The Weekender is my bi-weekly take on macro shifts and emerging themes. It’s not investment advice — or even our firm’s official view. I aim simply to inform, challenge, and maybe entertain. If you’d like this in your inbox every other Saturday morning via Northern Trust, subscribe to The Weekender.

 

Recognising Change

 

A key skill of great investors is the ability to recognise change.

 

That doesn't mean ignoring the data — it means opening the aperture: alternative sources, observation, conversation, anecdote, often ahead of the official numbers. Bennett Goodspeed made a related case decades ago in his book The Tao Jones Averages: The analyst community can become a prisoner of its own spreadsheets when everyone runs the same models on the same inputs — and now the same artificial intelligence tools too — and arrives at a similar conclusion. Once something becomes measurable, consensus usually reprices it quickly.

 

The edge often lies in spotting change before it becomes obvious. At major inflection points — AI, the Federal Reserve's decision framework, Japan's reflation/restructuring, an emergent equity culture in the UK, Europe's capital-market reforms, China's economic transition — the numbers are usually the last thing to move. This isn't an argument against data. Quite the opposite: Data remains our most important discipline. The challenge is recognising when the world is changing faster than the frameworks we use to measure it.

 

The Company You Keep

 

My mother always told me you are the average of the three people you spend the most time with. A reminder I need to get out more and a useful reference when trying to understand a person, their influences, and intellectual frameworks.

 

Alan Greenspan was shaped by Arthur Burns and Ayn Rand, and by years spent among corporate executives long before he ever sat on the Fed — which is why he referenced box-car loadings and scrap-metal prices as much as the official release. His "Cardboard Box Index" wasn't eccentricity. It was his company showing through.

 

Closer to home I'm hopeful the new British prime minister will spend more time in the company of his chosen adviser, Andy Haldane, former chief economist of the Bank of England, who once argued that complex systems are often better governed by simple rules than ever more elaborate regulation.

 

Haldane’s Dog and the Frisbee speech remains one of the best I've encountered: The case for simpler regulations in complex financial systems is not only logical, it's increasingly being adopted (see record high money supply [M2] and U.S. banks stocks for clues).

 

And the person whose company may soon matter to all investors is the new Federal Reserve chair, Kevin Warsh. At Stanford University he had a front row seat to technology. His years at the Hoover Institution were spent among a free-markets, strong-institutions crowd. His closest professional relationship is with Stanley Druckenmiller, and his fund Duquesne Capital, who believes alternative data, markets and corporate commentary see change before economists do, and by the time a survey confirms it, the edge is gone.

 

That's perhaps a filter worth applying to Warsh's Fed.

 

He wants it leaning harder on real-time, alternative data — maybe like rents from Zillow or Invitation Homes, America’s largest single family home landlord (its Q4 2025 supplemental schedule recorded that new leases were collapsing -4% YoY).

 

The market currently frets about AI inflation: Chips, power, cooling and data centres arriving well before the productivity does. The bigger uncertainty may be measurement itself. Statisticians have long used hedonic adjustments to capture improvements in outcome quality and computing power; if AI capability keeps rising while unit costs fall, measured inflation and real growth may eventually look very different to how they look today. Warsh's Stanford/Hoover background and his conviction that AI is a genuine productivity force make him unusually alive to this. His new Fed task forces on data, productivity and the inflation framework they propose, may end up mattering more than the next Consumer Price Index (CPI) print.

 

At inflection points, it can be too early to react to the data — because the way we measure the data may itself be about to change.

 

Scarcity to Surplus

 

Back in the spring we asked whether oil was following the oldest pattern in commodity markets: scarcity eventually creates surplus. Higher prices encourage new supply, diversify trade flows, and accelerate substitution.

 

At the time, consensus focused on geopolitical risk and supply constraints. We suspected the bigger story was resilience. The evidence has continued to accumulate. The Global Crude Oil on Water (FZWWWST) Index measures the estimated volume of crude oil being transported or stored aboard tankers worldwide. It's back near record highs in December.

 

Saudi Arabia is again discounting to Asian buyers, OPEC cohesion looks less convincing, and Iran's ability to command a sustained geopolitical premium appears diminished.

 

That doesn't mean the Gulf no longer matters. This week's escalation was a reminder of how quickly tensions can flare — Washington revoked its waiver on Iranian oil sales, struck Iranian targets, and Tehran responded with attacks on tankers near the Strait of Hormuz and reported strikes on U.S. positions in Bahrain and Kuwait. The Brent crude oil price has moved sharply, back above $76. But even a real escalation is being read by markets as a disruption risk, not a shortage — which tells you something about how full the tank already is.

 

The change worth watching may not be in Tehran, but in Beijing. China's buyer's strike has become one of the most important demand-side developments in oil. A decision to rebuild strategic reserves could matter more to the balance of the market than another round of headlines from the Gulf. If that changes, that's where the next major signal is likely to emerge first.

 

Cheap as Chips

 

Not all changes are equal. Some can alter the trajectory of entire markets.

 

One worth watching is the apparent thaw between Presidents Donald Trump and Xi Jinping and whether it ultimately extends to American companies sourcing memory chips from China. Should that happen, it could challenge one of the market's most dominant narratives: That memory remains structurally scarce and pricing power largely uncontested.

