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Analyst’s 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 (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Top car making groups point to challenges facing the sector

A key voice in the region’s automotive sector has called for decisive action from Government to support a “strategic national asset”.

Amid widespread anxiety in the industry about the impact of the Zero Emission Vehicle mandate, the North East Automotive Alliance’s CEO Paul Butler has said policymakers must address EV sales rules, energy supply and the country’s trading relationship with the EU. The call from the North East cluster – which is said to be the largest in the country and is home to embattled Nissan – echoes similar announcements at a national level.

Mr Butler said : “The NEAA supports industry calls for decisive action to review the ZEV Mandate, to secure a sustainable long-term trading relationship with the EU, to address industrial energy costs and accelerate delivery of the Industrial Strategy. Getting these fundamentals right is critical to protecting jobs, attracting investment, growing exports, and ensuring the North East and wider UK remains a world-leading location for automotive manufacturing and innovation”.

The NEAA has said the North East is in prime position to lead the country’s transition to electrification, but says the move can only be capitalise upon if an investment friendly and competitive environment is cultivated. Its call follows the results of a major, national-level survey of sector leaders conducted by the Society of Motor Manufacturers and Traders (SMMT), identifying barriers that Government must tackle.

Those issues include the ZEV Mandate, securing fair UK-EU trade, and cutting the underlying energy and business costs that shape investment decisions. ZEV is seen as the most pressing of those challenges, and is said to be forcing manufacturers, like Nissan, to subsidise the market at unsustainable levels because demand is below the trajectory needed to meet 2030 targets.

Pressure from the rules is likely to increase in January next year when annual targets rise to 38% for battery electric vehicle sales for cars and 34% for vans. Current market share is about 24% for cars and 9.5% for vans. The SMMT says brands have already spent more than £12bn on discounts – money they say could otherwise have supported new models, jobs and investment.

In addition to growing employment and energy costs, the group underscored the threat posed by the European Commission’s ‘Made in Europe’ rules which effectively makes UK automotive products uncompetitive in the majority of the European market unless the EU agrees to UK products being recognised as “assembled in the EU”. And, early next year, tightened up rules of origin under the EU-UK Trade and Cooperation Agreement will trigger a 10% tariff on 70% of battery electric and plug-in hybrid models sold in Europe.

Mike Hawes, SMMT chief executive, said: “UK Automotive can drive growth, innovation and net zero, but only if the right decisions are taken now. The Industrial Strategy sets out a plan, but delivery is now what matters.

“We need open trade with Europe, competitive conditions at home, and a realistic route to grow zero emission vehicle uptake. Reforming the ZEV Mandate is not about weakening ambition; it is about making the transition achievable, protecting investment and ensuring the UK remains a place where automotive businesses can build, sell, export and grow. The window for action is closing, which means we cannot wait for lengthy discussions.”

The dominance of the Magnificent Seven technology stocks (Apple, Microsoft, Alphabet, Amazon, Meta Platforms, Nvidia and Tesla) is facing its biggest test since the artificial intelligence rally began. After leading global markets for nearly three years, the world’s largest technology companies are now underperforming as investors question whether the enormous amounts they are spending on AI will generate enough returns.

The shift has become visible in recent weeks. According to deVere Group, nearly $2.3 trillion has been wiped off the combined market value of the Magnificent Seven during June.

The correction comes after a strong run that was driven by expectations that AI would transform the technology industry and create a new wave of corporate profits. That optimism is now giving way to a more cautious approach as investors wait for evidence that the spending is translating into higher earnings.

The upcoming June-quarter earnings season is expected to be an important test for the sector.

Nigel Green, chief executive of deVere Group, said markets are entering a more demanding phase for AI investments.

The Pakistan connection that helped Donald Trump make $1.4 billion crypto jackpot”The easy phase of the AI investment story is over. Investors were willing to support massive spending when expectations were high and stock prices kept rising. Now they want proof that these investments will deliver returns,” he said.
The biggest concern is the scale of spending. Microsoft, Amazon, Alphabet and Meta are investing hundreds of billions of dollars in AI infrastructure, including data centres, advanced chips and cloud computing capacity. Instead of slowing, these investments continue to rise.
Reports suggest that spending by the largest technology companies on AI infrastructure could exceed 700 billion this year, around 70% higher than last year. This has started affecting free cash flow, as companies spend more cash on expansion instead of generating higher profits.

