Will the coronavirus lead to a reckoning on 'women's work', the UK economy tipped into the biggest decline on record, Europe has furloughed 30 million workers and bitcoin is 'halving' in May
Weekly newsletter for women who want to be smart about money: financial news, personal finance and investing
Welcome to our #18 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.
“Money fuels our life, it fuels our choices. It’s what allows us to have power and agency in our life. When we take control of our financial future we can live life on our terms” -Jana Hlistova
Photo by Andrea Piacquadio
From The Purse…
Editorial from the Founder
The UK has tipped into the biggest decline on record; it is expected that the economy will contract 7% in 2020, while the eurozone will fall by 7.5%.
The US GDP has declined 4.8% in the first quarter (January to March), which has exceeded economists’ forecasts by 0.8%-the worst decline since 2008.
Europe has furloughed over 30 million workers; in the UK 4 million workers have been furloughed. And unemployment continues to rise in the US: over 30 million workers have now filed for unemployment benefits over the last 6 weeks.
This is in sharp contrast to what we are seeing in the markets: April registered the biggest monthly gain in US stocks since 1987, although we have seen a drop in the markets in the last two weeks.
Companies including Amazon, Apple and Microsoft announced their quarter earnings which dragged the stock markets down-as investors size up the economic impact on businesses.
Gilead’s remdesivir drug to treat the coronavirus has been granted emergency permission by The Food and Drug Administration: its valuation has gone up by $25 billion since February.
Meanwhile the event ‘everyone is talking about’ in the investing world is bitcoin ‘halving’ on May 12. When bitcoin ‘halves’ the supply of bitcoins is lower; lower supply with steady demand usually leads to higher prices.
Women continue to bear the burden of increased housework and childcare because of the ‘great lockdown’. Will this lead to a ‘reckoning’ on women’s work? We hope so!
Stay safe, look after yourself and your loved ones.
Jana
The Big Picture
Global markets and economy news, trends and indicators
The Coronavirus Effect:
The coronavirus lockdown tips the UK into the biggest decline on record
Chris Williamson, the chief business economist at IHS Markit, said that based on responses from business, the UK economy was likely to contract by 7% this year while the eurozone economy could fall by 7.5%.
In Europe, over 30m workers have applied to have their wages paid for by the state via short-term leave schemes to stop unemployment skyrocketing.
This figure represents one fifth of the European workforce ie Germany, France, the UK, Italy and Spain-this underlines the scale of disruption due to the coronavirus.
The rapidly rising number of furloughed workers is forecast to collectively cost the region’s five largest economies more than £100 billion.
However there is concern the money to support workers will simply not last long enough-as the contraction in the economy is much deeper than the financial crisis in 2008.
In the UK, companies in the airline, retail and hospitality sectors are worried about the end of the country’s new furlough scheme in June.
In the UK, more than 4 million workers have been furloughed:
Oil prices have been volatile due to a limit on storage options.
Less consumer and economic activity, has led to less demand for oil.
US: GDP falls by 4.8% Q1 in the worst economic decline since 2008
This exceeds economists’ prediction of 4% decline in output.
Personal consumption, the biggest driver if US economic growth, dropped by 7.6% (the sharpest decline since 1980).
Healthcare accounted for a 40% decline in consumption ‘as hospitals stopped performing lucrative elective procedures’.
US: unemployment has risen to 30.3 million in 6 weeks.
Last week 3.84 million workers claimed for unemployment benefits.
Total unemployment is now 30.3 million.
Unemployment benefits for the week ended April 25 came in at the lowest level since March 21.
US stocks in the month of April registered the largest monthly gain since 1987
This was the biggest monthly rally for US stocks since 1987 reducing S&P 500 losses due to the coronavirus to about 10%.
The S&P 500 fell by 2.8% and the Nasdaq Composite fell by 3.2%.
Amazon warned that the cost of hiring new staff and protecting them from Covid-19 would lead to an operating loss in the second quarter. Amazon’s share price fell by 7%. Revenues increased in Q1 by 26% but costs have increased by $4bn.
Apple also confirmed they were uncertain about the economic environment and withheld guidance for the current quarter. The share price fell by 1%.
Cryptocurrency market value jumped up by $35 billion in 24 hours led by a rapid increase in Bitcoin on Thursday.
Bitcoin, which accounts for most of that movement, was at $9,388.30 — or up 18.57%.
Industry participants base this on the central bank monetary policy around the world and bitcoin halving.
It is believed that Bitcoin will pass the $10,000 price point before the ‘halving’.
Looking Ahead in 2020
Charting the S&P 500, the 2020 crash is reminiscent of the 1929 crash:
European Central Bank’s Christine Lagard: in Q2, worst case scenario-the Eurozone will see a fall in GDP by 15%
The group warned that almost half of all consumer spending in 2020 – the major engine of UK growth over recent decades – is at risk of either being delayed or lost completely.
