Enjoy this email? We’d love you to forward it to someone else who may enjoy it.

Forwarded this email? You can sign up here. 

Here’s what you need to know today

• US President Trump’s tariffs came into effect at 2pm AEST yesterday. To mark the occasion Trump gave a 90 minute speech where he mocked foreign leaders, saying, “I’m telling you, these countries are calling us up, kissing my ass. They are. They’re dying to make a deal.” (AFR)
  
  

• Australian shares were down 2% for the day, as investors faced the escalation in the trade war between our closest ally and our largest trading partner.
  
  

• Concerns around China also pulled down the Australian dollar. It dipped to 59 US cents, it’s lowest level since March 2020, as traders grew concerned about the amount of Australian products (and therefore the amount of Australian dollars) China would be buying. (ABC)
  
  

• Then as quickly as they were on, they were off - as President Trump announced overnight a 90-day pause on tariffs for all non-reciprocating countries (i.e. not China). Markets ripped. The S&P 500 was up 9% (for the day!) and the Nasdaq was up 12%. (CNBC)

  
  
  

  This is a reminder of why you need to remain invested to not miss out on these huge days (which often come in the worst markets). Coincidentally we unpacked the research on today’s episode of Equity Mates Investing (Apple | Spotify)
  
  

• China remains in President Trump’s sights. Yesterday we were digesting the news that the US had upped their total tariff on Chinese imports to 104%. Last night, China responded and upped their total tariff on US imports to 84%. Trump then responded by upping his tariff to 125%. (CNBC)
  
  

• Some of the most beaten down stocks had big one-day moves up. Apple up 11%, Nvidia up 13%, Walmart up 10% and Tesla up 19%.
  
  

• The tariff story isn’t close to over though. This 90-day pause just opens a negotiating window. At the same time, Trump announced his next target, saying he is preparing to announce a “major” tariff on pharmaceutical exports to the US. This would hit $1.6 billion in annual exports from Australia, and Australia’s largest pharmaceutical company CSL was down 5%. (AFR)
  
  

• While Trump is dominating headlines, his key advisers are jockeying for influence. Elon Musk and Peter Navarro have found themselves in a war of words with Musk calling Navarro “dumber than a sack of bricks”, “truly a moron” and “Peter Retarrdo”. White House press secretary Karoline Leavitt played it down, saying that “boys will be boys”. (AFR)
  
  

• Ukrainian President Volodymyr Zelensky said his country had captured two Chinese nationals fighting with the Russian army in eastern Ukraine. He has demanded an explanation from China, who denies helping Russia’s war effort. (CNN)

What the…?

Japan has achieved a world-first, building a full train station in 6 hours. Between the time the last train came at 11:57pm and the arrival of the morning’s first at 5:45am, a whole new station was constructed in the seaside town of Arida.

How? The components were 3D-printed elsewhere and then assembled on-site in one night. The railway’s operator, West Japan Railway, said the process previously would have taken more than two months and cost twice as much. (AFR)

Investing is a lifelong journey

Here’s what you can learn today.

The lifecycle of companies

This is an excerpt from our conversation with Julia Lee from FTSE Russell and Billy Leung from Global X, available exclusively on YouTube. 

In this excerpt, Julia discusses how companies move through different stages:

So when you're looking at a diversified portfolio, hopefully you're not only getting a range of different asset classes, but you're getting a range of different factors as well as sizes.

So large, medium, as well as small cap. When we're comparing the Russell 1000 [US large-cap index] to the Russell 2000 [US small-cap index], I think it just demonstrates a different stage of a growing business. You've got that startup phase and a growth phase, and then as you get larger, sometimes it becomes harder to grow at the same rates you did when you were a smaller company. You're still making lots of money, but the pace of growth tends to slow down a bit and it becomes a little bit more difficult.

We've seen instances where a lot of the companies that we are familiar with have started in the Russell 2000 index and then moved on to the Russell 1000 index and then into the S&P 500 index.

To give you an example, Nvidia, I think it floated in January 1999, it hit the Russell 2000 index in June of that year, which is pretty good. It got into the Russell 1000 index a year later, so in June 2000, but it didn't get into the S&P 500 index until a little bit later than that.

So if we have a look from when it was in the Russell 1000 index to when it got accepted into the S&P 500 index, which was just over two years, there was over 1,000% performance. I think it was 1,043% just to be specific.

There are a few examples of that:

• Netflix, from the time it got into the Russell 1000 index to the S&P 500 index, it was just over eight years and it was about 2,400%.

• Domino's, it was 15 years, just over 15 years, and it was 5,300%

• Harley Davidson, it was a huge 13 years, but it was 10,000%, just over 10,000%.

Interested to learn more about how small-caps can play a role in a diversified portfolio? Check out our YouTube-exclusive interview with Julia and Billy.

Today’s sponsor is HBF

Don't let rigid health plans drain your wallet.

If you’re budgeting for your dream home, that long-awaited holiday, or even just trying to save smarter - don’t forget to include health insurance in the mix.

• Budgeting for health insurance is like a safety net for your goals

• HBF Flex 50 extras cover gives you freedom to use your annual limits across 14 popular services

• No more delaying health checks. HBF Flex 50 extras helps you take care of those niggling issues or sudden problems, from knowing you’re going to get 50% back up to your annual limit. 

Stay on top of your health and budget! 

*Limits, waiting periods and exclusions apply. $200 sub-limit applies to Natural Therapies, including remedial massage

Want more Equity Mates?