An Apollo Global Management presentation released in June points to the same trend. The report says investors are beginning to rotate away from companies with heavy capital expenditure towards businesses with stronger free cash flow. It also shows that free cash flow among hyperscalers has started declining while capital expenditure as a share of operating cash flow continues to rise.

The Magnificent Seven index has fallen more than 13% from its recent peak, while the broader S&P 500 and Nasdaq have seen much smaller declines. Investors who treated the seven companies as one trade are now beginning to differentiate between them based on business models, profitability and AI monetisation.

The pressure is not uniform across all seven stocks. Amazon, Microsoft, Alphabet and Meta are facing questions over whether their massive AI infrastructure spending will eventually produce enough revenue. Apple is dealing with rising memory and storage costs, which recently forced the company to increase prices on several products. Nvidia, despite remaining the biggest AI beneficiary so far, is also facing increasing competition in the semiconductor market.

At the same time, investors are shifting towards companies that supply the AI ecosystem rather than those building it. Chipmakers, memory manufacturers and computing infrastructure providers have continued to perform well even as the technology giants have struggled.

Green believes this reflects a broader change in investor thinking. “The companies supplying chips, memory and computing power are performing much better than those spending hundreds of billions building AI systems. Owning an AI strategy and owning the economics of AI are two different things,” he said.

The shift also reflects concerns over financing. With interest rates expected to remain elevated, borrowing to fund AI projects becomes more expensive. Several large technology companies are increasingly relying on debt markets despite holding significant cash reserves.

Reports suggest investors are no longer rewarding AI announcements alone. Instead, they want to see measurable revenue growth, expanding margins and improving cash generation.

Macquarie said in a recent strategy note that AI adoption continues to grow much faster than previous technology cycles. Annualised AI revenues are already estimated at around $175 billion, while investment in AI is expected to reach about $850 billion this year. The brokerage noted that adoption rates remain strong even though concerns over valuation and spending have increased.

Apollo also does not view the recent correction as the end of the AI cycle. Instead, it argues that markets are becoming more selective and placing greater emphasis on profitability rather than growth alone.

Green believes the biggest change will be in how investors view the Magnificent Seven. He expects the market to stop treating them as a single group and instead reward only those companies that successfully convert AI investments into sustained earnings growth.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

HOUSTON — The Houston Rockets have spent the past several years building one of the most intriguing young cores in the NBA, drafting and developing Alperen Şengün, Amen Thompson and Reed Sheppard while patiently waiting for the talent to mature around veteran star Kevin Durant. That patience, according to every signal the organization has sent over the first days of NBA free agency, is now officially over.

The Rockets have agreed to a two-year deal with former Boston Celtics point guard Marcus Smart and are finalizing an agreement with veteran shooter Bogdan Bogdanović, moves that appear modest on the surface but speak loudly about what the franchise expects from itself heading into the 2026-27 season. Both players are proven veterans who will push younger players on the roster for time and opportunity, and neither has been signed to develop or to absorb growing pains. They have been signed to win.

The urgency is understandable given how the previous season concluded. Durant arrived last summer to a team coming off a 52-win season and expectations of a deep Western Conference playoff run. The campaign unraveled early when veteran point guard Fred VanVleet suffered an ACL tear just before training camp, forcing Thompson and Sheppard into primary ball-handling roles they were not yet ready to carry at the highest level of the game’s pressure situations. Houston still won 52 games for the second consecutive season, but lost in the first round.

General manager Rafael Stone did not attempt to spin the outcome. He called the year “frustrating and disappointing” at his end-of-season news conference, a frank assessment that reflected how far short of expectations the season had fallen given the talent on the roster.

The Smart signing addresses the most glaring gap exposed by VanVleet’s injury. The 2022 NBA Defensive Player of the Year brings experience and physicality to a backcourt that was repeatedly burned by its own inexperience last season. Smart’s value extends beyond his defensive reputation. He is a player who communicates, organizes and competes at a level that resonates with younger teammates who are still learning how to perform consistently in high-leverage moments, and his presence alongside a returning VanVleet gives Houston options and redundancy rather than relying entirely on the health of a 31-year-old coming off major knee reconstruction.

Houston’s head coach Ime Udoka pointed to shooting as the most urgent priority for improvement after the playoff exit. The Rockets ranked 28th in the league in three-point attempts per game last season, a startlingly low figure for a team that asked Durant, one of the sport’s most complete offensive players, to carry the primary scoring burden. Bogdanović addresses that directly. The 33-year-old had a reduced role with the Los Angeles Clippers last season, but his track record as a knockdown shooter with the Sacramento Kings and Milwaukee Bucks established him as a perimeter option that defenses must respect even when his usage is limited. For a team that too often allowed opposing defenses to crowd Durant and collapse on the roll man without paying a price for leaving the corners open, having a genuine shooting threat off the bench changes the math.