The group of economists said GDP was set to collapse by 6.8% in 2020, before returning to positive growth of 4.5% in 2021 as businesses try to make up for lost time and consumers ramp up their spending again.
Bitcoin’s ‘halving’ is coming up in May:
Jefferies’ global head of equity strategy, Chris Wood, says to ‘buy’ bitcoin ahead of the event in his Greed and Fear memo
The subject of whether the halving will result in a surge in pricing has been the debated extensively this year.
The price of bitcoin has jumped from $5000 to $9000+ recently.
Coronavirus Impact: Your Money
Insights, trends and what this means for you and your money
Coronavirus: how to protect your pension and investments amid stock market panic (UK)
The emerging new sector of FTSE 100 ‘lockdown’ companies (UK)
Credit card lending falls for the first time on record-as people payoff debt (UK)
British households repaid £3.8bn of consumer credit, including £2.4bn on credit cards and £1.4bn on car insurance and other personal loans in March-people have stopped ‘spending’ using credit.
Millions will experience ‘financial cliff edge’ due to the Covid-19 crisis, says the Citizen Bureau (UK)
Millions of households have missed, or expect to miss, payments on at least one bill as a result of the coronavirus crisis, and could face serious consequences as a result.
Companies to Watch: winners & losers
Companies to watch and share price movements
The EUA means that remdesivir has not undergone the same level of review as an FDA-approved treatment.
Gilead shares pared losses on the news, and closed Friday down 4.8% at $79.95. However, the stock was up nearly 2% in extended trading.
It has a market value of about $101 billion and has gained 21% since the start of the year ie $25 billion since February.
Wall Street expected growth to slow to 11%.
An increase in remote working and learning, along with rising demand for critical cloud infrastructure were behind the results.
According to the CEO Satya Nadella ‘we’ve seen two years’ worth of digital transformation in two months’.
On Friday, Microsoft was only 8% below its February high.
Overall revenue reported was $35 billion.
Berkshire instead purchased $137 billion of its own common stock during the first quarter.
Tesla shares plunged by 10% as CEO Elon Musk said that the US stock market was too high (US)
In the Spotlight
Is there a topic you'd like us to Spotlight? Please tweet @jointhepurse
What is Bitcoin ‘halving’ and why should I care?
On May 12, the number of bitcoins (BTC) entering circulation every 10 minutes (known as block rewards) will drop by half, to 6.25 from 12.5.
This happens every four years and has happened twice before.
When bitcoin ‘halves’ this means that the supply of bitcoins is lower. Lower supply with steady demand usually leads to higher prices.
Since the halving reduces the supply of new bitcoins, and demand usually remains steady, the halving has usually preceded some of Bitcoin's largest runs.
In the last 30 days, bitcoin has gone up 34%+
The next halving will take place between March and June 2024.
Have You Seen This?
Female-focused news, reports, research, campaigns
The ‘women’s work’ of the pandemic
The pandemic is changing how families shop and eat. Women are likely to be bear the brunt of those changes.
When schools and day care is closed, women are more likely to take on more childcare.
Could this lead to a reckoning on ‘women’s work’?
Tamara Ingram, who has been at WPP since 2002, is joining along with Sapna Sood, a director at Compass Group and non-executive director of Kering, which owns Gucci.
Representation in FTSE 100 boards improves
According to a new report by Korn Ferry, the number of women appointed to board positions of European companies continues to gradually rise.
Female board representation is 33% in the FTSE 100, which exceeds the target set by 3%.
What We’re Tracking
Female-focused products or services, crowdfunding campaigns, start-ups and businesses led by female entrepreneurs & investment, research
Houseparty (US)-you’ve probably heard of Houseparty or certainly use it during the lockdown. It’s described as the ‘face-to-face social network’ for people you care about. The company raised $52 million in venture capital funding from Sequoia Capital in late 2016.
Sima Sistani, co-founded the Houseparty app with Ben Rubin, who had previously founded Meerkat, a live-streaming app.
Alongside simultaneous video calls, Houseparty comes with in-app games to play while chatting. There are also separate virtual ‘rooms’ that users can switch between, just like at a real house party.
Money Habits of the Week
Do you have a money habit you would like to share with us? Tweet @jointhepurse
Keep on top of the global and UK financial and economic news and trends.
If you have a retirement fund, are an investor-even if you invest small amounts every month or about to start, truly understanding what is going on in the economy and markets is key.
No one will can ever predict the future, but we can certainly make better informed decisions to protect our money today and our wealth for tomorrow.
What We’re Watching
Brene Brown studies human connection - our ability to empathise, belong, love. In a poignant, funny talk at TEDxHouston, she shares a deep insight from her research, one that sent her on a personal quest to know herself as well as to understand humanity.
This TED talk has over 13 million views and is one of our favourites.
Coffee Break? Read This
Female business consultants pursue a better deal in China (FT paywall)
App launches to teach children about money during lockdown (UK)
Double Lives by Helen McCarthy – a history of working mothers (UK)
Marie Kondo cleaned house. Now she wants to fix your whole life
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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