recover by 15% in 2021. Therefore the economic damage is expected to be 1.5% of GDP.
The Bank of England (BoE) has reinforced the message that they are ready to take more action to support the UK economy. It is expected that they will announce at least £100bn in bond-buying this week.
Meanwhile the Federal Reserve made a ‘dire’ assessment of the US economy and its prospects of the years ahead which has rattled investors.
The global stock markets lost $2.8trn market cap last week: investors are also concerned about a coronavirus ‘second wave’ and Trump’s poor poll numbers.
In the ‘Companies to Watch’ section, AstraZeneca is eyeing up Gilead, the Zara owner is set to close 1200 fashion shops and Just Eat has acquired Grubhub for $7.3bn to become the biggest food delivery service outside of China.
Read about why quickie divorces in the UK may present a long-term risk for women and how the pandemic is affecting women entrepreneurs at work and at home.
And we’re tracking Serena Williams’ venture fund called Serena Ventures which invests in minority and female-led start-ups which are socially responsible.
Stay safe, look after yourself 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:
UK GDP posts a record 20.4% decline in April as UK economy suffers a total lockdown decline of 25.1%, losing 18 years of output.
Germany’s economy, the largest in Europe, is expected to contract by 6.6% this year while Spain’s GDP is seen falling by 11.1%, Italy’s by 11.3 and France’s by 11.4%. The US, the world’s largest economy, is forecast to take a hit of 7.3%.
It is expected that the UK will suffer the worst damage from the Covid-19 crisis of any country in the developed world.
The Bank of England (BoE) has predicted that Britain will face the worst recession in 300 years. However, the BoE predicts a relatively rapid recovery in the second half of 2020. Whilst the economy is expected to fall 14% in 2020, it is predicted to recover by 15% in 2021. Therefore they predict the economic damage to be 1.5% of GDP.
More than half UK customers (surveyed by EY the accountancy firm) expect to now go shopping less. See the report here.
The Bank of England (BoE) is ready to take more action to support the UK economy.
The BoE is expected to announce an expansion of at least £100bn in its bond-buying when the Monetary Policy Committee meets next week.
The Nasdaq hit 10,000 for the first time ever and closes a record high as Apple and Amazon soar
The Nasdaq has led the US indexes in recovering from the coronavirus-induced market meltdown. It’s the first index to erase the year to date losses and the first to surpass its February high.
The Fed officials estimated that by 2022 the US will be facing 5.5% unemployment (far higher than pre-coronavirus)
Core inflation will be 1.7%, still below the 2% inflation target.
Interest rates will be close to zero through to the end of 2022.
Powell also suggested that there is a greater likelihood that the Fed would further action to bolster the economy despite the unhealthy spike in the financial markets.
Stocks markets in the US and Europe suffered their worst one-day falls since March (Thursday)
Investors were unnerved by the Federal Reserve’s dire assessment of the economic prospects and fresh concerns about a second wave of coronavirus infections.
The S&P 500 fell 6%, its worst day since March 16 and the Nasdaq fell 5.3% (retreating from its all-time high).
The UK’s FTSE 100 closed down 4% and the German Dax Xetra 4.5%.
Global stocks have lost $2.8tn market capitalisation this week, which is equal to the GDP of the UK. The Fed’s cautious tone, the fear of a second wave of Covid-19 infections and Trump’s poor poll numbers ‘rattles’ investors.
US unemployment claims at 1.5m following unexpected hiring as US reopens its economy after 12 weeks
The weekly unemployment claims have fallen from its weekly peak of 6.9m Americans: people are being recalled to work and the government’s $3trn stimulus package is flowing to individuals and businesses.
A total of 44.2m Americans have filed first-time unemployment claims since the start of the pandemic.
Looking Ahead in 2020/2021
Bank of England (BoE) spends billions bailing out the Europe’s richest families
Inequality will worsen unless ministers act, says thinktank
A report by the Institute for Fiscal Studies said that the pandemic crisis threatened to make life worse for the vulnerable.
Coronavirus Impact: Your Money
Insights, trends and what this means for you and your money
How to fight the coronavirus with your investment portfolio
Covid-19 response bonds were created to finance projects aiming to address the coronavirus outbreak.
Demand for Covid-19 response bonds has been strong with the new market already reaching $65bn by the end of May and this figure only continues to rise.
According to Morgan Stanley, a combined $32bn of social and sustainability bonds were issued in April, and most were designed for the Covid-19 response initiatives.
UK households face £6bn debts because of Covid-19, says charity
According to charity StepChange Britons will rack up debt due to the pandemic as people fall behind on credit card payments, council tax and utility bills. Approximately 4.6m households have been affected so far.
This is amid the biggest ever fall in consumer spending and UK households repaid £7.4bn in credit card debt.
Americans spend billions to look good during lockdown
In the 12 weeks since the start of March, overall US health and beauty sales rose by $3.74bn or 13% from a year ago to $32.2bn.
Ecommerce led the increase, up 31% to $9.28bn, encouraged by social media influencers who have been providing self-care tips.
Companies to Watch: winners & losers
Companies to watch and share price movements
AstraZeneca eyes Gilead in Big Pharma’s move beyond Covid
AstraZeneca, the UK’s largest drugmaker valued at $140bn, has reportedly contacted Gilead Sciences, valued at approximately $96bn, regarding a possible merger deal.