The deeper implication of this offseason’s direction is the pressure it places on everyone in the organization, not just the players. Udoka, who signed a lucrative extension last summer, will face heightened scrutiny if the team’s offensive execution does not improve noticeably from the first weeks of the season. His rotations and his late-game decision-making drew pointed criticism after the first-round exit, and adding veteran players makes that standard of accountability more reasonable, not less. Coaches can more credibly ask for clean execution from experienced professionals than they can from players still adjusting to NBA pace and decision speed.

Stone faces a different but equally real version of the same pressure. He has been methodical and disciplined in building Houston’s roster, resisting the urge to deal from the youth core in pursuit of blockbuster upgrades that were available but came at prices he considered too high. Giannis Antetokounmpo, Jaylen Brown and Kawhi Leonard all became trade candidates at various points during the offseason, and Stone passed on each. His confidence in the existing core and his belief that the right deal would present itself at the right cost has kept assets intact, but it has also narrowed the gap between credit and accountability. If Houston underperforms again next season with Durant, VanVleet, Smart, Şengün, Thompson and Bogdanović on the roster, the questions about why Stone passed on bigger upgrades will only grow louder.

The most obvious remaining trade chip is Dorian Finney-Smith, set to earn $13.3 million this season on a deal with two non-guaranteed years beyond it. Attaching draft compensation to Finney-Smith could conceivably return additional rotation help in a deal, and the Rockets have enough first-round picks in reserve to structure something attractive if the right partner emerges.

Houston’s selection of former Ohio State guard Bruce Thornton with the 31st pick in this year’s draft also reveals something about how Stone views the roster’s near-term future. Adding a developmental guard to the mix only makes sense if the organization has settled on a clear hierarchy and is comfortable signaling to Sheppard that his path to consistent minutes must be earned through performance rather than preserved through rotation necessity. Thornton’s presence makes VanVleet’s $25 million expiring contract more viable as a trade piece and makes a theoretical departure from Sheppard more manageable if he does not take a clear step forward.

The Rockets have tried to balance winning now with developing for later for the past two seasons. Smart, Bogdanović and the clear message from Stone’s end-of-season press conference all say that balance has now shifted decisively toward winning now. Durant will be 38 when next season begins and is entering the final year before he could become an unrestricted free agent, a timeline that makes every game this season more consequential than it might otherwise seem.

The time for patience is over. Houston is telling its players, its coach and itself exactly that.

This article was written by

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Dear partners,

Thank you for your continued trust and support; you are the best partners I could ask for.

I’ll get straight to the point; this was the second toughest quarter we’ve ever had in terms of performance vs. the index. We were down a little over 1% for the quarter while the index was up 15%. This will be a short letter as I don’t want to waste your time and I don’t have excuses. I was slow to react to just how much agentic AI has changed in the past six months and that factor combo of being overweight software and underweight semis hurt pretty badly but I think the real takeaway was the need to keep the growth and quality bars as high as possible alongside valuation. Frankly, I was stuck in the past, focused on trailing valuations instead of facing the stark reality of an evolving world. Looking at past multiples is easy, understanding the world as it currently is, not how you’d like it to be, is far more difficult. In light of this internalization, we have modified the core value of the fund starting with an “N” to noumenon. It’s a philosophical word that is the root of phenomenon. A phenomenon is something as it is perceived but the noumenon is the true, underlying reality of something. This word came from Immanuel Kant and it’s something to strive for, not something that can actually be known or understood. It’s sort of a Platonic ideal. But I think that’s what good investors strive for — a deep understanding of the world as it is, not as they want it to be.

Getting back to the portfolio, we can’t change the past but what are we doing to adjust to the future? As I study each loser, the main reason is sacrificing even slightly on the quality bar. What’s crazy is just how power-law-driven investing is. Of the thousands of companies in our database, I hold the minimum bar to basically the top 75 companies (top 2%). Almost every loser since inception was in the bottom half of that scoring system. The top half, however, has been incredibly resilient. Taking just the top 10 companies since inception in our system and holding only those, the backtested gross returns were ~43% annually. Now, of course, there are always problems with backtests but it was a jarring example of how all of my trading has destroyed value and lowering our standards is the root of the problem. My strengths are not trading and macro. My strength and the core value-add of this fund is the proprietary qualitative and quantitative system that we have to identify winners. Going forward, I am going to keep the bar higher than ever and be laser-focused on that. As I say in every single closing: “All we can do is focus on what we can control and work hard to continually raise our standards.” This quarter certainly forced us to raise our standards. That’s one thing about investing and life, the tough times can crush us or refine us. It’s our choice. I suspect we will look back on this quarter in several years as a turning point that forced us to raise our standards to the next level. That’s what we can control. May the results follow.

