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Here’s what you need to know today

• The Pope’s funeral was held over the weekend, and the world’s geopolitical challenges were on full display. St Peter’s Square burst into applause as onlookers spotted Ukraine’s President Volodymyr Zelensky. While inside, Zelensky huddled with America’s Donald Trump, France’s Emmanuel Macron, and Britain’s Keir Starmer. As the eulogies began, speakers asked leaders to “build bridges, not walls” echoing Pope Francis’ famous line criticising Donald Trump back in 2016. (AFR)
  
  

• The Australian election has entered its final week. Peter Dutton has embarked on a 28-seat blitz with a particular focus on Labor-held seats in Victoria, while Anthony Albanese has made his closing argument by focusing on healthcare. The election is Saturday 3 May, but many Australians have taken the opportunity to vote early with more than 1.78 million ballots already cast. (AFR)
  
  

• The Trump Administration’s unlawful deportations have escalated with the deportation of an American citizen. A 2 year-old American citizen was deported with her mother to Honduras, even though her father had filed an emergency petition to keep the child in America. A US Federal Court called the government’s move “illegal and unconstitutional”. (NY Times)
  
  

• Also over the weekend, the FBI arrested a judge from the state of Wisconsin alleging she obstructed the work of immigration officers. Judge Hannah Dugan allowed a man to exit her courtroom out a side door rather than the main door where immigration officers were waiting to arrest him. (ABC News)
  
  

• As we digest news from earnings season in the US, there is no surprise that the trade war is front and centre. America’s largest airlines are not releasing financial forecasts due to “unprecedented uncertainty” (Quartz) while the CEOs of retail giants Walmart, Target and Home Depot have reportedly privately warned Trump of empty shelves as a result of his tariffs. (Axios)
  
  

• The risk of recession in America is rising. Bridgewater Associates, the world’s largest hedge fund, issued a warning about the “once-in-a-generation” economic shift that is raising the risk of recession. (Quartz)
  
  

• One company that continues powering on is Alphabet. The parent company of Google reported numbers that beat Wall Street expectations, with $90 billion in revenue for the first three months of 2025, up 12% from the same time last year, and profit of $35 billion, up 46%. (Alphabet)
  
  

• Germany has revised its 2025 GDP growth forecasts from 0.3% down to zero. Europe’s largest economy shrunk by 0.2% in 2024 and with a large manufacturing sector will feel the effect of Trump’s tariffs, particularly the 25% tariff on automobiles, steel and aluminium. (Financial Times)
  
  

• China has seized a reef in the South China Sea, who’s ownership is disputed by China and the Phillipines. The reef, called Sandy Cay, is situated just kilometres from the Philippines’ most important military outpost in the South China Sea. (Financial Times)

What the…?

Stop being so polite to your AI chatbots! That was the message from OpenAI CEO Sam Altman as he explained that users saying “please” and “thank you” to ChatGPT is costing the company millions of dollars.

Any message to ChatGPT requires the AI system to initiate a full response in real time, relying on high-powered computing systems that use huge amounts of electricity. Goldman Sachs estimate a ChatGPT query uses 10-times as much electricity as a Google search. And with data centres already accounting for 2% of global electricity consumption, the amount of people saying “thank you” after getting their question answered is starting to add up. (Quartz)

Investing is a lifelong journey

Here’s what you can learn today.

The opportunity in climate-focused investing

This is an excerpt from our conversation with Nick Griffin and James Tsinidis, who together manage Munro Partners’ Climate Change Leaders Fund. The fund was one of Australia’s top performing managed funds in 2024, returning 66%. (Listen on Apple | Spotify)

Question: Why is climate one of the biggest technological changes and investment opportunities?

When you're investing, the biggest thing you can do is try and find some sort of structural tailwind that will ultimately lead you towards great companies. Those great companies will get you great earnings growth and earnings growth will equal share price growth. If you go back over time, the smartphone adoption effectively created Apple, e-commerce created Amazon, tap and go payments created Afterpay. Climate is just another one of these structural changes. From our point of view, it's reasonably obvious that we're going to attempt to decarbonise the planet. Most consumers care about it, most corporates care about it, and governments care about it. There's a range of estimates out there, but we think it's somewhere between 30 and 50 trillion dollars to electrify and decarbonise the planet across electricity, transport, packaging. That's steady revenue for the companies that enable decarbonisation.

What are the key areas you're looking at within climate investing?

First is renewable energy itself and all the companies helping to transition from fossil fuels to renewable power sources - everything from solar panels, wind turbines through to the companies building and delivering it to consumers. Second is energy efficiency - retrofitting old buildings and homes with new insulation, heating, cooling systems. Third is clean transportation - everything from Tesla to companies that power electric vehicles in semiconductors, batteries, commodities, but also other transport forms that are harder to decarbonise like shipping with hydrogen. Last is the circular economy - everything from waste collection companies through to plastic recycling, companies benefiting from shifts from plastics to aluminium or containerboard.

How do you think about investing in disruptive new companies versus legacy companies trying to transform?

If you think back to tech examples over the last decade, the companies that made it through have been the ones willing to disrupt themselves and implode their near-term profitability for long-term benefit. Companies that don't do that will make money near-term but ultimately fail. A good example is VW versus Tesla - VW is spending 85 billion euros over four years on electric vehicles, building battery plants, and trades at 6 times earnings while Tesla trades at 100 times earnings. If you take a longer view, VW could be a better investment assuming they succeed. It's the same for oil companies - some are decarbonising themselves and trade at 7 times earnings. If they get to the other side, that's an opportunity.

Prefer to watch this interview rather than listen? All Equity Mates interviews are available to watch in full on YouTube

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