Raphael Stevens

Morgan Stanley plans to announce that an assistant it created with OpenAI’s latest software is “fully live” for financial advisors and their support staff.
Called the AI @ Morgan Stanley Assistant, the tool gives financial advisors speedy access to a database of about 100,000 research reports and documents.
One adjustment for advisors is that they’ll need to phrase questions in full sentences as though they were speaking to a human assistant, instead of leaning on keywords.

Shannon Stapleton | Reuters

Morgan Stanley has officially kicked off the generative AI era on Wall Street.
The bank plans to announce Monday that the assistant it created with OpenAI’s latest generative AI software is “fully live” for all financial advisors and their support staff, according to a memo obtained by CNBC.

“Financial advisors will always be the center of Morgan Stanley wealth management’s universe,” Morgan Stanley co-President Andy Saperstein said in the memo. “We also believe that generative AI will revolutionize client interactions, bring new efficiencies to advisor practices, and ultimately help free up time to do what you do best: serve your clients.”
Morgan Stanley, a top investment bank and wealth management juggernaut, made waves in March when it announced that it had been working on an assistant based on OpenAI’s GPT-4. Competitors including Goldman Sachs and JPMorgan Chase have announced projects based on generative AI technology. But Morgan Stanley is the first major Wall Street firm to put a bespoke solution based on GPT-4 in employees’ hands, according to Jeff McMillan, head of analytics, data and innovation at Morgan Stanley wealth management.
Called the AI @ Morgan Stanley Assistant, the tool gives financial advisors speedy access to the bank’s “intellectual capital,” a database of about 100,000 research reports and documents, McMillan said in a recent interview.
By saving advisors and customer service employees time when it comes to questions about markets, recommendations and internal processes, the assistant frees them to engage more with clients, he said.

Human speech

The tool, a simple window of text, belies the difficulty in making sure the program would produce quality responses, according to McMillan. The bank spent months curating documents and using human experts to test responses, he said.

One adjustment for advisors is that they’ll need to phrase questions in full sentences as though they were speaking to a human, instead of leaning on keywords as they would with a search engine query, said McMillan.
“No different than how I would ask you a question, that’s how you talk to this machine,” he said. “People are not accustomed to that.”
It’s just the first in a series of solutions based on generative AI planned by the bank, according to McMillan. The firm is piloting a tool called Debrief that automatically summarizes the content of client meetings and generates follow-up emails.

‘Completely disruptive’

Using OpenAI software required a fundamentally different approach than with previous technology efforts, he said. OpenAI’s ChatGPT uses large language models, or LLMs, to create human-sounding responses to questions.
“The traditional way in which you would solve those things is you would write code,” McMillan said. “In the new world, you give examples of what ‘good’ looks like, and the system learns what good is. It’s actually able to ‘reason’ and apply logic that a human would apply.”
Excitement over AI has bolstered the stock market this year and forced entire industries to contend with its implications, leading some experts to declare it the next foundational technology.
“I’ve never seen anything like this in my career, and I’ve been doing artificial intelligence for 20 years,” McMillan said. “We saw a window of opportunity that was just completely disruptive, and I think as an organization, we didn’t want to get left behind.” More

Your Money

The wage gap costs women in the U.S. about $1.6 trillion a year, a new report finds.
Women earned 78 cents for every dollar that men made in 2022, according to the National Partnership for Women and Families.
“We’ve had the pay gap for so long, people have become desensitized to it and think it’s normal,” said Jocelyn Frye, the group’s president.

Marco Vdm | E+ | Getty Images

The wage gap costs women in the U.S. about $1.6 trillion a year, a new report finds.
Women earned 78 cents for every dollar that men made in 2022, according to National Partnership for Women and Families.

Researchers calculated the total cost to women of the wage gap by using statistics from the U.S. Census Bureau, specifically data on all women who worked, whether in full- or part-time jobs, and those who took time off for illness or caregiving.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

“We’ve had the pay gap for so long, people have become desensitized to it and think it’s normal,” said Jocelyn Frye, president of the National Partnership for Women and Families. “But it’s not anything that we should consider normal, and we ought not to normalize disparities that ought not to exist.”
While the numbers are discouraging, experts say the information should motivate women to be more aggressive during pay negotiations.
“I don’t want it to dissuade women or make them feel less motivated to go out there and get the pay they deserve,” said career and money expert Mandi Woodruff-Santos.

