By Eric Parnell, CFA on February 19, 2026February 19, 2026 “All the world’s a stage, And all the men and women merely players; They have their exits and their entrances; And one man in his time plays many parts, His acts being seven ages” – As You Like It, William Shakespeare, 1623 The game has changed once again. At one time, many decades ago, we operated in a Cold War world defined by spheres of influence. One sphere was led by the United States and “The Western World”. The other was led by the Soviet Union and “The Eastern Bloc”. But with the fall of the Soviet Union in 1991, spheres of influence gave way to globalization defined by increasing economic and social interdependence and integration around the world. But starting last decade, the pendulum started swinging back. And with Russia’s invasion of the Ukraine in 2022, the world is increasingly shifting back toward nationalism and a return to spheres of influence. This change has important investment implications that capital markets are only beginning to grapple with. As a result, it is worthwhile today to evaluate the evolving geopolitical landscape as we move through the remainder of the 2020s and into the 2030s in how this latest change may influence our investment decision making. THE LEADS. The global landscape is now defined by three spheres of influence. Two represent the major superpowers, while the third is playing the role of disruptor. United States This is your main protagonist and the central character driving the global story going forward. Say what you will about the current state of relations with its global allies and adversaries, the US economy and its financial markets remain a force to be reckoned with whether the rest of the global cast likes it or not. At $28.8 trillion, it is by far the largest economy in the world, making up more than 26% of global GDP. It is also the third largest country in the world by population with 341 million people, or just over 4% of the world. And from a financial market perspective, it is an absolute beast. Not only is the US the keeper of the global reserve currency in the US dollar, but it makes up nearly two-thirds of the stock market capitalization of the entire world at 64%. If you live in the US, investing in international markets may be an afterthought. If you live outside of the US, an allocation to US markets is essential for most stock investors. China This is your second main character and arguably the primary antagonist in the story depending on where you live in the world. Although it recently ceded the mantle of the most populated country in the world, it still boasts about 1.4 billion people, or 17% of the entire world. Its economy also ranks as second largest at $18.5 trillion, or 17% of global GDP. Its financial markets are a mere fraction of the size of the US, however, making up just over 3% of world market capitalization. Russia This is not your father’s Soviet Union. Russia is no longer the counterbalancing superpower rivaling the US. They are a non-factor in global financial markets having squandered their rising star “BRICS” status from the globalization era. Russia ranks eleventh worldwide in economic output with a GDP of $2.1 trillion, and they are the ninth most populated country at 146 million people. Nonetheless, Russia’s geographic size and legacy commands their own sphere of influence as a regional and disruptive power in the global order. THE SWING POWERS. Before we more broadly define these three spheres of influence, it is important to highlight a few additional key players in the global cast. India Leading among these is the new global population leader, with 1.42 billion people and counting. It now also ranks as the fifth largest economy in the world at $4.1 trillion. India’s determination is to maintain strategic autonomy within these three spheres of influence, which includes cooperating widely and playing these powers off against each other. Once more closely tied to Russia, India’s allegiance has increasingly shifted toward the US, but this is a relationship defined more out of necessity and shared concerns about China. In short, India looks to the US sphere for security, looks to the China sphere for economic growth, and maintains its legacy ties to Russia. And its big and economically important enough to pull off this balancing act across the three new spheres. Western Europe While undoubtedly aligned with the US sphere, the continued influence of what was once the center of the world in spheres of influence days gone by cannot be overlooked. For when you aggregate the economies of Germany, UK, France, the Netherlands along the various other countries in this part of the world, most of which share the euro currency, you have total GDP of $24 trillion that makes up roughly 22% of total global economic output. Combined population is also comparable to that of the US at roughly 310 million, and many of these economies have financial markets that are just as established and healthy, albeit smaller, than the United States. They may not control their own sphere of influence in the new world order, but they cannot be disregarded for their collective influence either. THE SUPPORTING CAST. Before fully defining the three spheres, it is also important to give recognition to other notable characters in the new global landscape. Turkey Another swing player like India. Turkey is geographically significant not only because it resides effectively at the cross section of all three spheres, but it also controls access to the Black Sea. Moreover, the country ranks in the top 20 worldwide in terms of GDP and population. Turkey is also highly transactional and is likely to remain another swing state between the three spheres for the foreseeable future. Iran A major global energy producer, Iran is aligned with both Russia and