Closing

I’m honored to have you as a partner. Thank you for your trust and support. It enables me to think long-term and will be our own competitive advantage.

The stock market, like life, will have its ups and downs. All we can do is focus on what we can control and work hard to continually raise our standards. Our strategy is simple – hitch a ride to the world’s best entrepreneurs that are running the fastest-growing, highest-quality companies at the most attractive valuations we can find. Here’s to many more years of focusing on the inputs and letting the outputs take care of themselves.

Sincerely,

Ryan Reeves

Performance Appendix

* launched August 8, 2022

Disclosures

Infuse Asset Management LP (“Infuse”) is an investment management company to a fund that is in the business of buying and selling securities and other financial instruments. This information is provided for informational purposes only and does not constitute investment advice or an offer or solicitation to buy or sell an interest in a private fund or any other security. An offer or solicitation of an investment in a private fund will only be made to accredited investors pursuant to a private placement memorandum and associated documents.

Infuse may change its views about or its investment positions in any of the securities mentioned in this document at any time, for any reason or no reason. Infuse may buy, sell, or otherwise change the form or substance of any of its investments. Infuse disclaims any obligation to notify the market of any such changes.

The S&P 500 is a U.S. equity index. It is included for informational purposes only and may not be representative of the type of investments made by the fund. References made to this index are for comparative purposes only. Reference to an index does not imply that the funds will achieve returns, volatility, or other results similar to the index. The fund’s portfolios are less diversified than this index. Returns for the index are total returns which include dividends and do not reflect the deduction of any fees or expenses which would reduce returns.

An investment in the fund is speculative and involves a high degree of risk. The portfolio is under the sole trading authority of the general partner. An investor should not make an investment unless the investor is prepared to lose all or a substantial portion of its investment. The fees and expenses charged in connection with this investment may be higher than the fees and expenses of other investment alternatives and may offset profits.

The information in this material is only current as of the date indicated and may be superseded by subsequent market events or for other reasons. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Any statements of opinion constitute only current opinions of Infuse which are subject to change and which Infuse does not undertake to update. Due to, among other things, the volatile nature of the markets, an investment in the fund/partnership may only be suitable for certain investors. Parties should independently investigate any investment strategy or manager, and should consult with qualified investment, legal and tax professionals before making any investment.

The fund is not registered under the investment company act of 1940, as amended, in reliance on an exemption thereunder. Interests in the fund have not been registered under the securities act of 1933, as amended, or the securities laws of any state and are being offered and sold in reliance on exemptions from the registration requirements of said act and laws.

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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Millions of drivers were in line to receive compensation this year, and most of the remainder should have got compensation by the end of 2027.

But the FCA has confirmed that no compensation will be paid before 2027 as a result of legal challenges to the scheme.

Consumer Voice said the scheme left “too many people short-changed”. The FCA has also received challenges from three lenders: Volkswagen Financial Services, Mercedes Benz Financial Services, and Credit Agricole Auto Finance.

The UK’s Upper Tribunal has agreed to hear legal challenges to the scheme, either in December or February next year.

It means that lenders will no longer need to calculate or pay compensation to people owed money under its scheme, until the legal process concludes.

The FCA said it would need to decide what to do next if the courts decided to overturn the programme. Without a scheme in place, the FCA has estimated that up to 19 million complaints would need to be handled individually, taking three years and costing lenders £6bn more.

It said it would “defend the scheme robustly as lawful and the best way to resolve such a widespread, long running and complex issue”.

Ultimately, the industry is expected to cover the full costs of any compensation scheme, including any administrative costs.

Lenders – including some of the UK’s biggest banks and specialist motor finance firms – have already set aside billions of pounds for potential payouts.

The body that represents the lending industry, the Finance and Leasing Association, said it had “concerns” about the programme but that it was choosing not to raise a legal challenge.

Santander, Barclays and Lloyds also accepted the scheme, despite raising concerns that the level of redress is disproportionate to those who suffered harm.

Even if drivers are entitled to compensation from these lenders they will need to wait.

