Check out the companies making headlines before the bell. McDonald’s — Shares fell more than 6% after the U.S. Centers for Disease Control and Prevention said an E. coli outbreak linked to the fast food company’s Quarter Pounder burgers has resulted in the hospitalization of 10 people and one death. Starbucks — The coffee chain fell 4.5% after its preliminary fiscal fourth-quarter results showed a decline in sales. Starbucks also suspended its 2025 forecast. Boeing — The defense stock slipped 0.6% after its third-quarter results were released. Revenues of $17.84 billion, which the company had preannounced, topped an LSEG estimate of $17.82 billion. Boeing reported a loss of $10.44 per share. Free cash flow was also negative $1.95 billion owing to losses in its commercial airplanes and defense segments. Enphase Energy — The solar energy tech company declined 15% after issuing a lower-than-expected fourth-quarter revenue outlook. Enphase expects revenue in the current quarter in a range between $360 million and $400 million, while analysts polled by LSEG forecast $435.8 million. Third-quarter results also missed expectations. AT & T — Shares of the telecom company advanced more than 2% on a bottom-line beat in the third quarter. Adjusted earnings of 60 cents per share topped analysts’ forecasts of 57 cents per share. However, revenue of $30.21 billion fell short of the consensus estimate for $30.44 billion. Coca-Cola — Shares slipped 2.1% despite better-than-expected third-quarter results . Coca-Cola posted 77 cents adjusted earnings per share on adjusted revenue of $11.95 billion. Analysts polled by LSGE had estimated 74 cents earnings per share and $11.6 billion in revenue. While the company has not yet released its full 2025 outlook, it said it is expected currency headwinds will impact its results next year. Hilton Worldwide Holdings — The hotel chain slid 4.3% after posting third-quarter revenue of $2.87 billion, under the $2.91 billion figure expected from analysts polled by LSEG. The company also issued weak guidance for current-quarter earnings guidance. Texas Instruments — Shares rose 3% after the semiconductor company posted a third-quarter earnings and revenue beat. Texas Instruments’ earnings per share of $1.47 on revenue of $4.15 billion topped analysts’ expectations of $1.38 per share on revenue of $4.12 billion, according to LSEG. Seagate Technology — The data storage stock shed more than 4%. Seagate guided for $2.3 billion in revenue for its fiscal second quarter, which came about in line with an LSEG estimate. Seagate’s first-quarter results did top analysts’ estimates on both top and bottom lines. Deutsche Bank — U.S.-traded shares of the investment bank declined around 2%. Although the company reported a profit, it was below analyst expectations. Deutsche Bank reported net income of 1.46 billion euros in the third quarter, falling short of a FactSet estimate for 1.52 billion euros. GE Vernova — The electric power company lost more than 4% after reporting weaker-than-expected quarterly earnings. GE Vernova reported adjusted earnings of 4 cents per share in the third quarter, while analysts surveyed by LSEG had expected 18 cents per share. Meanwhile, revenue of $8.91 billion topped forecasts of $8.78 billion. Qualcomm — Shares fell 3.5% after Bloomberg reported, citing a document, that British chip designer Arm is planning to cancel a key license agreement with the firm. Stride – Shares surged more than 25% after the tech company’s quarterly results beat Wall Street’s expectations. For its first quarter of fiscal 2025, Stride earned 94 cents per share on revenue of $551.1 million. That’s well above the 22 cents per share and $504.3 million in revenue that analysts polled by FactSet anticipated. Winnebago Industries — The recreational vehicle maker fell more than 8% after earnings in the fiscal fourth quarter fell short of expectations. The company posted 28 cents earnings per share, ex-items, versus a FactSet consensus estimate of 89 cents per share. Full-year guidance fell short of estimates. General Dynamics — Shares of the defense contractor dipped 1.3% after third-quarter results missed expectations. General Dynamics reported $3.35 in earnings per share on $11.67 billion of revenue. Analysts surveyed by LSEG were looking for $3.47 per share on $11.64 billion of revenue. Earnings and revenue were both up year over year. Spirit Airlines — The budget airline stock surged more than 28% after The Wall Street Journal reported that it has revived merger discussions with Frontier Airlines. — CNBC’s Sarah Min, Alex Harring, Lisa Kailai Han, Jesse Pound and Sean Conlon contributed reporting
Apple CEO Tim Cook introduces the Apple Card during a launch event at Apple headquarters in Cupertino, California, on March 25, 2019.
Noah Berger | AFP | Getty Images
The Consumer Financial Protection Bureau ordered Apple and Goldman Sachs on Wednesday to pay more than $89 million for mishandling consumer disputes related to Apple Card transactions.
The bureau said Apple failed to send tens of thousands of consumer disputes to Goldman Sachs. Even when Goldman Sachs did receive disputes, the CFPB said the bank did not follow federal requirements when investigating the cases.
Goldman Sachs was ordered to pay a $45 million civil penalty and $19.8 million in redress, while Apple was fined $25 million. The bureau also banned Goldman Sachs from launching new credit cards unless it can provide an adequate plan to comply with the law.
“Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers. Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law,” said CFPB director Rohit Chopra.