If successful, this would be the largest in the industry’s history.
Zara owner to close 1200 fashion stores around the world
Inditex, one of the world’s largest clothing retailers, has been hit hard during the pandemic, with sales down 44% to €3.3bn (£2.9bn) between 1 February and 30 April, the first quarter of its financial year.
The company reported a net loss of €409m during the quarter. Almost a quarter of its shops remained closed by 8 June.
However, online sales growth made up for some of the sales weakness, Inditex said. Online sales rose by 50% year-on-year during the quarter, and were up 95% year-on-year in April.
Just Eat acquires Grubhub in a $7.3bn deal
When the merger is complete, Just Eat will become the world’s biggest food delivery company outside of China.
In after hours trading, Grubhub shares surged 7%.
Just Eat will have 70m active customers globally.
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
What is the difference between value and growth investing?
Value investors look for underpriced, unglamorous or ignored stocks which can be bought at a cheaper price and represent ‘latent value’ over the long term. However without economic growth, many failed to deliver returns.
On the other hand, growth investors focus on stocks which tend to outperform their peers. Growth investing tends to be higher risk and relies on strong outperformance of a few ‘outliers’ delivering above average returns. For example, technology stocks such as Google and Apple are often referred to as growth stocks.
Have You Seen This?
Female-focused news, reports, research, campaigns
1 in 4 pregnant women have experienced discrimination at work during the pandemic, study shows
Survey by the Trade Unions Congress (TUC): one quarter of the 3,400 women surveyed who have been pregnant or are on maternity leave, have been singled out for furlough or redundancy.
Some women were forced to take sick leave even though they were not unwell whilst others were told to take maternity leave early as the employer could not ensure a safe working environment.
Such actions are against the law given that all employers are required to ensure their place of work is safe for everyone according to a Covid-19 risk assessment, and this includes accommodating for pregnant women and new mothers.
Quickie divorce reforms risk long-term problems for women
In the biggest shake-up in divorce law for 50 years, divorcing couples no longer need to attribute fault.
Personal finance experts are concerned that this may lead to private arrangements without professional advice therefore the mismanagement of pension assets.
According to research by the Pensions Policy Institute the average divorced woman has at least a third of the pension wealth of the average divorced man. And DIY divorces could increase the gap significantly.
Please contact the Pensions Advisory Service for impartial and free advice.
Whilst the gender pay gap is 17%, the gender pension gap published before the pandemic was 51.4% for ethnic minority women.
Women are a third more likely than men to work in a sector shut down due to the pandemic.
And more women than men are being furloughed often to look after children.
This reduces how much women earn, how much they save and pay into their pensions, whether they receive employer pension contributions and how much tax relief they receive.
(US) Pandemic impacts entrepreneuring women at work and at home
According to The Diana International Research Institute (DIRI):
For the majority of responders ie 67.9% revenue had declined and only 8.1% saw an increase as their product or service was a good fit for the remote environment.
Nearly 40% of responders are deferring or reducing executive pay, one third are delaying payment and one quarter are reducing employee hours.
Women-owned businesses are experiencing structural inequalities due to the smaller size and age of business and because their businesses are overrepresented in industries hardest hit by the pandemic.
Women’s ability to adapt their business to these challenging circumstances is further impacted by family care responsibilities at home.
On a positive note, two-thirds of women entrepreneurs have found the best support and resources in other business owners and entrepreneurs.
(US) In a survey conducted by 500 Startups, two-thirds of female founders say that the pandemic crisis will disproportionately affect them compared to male founders:
The biggest challenges cited by respondents during the crisis were customer acquisition, increasing runway and maintaining a healthy work-life balance.
A third of respondents said that running a company while taking care of family members at home has been “very difficult” or “impossible” to manage.
The majority (69%) said that they have six months or less of runway, while 40% said they anticipate that they will need more time to meet fundraising goals.
What We’re Tracking
Female-focused products or services, crowdfunding campaigns, start-ups and businesses led by female entrepreneurs & investment, research
SerenaVentures: (US)-founded by tennis player Serena Williams, the venture fund is focused on investing in minority and female led startups which are socially responsible.
They have made 60% diverse founder investments, the fund has a $12bn market cap and include 30+ portfolio companies.
Their investments include The Wing, Mayvenn and billie.
Audrey Gelman, the Co-founder of The Wing resigns
Audrey has been criticised for the company’s treatment of black and brown employees.
She maintains equity ownership over 10% and will remain on the board.
Audrey founded The Wing in 2016 ‘with the idea that women in gig-economy New York needed a place to take meetings, network and refresh their makeup’.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
‘Check in’ to see how you are feeling about your money right now.
Track your daily feelings and observations in a journal and take note of your spending and/saving habits.
Share any insights you may have with a friend or your partner.
What We’re Watching
Watch this TED Talk by Niti Bhan studies business strategy for Africa's informal markets: the small shops and stands, skilled craftspeople and labourers who are the invisible engine that keeps the continent's economy running.
Niti Bhan discovers and makes tangible pragmatic opportunities for sustainable and inclusive value creation.
Coffee Break? Read This
First US woman to walk in space dives to the deepest point in the ocean
Women have grown out their hair grey during lockdown and won’t be going back to dyeing it
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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