There were some concessions made to lenders in a scaled-down final compensation plan from the FCA.

The Supreme Court considered three test cases which influenced the FCA’s decision and, ultimately, limited how broad the compensation programme could have been.

It focused on whether the car dealers had a duty to act on behalf of their customers, rather than in their own interests. The test case which was upheld was that of Marcus Johnson, who bought his first car – a Suzuki Swift – in 2017.

In his case, the Supreme Court said the terms of his finance deal were unfair due of the size of the commission payment, and the fact he appeared to have been misled over the relationship between the finance firm and the dealer.

The U.S. economy added jobs at a steady pace in June despite headwinds caused by elevated inflation and uncertainty over the Iran war’s economic impact.

What are the key findings of the June 2026 jobs report?

The Bureau of Labor Statistics on Thursday reported that employers added 57,000 jobs in June. That figure was below the estimate of economists polled by LSEG, who estimated 110,000 jobs added.

The unemployment rate dipped to 4.2%, which was also below the estimate of 4.3%.

Revisions were made to the payroll numbers for the prior two months, with April revised down by 31,000 from a gain of 179,000 to 148,000; while May’s report was revised down from 43,000 from a gain of 172,000 to 129,000.

Taken together, employment in April and May was 74,000 jobs lower than previously reported.

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What sectors added or lost the most jobs in June 2026?

Private payrolls added 49,000 jobs in June, well below the LSEG poll’s prediction of 110,000 jobs. May’s private sector job gains were also revised down from a gain of 120,000 to 97,000.

Government payrolls grew by 8,000 jobs last month, while the increase of 52,000 in May was revised down to 32,000 jobs.

The manufacturing sector added 3,000 jobs in June, in line with the estimate of economists polled by LSEG. May’s figures were revised down from a gain of 7,000 jobs to a loss of 2,000.

Healthcare continued to add jobs last month, with the sector adding 21,500 jobs in June. That’s a slower pace than the average monthly gain of 38,000 over the last 12 months. Hospitals added 9,200 jobs for the month, contributing to a significant portion of the gain.

Leisure and hospitality employment declined by 61,000 in June, which reflected weaker than usual seasonal hiring. The sector has shown little net change in employment over the course of 2026 to date.

FEDERAL RESERVE LEAVES INTEREST RATES UNCHANGED AS WARSH ERA BEGINS

What does the June 2026 jobs report mean for the workforce?

The number of long-term unemployed, defined as those who have been jobless for 27 weeks or more, was little changed at 1.9 million in June but is up 286,000 over the year. The long-term unemployed accounted for 27.3% of all unemployed people last month.

The number of people employed part-time for economic reasons also held relatively steady at 4.7 million in June. These individuals would’ve preferred full-time employment but were working part-time because their hours were reduced, or they weren’t able to find full-time jobs.

The labor force participation rate decreased by 0.3 percentage points to 61.5% in June, while the employment-population ratio edged down by 0.2 percentage points to 59%. Both figures were changed little over the year after accounting for annual population control adjustments.

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What experts are saying about the June 2026 jobs report

LPL chief economist Jeffrey Roach noted that, “Firms are still adding to their payrolls, but hours worked are below pre-pandemic levels as firms cut back labor utilization.”

“A concerning trend is the increasing flow of individuals dropping out of the job market altogether. For now, the labor market is holding, giving the Fed opportunity to stay focused on price stability,” Roach added.

Seema Shah, chief global strategist at Principal Asset Management, said that the June jobs report “paints a softer picture of the labor market than investors have become accustomed to, but it should ultimately be welcomed by markets.”

“The slowdown in payroll growth challenges the narrative of renewed labor market strength that has been building in recent months but, importantly, reinforces the view that the Federal Reserve is under little pressure to tighten policy,” Shah said.

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What does it mean for interest rate cuts?

The Federal Reserve is expected to hold interest rates steady in the near term due to stubborn inflation remaining elevated above the central bank’s 2% target, though the market sees a strong possibility of rate hikes later this year.

The CME FedWatch tool shows a 41.8% probability that the Fed will hike the federal funds rate by 25-basis-points from its current target range of 3.5% to 3.75%, versus a 21.7% chance of rates remaining at their current level. 

What does the June 2026 jobs report mean for the market?

The benchmark S&P 500 index rose about 0.7% on Thursday during morning trading following the release of the June jobs report.

The Dow Jones Industrial Average was up about 0.6%, while the Nasdaq Composite was up a little more than 0.7%.