 

Apple's reported interest in sourcing memory from Chinese manufacturers CXMT and YMTC is notable less for the potential volume than for what it signals. If approved, it would imply Chinese capacity is becoming difficult to ignore, even for the world's most important hardware customer. Ironically, domestic demand in China appears so strong that large-scale exports may remain constrained for now. But markets often react to changes in direction before changes in volume. The relevant question isn't whether Chinese supply dominates tomorrow; it's whether investors have fully considered a future where it matters at all.

 

For a market heavily influenced by a handful of memory-chip-related winners, this is a change worth recognising. Few developments would carry greater potential to reshape expectations, margins and ultimately index returns — and, fittingly, the first evidence of it will be a shift in posture, not a print.

 

Capital it’s “Coming Home”

 

One of the most underappreciated consequences of the global shift toward self-reliance is the growing effort by governments to bring capital home. For decades, many countries relied on foreign capital, global supply chains, and international investors to drive growth. Increasingly, governments appear eager to mobilise their domestic savings pools instead. As we’ve discussed, staggeringly large amounts of European, Chinese, Japanese and British household savings are all sitting idle relative to their own equity markets, and policy is now pushing in the same direction across all four.

 

In just the past month, Japan has announced plans to channel ~40% of household savings into equities (from ~23% currently).

 

Andy Haldane reported he wants to create a home bias for British savers (and investment capital for British Plc) via pension tax relief, reversing the perverse situation the world's third largest savings pot has declined from near 50% of domestic share ownership, to less than 5%.

 

And the German's have removed the major obstacle holding back the Savings and Investment Union.

 

If successful, this could add a new structural marginal buyer, creating a persistent, price-insensitive bid for domestic equity markets for years to come. So, for those seeking returns less correlated to AI, or more targeted country allocations in a fragmenting global economy, or even a little more dividend income for retirement, it might pay to recognise governments are trying to encourage capital home, manufacture a domestic source of demand for their own equity markets — a form of “savings put” that could support valuations for years.

 

And so, it might still pay to still buy these markets before they buy themselves.

 

Japan: (Still) a Young Bull

 

Nowhere is the theme more visible than in Japan.

 

As we've discussed over the years, major market breakouts are often followed by extended periods of strong performance — the Dow Jones Industrial Average, after finally reclaiming its 1929 high in the 1950s, went on to compound at double digits for more than a decade. Tokyo has just completed a remarkably similar journey: Roughly 35 years to reclaim the 1989 high, and it has finally broken out.

 

You don't reverse thirty years of corporate behaviour overnight. Cash hoarding, cross-shareholdings, stakeholder capitalism and deflationary thinking took decades to build; the shift toward shareholder focus, capital efficiency and reflation will likely take years rather than quarters.

 

But the catalyst list keeps growing. We mentioned the government's ambition to increase equity ownership from ~23% to 40%, a shift which would require roughly ¥400 trillion (about U.S.$2.5 trillion) of additional household capital to find its way into markets, equivalent to close to a third of the current value of the Tokyo Stock Exchange.

 

Elsewhere, industrial policy looks set to unleash a capex Supercycle. Draft plans reviewed by Reuters point to more than ¥370 trillion of combined public and private investment directed at strategic sectors through fiscal 2040, alongside a marked step-up in private capex. AI sits at the centre of it — Northern Virginia alone reportedly hosts more data-centre capacity than the whole of Japan, which tells you where some of that capital plans to go.

 

The government is targeting nominal GDP near ¥1,100 trillion by 2040, implying growth of roughly 3.5% annually from here. That may not sound extraordinary by American standards; for an economy whose real growth has averaged around 0.4% over the past five years, it's a genuine break from the low-growth, low-inflation mindset that has defined the post-bubble era and is positive for corporate profits, and by extension equity markets.

 

That's a change in narrative. I would not wait for the numbers to confirm it.

 

Where, Not How

 

For most of the last decade, simply being invested mattered more than where. That's starting to change — not because the US case has weakened, but because the opportunity set elsewhere has widened. US equity markets remain the deepest, most liquid, most innovation-dense in the world, and that isn't in question. What's changed is that other regions are no longer simply "cheap versus the U.S." — they're each running their own distinct catalyst, on their own timeline.

 

Long-run returns have always been more about geography than instrument, and the UK, Europe, China and Japan all look young in their respective cycles, each pursuing a version of the same self-reliance instinct: Europe integrating its capital markets, Japan reflating and rebuilding its equity culture, China rebalancing toward domestic consumption and savings mobilisation, the UK revisiting its own relationship with domestic capital. The U.S. bull market, by contrast, is now roughly 3.5 years old — the 8th longest since WWII, against a post-war average of seven. A mature cycle, not a finished one.

 

The point isn't rotation out of America. It's recognising these changes in the rest of the world.

 

One final prediction …

 

…in football. I'm picking England to win it all.

 

It's the least data-driven view in this entire note, which is perhaps fitting. The case rests less on statistics than on something harder to measure: a changed team culture.

 

The biggest opportunities often emerge when behaviour changes before the numbers do. The statistics eventually catch up. By then, the opportunity often has not.

 

We've discussed it in central banking, oil, AI, Japan and domestic savings. Football may prove no different.

 

Across markets and governments, one of the defining themes today is self-reliance: nations seeking to fund more of their own future with their own savings, capital and institutions. In a sense, capital is coming home.

 

England supporters hope football is as well.

 

Whether it's capital or football, the key is often recognising change before the final whistle.

 

Yours in markets, and in sport.

Gary