3 factors behind the wage gap

Three factors are contributing to the persistent pay gap, said Frye:

Caregiving responsibilities: Women on average tend to work fewer hours because they assume many of the caregiving responsibilities in their families, she said. For instance, women last year spent roughly 2.68 hours a day caring for household children under the age of 6, according to the American Time Use Survey. 
Occupational segregation: Women are concentrated in jobs that pay less and are often shut out from higher-paying jobs through occupational segregation, she said. Forty-two percent of the wage gap is the result of occupational segregation, which was exacerbated by the pandemic, the U.S. Department of Labor has found.
Workplace discrimination: Women continue to face gender bias and discrimination. To that point, half of U.S. adults said women being treated differently by employers contributes to the pay gap, the Pew Research Center found.

“If you intervene in those three issues alone, you could cut that gap significantly,” said Frye.

What the pay gap means for women of color

Asian American women earned the most among female workers, making 89 cents for every dollar white, non-Hispanic male workers earn, the National Partnership for Women and Families found.
That pay scale worsens for each major racial or ethnic group in the country, with white female workers paid 74 cents to the dollar; Black female workers, 66 cents; and Latina female workers, 52 cents. More

A DoorDash Inc. delivery bag sits on the floor at Chef Geoff’s restaurant in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images

Check out the companies making headlines in premarket trading.
PayPal – Shares of the payments giant fell more than 1% premarket after MoffettNathanson downgraded the stock to market perform from outperform and cut its price target 10 days before PayPal’s next CEO, Alex Chriss, is scheduled to take the helm. The firm said it’s excited about the new leadership, but that Chriss could have a challenging start after a difficult 18 to 24 months. MoffettNathanson sees the potential for further downside to its estimates.

DoorDash — Shares added nearly 2% after being upgraded by Mizuho Securities to buy from neutral on Sunday. The Wall Street firm said solid market share and strong consumer spending on food should help the delivery company surpass forecasts in the second half.
Micron Technology — The stock gained about 1.6% premarket after Deutsche Bank upgraded the memory and storage solutions company to buy from hold on Sunday, and also raised its target price. The firm said Micron’s pricing power with semiconductor direct random access memory is hitting an inflection point, and could push the company to beat first-quarter expectations.
Arm Holdings — Shares of the semiconductor company fell 3.7% in premarket trading as the newly public Arm tries to find its level in the market. Bernstein initiated coverage on Monday with an underperform rating, saying it was too early to say Arm will be an AI winner.
— CNBC’s Tanaya Macheel, Jesse Pound and Michelle Fox Theobald contributed reporting. More

Venture capital firms in China invested $26.7 billion in 3,072 deals in the first half of 2023, PitchBook said.
On an annualized basis, that indicates a 31.4% drop from 2022 levels, — on pace to fall below that of 2016, the report said.
On the fundraising front, PitchBook said only three funds denominated in U.S. dollars closed in the first half of the year.

Chinese ride-hailing giant Didi delisted from the New York Stock Exchange just months after its June 2021 IPO after a now-resolved regulatory probe that had forced Didi to suspend new user registrations.
Brendan McDermid | Reuters

BEIJING — Slowing growth and geopolitical tensions are stifling the Chinese startup world that once spawned unicorns such as ByteDance and Didi, according to a PitchBook report Monday.
China’s economic rebound from the pandemic has slowed. U.S.-China tensions have spilled over to finance, dampening already subdued market sentiment. Chinese regulation in the last two years has also made it harder for companies to go public overseas.

Venture capital firms in China invested $26.7 billion in 3,072 deals in the first half of 2023, PitchBook said.
On an annualized basis, that indicates a 31.4% drop from 2022 levels — on pace to fall below that of 2016, the report said.
Most investments were also small.
The annualized value of mega-deals — $100 million or larger — were on pace for their lowest level since 2015, PitchBook said.

While China’s economy showed signs of picking up in the last several weeks, the slowdown in early-stage investing is a steep one to recover from.

Second-quarter deals marked the fourth-consecutive quarter of declines in deal value, according to PitchBook.
A drop in foreign participation was a factor.
The niche but once-burgeoning world of early-stage investors in China had seen firms raise billions of dollars from overseas institutions to invest in domestic startups, which would then hold an initial public offering in the U.S.

Anecdotally, we’ve heard that some US investors have pulled back from allocating to China mainly due to geopolitical concerns and several other factors…

A record low of 10% of deals included an investor based outside of Greater China, down from about 16% in 2018, PitchBook said. On the fundraising front, the report said only three funds denominated in U.S. dollars closed in the first half of the year.
“Anecdotally, we’ve heard that some US investors have pulled back from allocating to China mainly due to geopolitical concerns and several other factors, including a Chinese economic slowdown and crackdowns on the tech sector,” the report said.