Apple Card was first launched in 2019 as a credit card alternative, hinged on Apple Pay, the company’s mobile payment and digital wallet service. The company partnered with Goldman Sachs as its issuing bank, and advertised the card as more simple and transparent than other credit cards.
That December, the companies launched a new feature that allowed users to finance certain Apple devices with the card through interest-free monthly installments.
But the CFPB found that Apple and Goldman Sachs misled consumers about the interest-free payment plans for Apple devices. While many customers thought they would get automatic interest-free monthly payments when they bought Apple devices with an Apple Card, they were still charged interest. Goldman Sachs did not adequately communicate to consumers about how the refunds would work, which meant some people ended up paying additional interest charges, according to the CFPB.
It also meant some consumers had incorrect credit reports, the agency said.
“Apple Card is one of the most consumer-friendly credit cards that has ever been offered. We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers,” Nick Carcaterra, vice president of Goldman Sachs corporate communications, told CNBC. “We are pleased to have reached a resolution with the CFPB and are proud to have developed such an innovative and award-winning product alongside Apple.”
Representatives from Apple did not immediately respond to CNBC’s request for comment.
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Rohit Chopra, director of the Consumer Financial Protection Bureau, will speak Wednesday at DC Fintech Week in Washington, D.C.
The bureau finalized its personal financial data rights rule on Tuesday, a measure that would require financial services firms to unlock an individual’s personal financial data and then transfer it for free to another provider at the request of the customer.
The rule would apply to data associated with a range of products, spanning from bank accounts and credit cards to payment apps and mobile wallets. The bureau said it would also allow customers to comparison shop more easily for favorable rates on deposits or credit.
“By allowing consumers to permission their personal financial data, and make it over time more seamless, people can more easily sign up, switch accounts, and take their financial history with them,” Chopra said Tuesday in prepared remarks at the Federal Reserve Bank of Philadelphia.
The CFPB’s new rule garnered mixed reviews from trade groups. The American Bankers Association raised concerns around data security, while the Financial Technology Association – whose members include Plaid and PayPal – said the regulation “will increase competition, improve consumers’ choices, and drive momentum for future innovations that benefit customers.”
A screen displays the trading information for Morgan Stanley on the floor of the New York Stock Exchange (NYSE), January 19, 2022.
Brendan McDermid | Reuters
Morgan Stanley is expanding the use of OpenAI-powered, generative artificial intelligence tools to its vaunted investment banking and trading division, CNBC has learned.
The firm, which first rolled out an AI assistant based on OpenAI’s ChatGPT technology to its wealth management advisors in early 2023, began rolling out another version called AskResearchGPT this summer in its institutional securities group, according to Katy Huberty, Morgan Stanley’s global director of research.
The tool lets users extract answers from across the universe of Morgan Stanley’s research — including on stocks, commodities, industry trends and regions — collapsing what could otherwise be the cumbersome task of gleaning insights from the over 70,000 reports produced annually by the bank.
“We see it as a game changer from a productivity standpoint, both for our research analysts and our colleagues across institutional securities,” Huberty said in an interview. The tool helps staff “access the highest quality, most insightful information as efficiently as possible.”
Since its arrival as a viral consumer app in late 2022, OpenAI’s generative AI technology has been swiftly adopted by Wall Street’s largest players.
Morgan Stanley says that close to half of its 80,000 employees are using generative AI tools created with OpenAI, while at rival JPMorgan Chase, about 60% of the firm’s 316,043 employees have access to a platform using OpenAI’s models, said a person with knowledge of the matter. The San Francisco-based startup recently raised money at a $157 billion valuation.
OpenAI already has network advantages in financial services because of its ample funding and early focus on use cases for banks, said Pierre Buhler, a banking consultant with SSA & Co.
“They are ahead of everyone else in terms of market penetration,” Buhler said.”But it is an emerging market, and we are still at the very beginning.” It’s likely that competitors to OpenAI such as Anthropic will gain use over time, he added.
Viral hit
At Morgan Stanley, a leader in global investment banking and trading along with JPMorgan and Goldman Sachs, employees have gravitated toward AskResearchGPT, using it instead of getting on the phone or lobbing an email to the research department, Huberty said.
Employees are asking the tool three times the number of questions as compared to a previous tool based on traditional AI that’s been in use since 2017, according to the bank.
It’s most in-demand among salespeople and other client-facing staff who often field questions from hedge funds or other institutional investors, said Huberty.
“We found that it takes a salesperson one-tenth of the time to respond to the average client inquiry” using AskResearchGPT, she said.
Productivity boost
In a recent demonstration, the GPT-4 based chatbot was able to summarize Morgan Stanley’s position on matters from copper to Nvidia to the finer points of standing up a data center, understanding industry-specific jargon and providing charts and links to source material.
The bank wants to push adoption further in light of the productivity gains it’s seeing, Huberty said. The tool is embedded within workers’ browsers as well as Microsoft Teams and Outlook programs to make it readily available.
Understandably, Huberty says she is often asked if AI could ultimately replace the analysts who are creating the reams of research published under Morgan Stanley’s banner.
“I don’t see in the near future a path to just having the machine write the research report to generate the idea,” she said. “I really think that it’s humans who make the call and own the relationship, which is a really important part of the analyst job, or sales and trading job, or corporate banker job.”