China. The country’s rulers are increasingly fighting for their survival, however, which could lead to shifts in its allegiance over time. Saudi Arabia Long aligned with the United States as one of the largest energy producers in the world, Saudi Arabia has been increasingly charting its own independent course in working to hedge its relationships between the US and China. Israel A military and tactical powerhouse in traditionally the most politically unstable part of the world, Israel remains aligned with the US but will likely assert its own unique influence on events as they unfold across the Middle East and Gulf States. The Population and Resource Giants: Indonesia, Nigeria, and Brazil These three countries rank fourth, sixth, and seventh, respectively, in global population with more than 725 million people combined, or 9% of the world. In terms of economic output, Brazil ranks in the top 10 worldwide at $2.3 trillion, Indonesia in the top 20 at $1.5 trillion, and Nigeria in the top 35 at $500 billion. And what makes all three particularly notable is their massive presence in the commodities space, whether it be agriculture, industrial metals, and/or energy. All are swing states, and have the potential to become heavyweights on the global stage in their own right, but only if they can overcome the issues with execution and governance that have held them back from realizing their potential for so long. THE STAGE. Now that we have introduced the primary cast, let’s bring out the rest of the ensemble players too and fully define the stage. The following are the three spheres of influence as of today. United States Sphere Defined by financial integration, military alliances, and trade agreements, this sphere includes the following: Core: United States and Canada Western and Northern Europe (NATO) Japan, South Korea, Australia, and New Zealand Central and Latin America Israel Secondary – Potential Swing Players: Middle East and Gulf States Parts of Latin America (Venezuela, Brazil) Southeast Asia (Philippines, Singapore, Vietnam) Taiwan (potentially contested with China) India China Sphere Defined by trade dependency, infrastructure power, manufacturing, and finance Core: Mainland China, Hong Kong, Macau Expanding influence: Southeast Asia including Indonesia Central Asia Africa Middle East Central and Latin America Russia Sphere Defined by energy, military pressure, and political disruption including in former Soviet Union regions Core: Russia, Belarus Challenging: Ukraine Central Asia Eastern Europe “Sweet are the uses of adversity, Which, like the toad, ugly and venomous, Wears yet a precious jewel in his head; And this our life, exempt from public haunt, Find tongues in trees, books, in the running brooks, Sermons in stones, and good in everything” – As You Like It, William Shakespeare, 1623 THE SCRIPT. We’ve defined the three spheres of influence along with the various key swing players and supporting cast. This provides us with a useful framework for future discussions on the economic and financial market opportunity set in a world increasingly moving through deglobalization toward this new reality. So, what then are the expected financial market impacts associated with these evolving spheres of influence on the global environment that has the potential to persist through the remainder of the first half of the 21st century if not longer? The following are the key expectations: Slower economic growth Increase supply chain disruptions Higher commodities prices Higher inflation Reduced corporate profitability Narrowing corporate profit margins Higher borrowing costs Increased financial market volatility Energy sector over technology sector One may read through the above list with alarm about the associated financial market impacts. Perhaps, but one could also look at the above list and see tremendous opportunity. For while some segments of financial markets may indeed struggle with the geopolitical environment not being so overwhelmingly coordinated and accommodating, many other market segments are built to thrive under these same conditions. If anything, the shift in the world order toward spheres of influence could also usher in another renaissance period in active management last seen from the late 1960s to early 1980s. In short, it’s not necessarily a bad thing if investors actually have to work at it in generating outsized returns for a change, for it is times like these where some of the greatest value can be added. As we first introduced with my previous article Tuesday’s Gone from January 27 and continuing through this article, we will continue to maintain a long-term eye on events as they unfold across the global geopolitical landscape and their potential implications on financial markets. Stay tuned. Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Investment advice offered through Great Valley Advisor Group (GVA), a Registered Investment Advisor. I am solely an investment advisor representative of Great Valley Advisor Group, and not affiliated with LPL Financial. Any opinions or views expressed by me are not those of LPL Financial. This is not intended to be used as tax or legal advice. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Please consult a tax or legal professional for specific information and advice. LPL Compliance Tracking #1067455. Eric Parnell, CFA Chief Market Strategist Eric Parnell is the Chief Market Strategist for Great Valley Advisor Group. Eric applies his expertise in finance and economics to manage multi-asset portfolios, mitigate risk, deliver advice that promotes informed decision-making, and facilitate investors achieving their short-and long-term investment goals. He leads the GVA Asset Management platform overseeing the management of asset allocation models for GVA advisors and their end clients. See Full Bio