Read more about China from CNBC Pro

Growth of yuan-denominated funds and mid-sized funds helped boost overall Greater China fundraising activity to $28 billion — on pace to exceed 2022 levels, but still a sharp slowdown from $131.4 billion raised in 2018, PitchBook said.
Difficulties at the end of the venture capital investing process persisted as market sentiment for IPOs in Hong Kong and the U.S. remained subdued.
The number of exits in the first half of the year fell to 130 from 177 in the second half of 2022, while exit value fell to $77.5 billion from $100.2 billion, PitchBook said. More

If central bankers are to defeat inflation, they must cool the labour market. For two years rich-world wage growth has added to corporate costs, sending prices relentlessly upwards. But as they began raising interest rates to slow the economy, policymakers hoped for an even rosier outcome. They wanted to achieve a “soft landing”, which involves both bringing down inflation, and doing so without mass job losses. It is a lot to ask of a tool as blunt as monetary policy.Are they succeeding? The question is almost certainly one that officials at the Federal Reserve will be asking when they meet on September 19th and 20th. And so far the evidence suggests that—against widespread expectations—labour markets from San Francisco to Sydney are co-operating.image: The EconomistCentral bankers started to raise rates at a time when demand for labour had almost never been so strong (see chart 1). Last year the unemployment rate across the oecd club of mostly rich countries, measuring the share of people in the labour force who would like a job, was a shade under 5%, close to an all-time low. Excess demand for labour showed up in a surge in unfilled vacancies, which reached an all-time high. Workers bargained for higher wages, knowing that they had plenty of options.The scale of the task central bankers set themselves was illustrated by history. Research by Alex Domash and Larry Summers, both of Harvard University, found that there had never been an instance in which the American vacancy rate had fallen substantially without unemployment rising significantly. Last year Michael Feroli of JPMorgan Chase, a bank, studied the record and noted that “whenever the vacancy rate goes down a little it goes down a lot, and the economy lands in recession.”To assess progress in rich-world labour markets, we have assembled data from the oecd and Indeed, a listings website, covering 16 countries. In this group, employers have reduced open vacancies by more than 20% on average from their peak—a historically rapid decline. Some countries, such as France, have seen relatively modest falls of 10% or so. In others, such as Canada, Japan and Switzerland, unfilled job postings are down by a quarter or more.image: The EconomistDeclining vacancies are helping trim wage growth. In America the annual rate of pay rises has slipped from 6% in late 2022 to below 5% today (see chart 2). Canadian wage growth is also falling fast. The story is less clear elsewhere, not least because the quality of the earnings data is worse. In Germany and Italy wage growth has probably stopped rising, though there remain pockets of concern, including in Britain—which might explain why the Bank of England, which also meets this week, is expected to raise rates again.For policymakers, this success would feel a little soiled if it came with a sharp rise in joblessness. According to rules of thumb for America discussed by Messrs Domash and Summers, in normal times you would expect a 20%-plus fall in vacancies to come alongside a rise in unemployment of three or so percentage points within a year.In reality, a year or so after vacancies started heading down, something else appears to be happening. Recently the unemployment rate in the oecd has held steady. Job growth, at 500,000 a month across the rich world, is about as fast as it was in the second half of last year. The working-age employment rate—the share of people aged 16-64 who are actually in a job—has risen to an all-time high in around half of oecd countries. Even places known for high unemployment, such as Italy and Portugal, have found jobs for an unprecedented share of their working-age population.Why are labour markets breaking the historical rule? One possibility relates to “the great resignation” during covid-19. In 2021, spooked by stories of employees quitting to start crypto firms and write novels, some employers may have put up job vacancies as an insurance policy. Now, as fewer folk quit their jobs, they are taking them down again.A second possibility relates to “labour hoarding”. During lockdowns in 2020 many companies let workers go, only to struggle to rehire them when the economy opened up. Bosses do not want to make the same mistake twice. So today, even as the economy slows and firms cut job adverts, they are trying to hang on to existing workers. Central bankers still have a task on their hands, as inflation in many places remains uncomfortably elevated. Even in America and Canada, demand for labour is high relative to supply. Across the rich world wage growth exceeds productivity growth, adding to the pressure. And Messrs Domash and Summers could still be proved right if unemployment jumps in the coming months. But after two years of bad inflation data, and warning after warning that their strategy was sure to fail, policymakers nevertheless have reason to be hopeful. ■ More