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Monday, August 18, 2025

'Morgan Stanley sees the AI productivity boom adding $16 trillion to the stock market's value'

The S&P 500 could gain as much as $16 trillion in value as AI turbocharges productivity, Morgan Stanley said.
Strategists said agentic AI and humanoid robots could lead to huge benefits for companies.
The tech could also impact 90% of existing jobs, leading some workers to upskill or change careers.

AI could ultimately be a $16 trillion gift to the stock market

That's according to strategists at Morgan Stanley, who see the productivity gains and cost-cutting spree stemming from artificial intelligence adding as $13 to $16 trillion in value for the S&P 500.

At the high end of Morgan Stanley's estimates, that implies the benchmark index adding another 29% to its market cap.

The bank's predictions, which aren't tied to a concrete timeline, assume that AI's capabilities will continue to "improve rapidly" and that companies will adopt AI on a widespread level, strategists wrote in a note to clients over the weekend.

On a year-to-year basis, that could add around $920 billion in net benefits for large-cap firms, largely due to companies reducing headcount, lowering costs, and helping generate new revenue.

Agentic AI, or AI that can make decisions and act with less supervision than generative AI, could account for around $490 billion of that value, while embodied AI, or humanoid robots, could account for around $430 billion, the strategists estimated. Together, those forces could increase value for S&P 500 by more than 25% of adjusted pre-tax income, per Morgan Stanley's analysis.

Agentic and embodied AI could boost value creation as a percentage of adjusted pre-tax income by more than 25%, per Morgan Stanley's analysis Morgan Stanley Research© Morgan Stanley Research

The bank added that value creation could be most pronounced for companies in sectors like consumer staples distribution, retail, real estate, and transportation. Over the long term, strategists estimated that value creation in all three of those sectors could be at least double what companies are expected to make in pre-tax income in 2026.

According to the bank's AI mapping research, corporations are showing signs of "an inflection" when it comes to adopting artificial intelligence, the note added.

"This degree of market value creation assumes full adoption, which will take place over many years, with time frame varying by company and industry," strategists wrote. "If AI capabilities continue to improve at a non-linear rate, the magnitude of value creation from AI adoption will rise above our already high estimates."

Job market impact

While the stock market could boom, AI-driven value creation could spell trouble for human workers, some of whom may need to upskill or change occupations, the bank said.

Strategists estimated that AI adoption could impact around 90% of existing jobs, but create new roles, like "AI supply chain analyst" and "AI ethicist."

"If history is any guide, AI could result in net job creation, though there could still be periods of displacement," the bank said, pointing to job displacement from prior technological revolutions, like the internet boom. "The ability of employees to be re-skilled will be important for how quickly they can be absorbed back into the labor force."

Other forecasters have voiced more dystopian views on how AI could reshape the job market.

In 2023, Goldman Sachs estimated that AI could automate around 300 million full-time jobs, with roles in the administrative and legal industries being most at-risk.

Antropic's CEO, Dario Amodei, said he believes AI could eliminate half of entry-level white-collar jobs over the next five years, which he speculated could cause the unemployment rate to spike as high as 20%.

https://www.msn.com/en-us/money/markets/morgan-stanley-sees-the-ai-productivity-boom-adding-16-trillion-to-the-stock-market-s-value/ar-AA1KK4CO

'AI could create nearly $1T in annual value for S&P 500 companies – Morgan Stanley'

Morgan Stanley’s analysts believe that artificial intelligence adoption could create approximately $920B in long-term economic value annually for S&P 500 (SP500) companies, representing about 28% of their expected 2026 pretax earnings.

The total potential value creation from AI adoption “could unlock entirely new sources of growth, productivity, and innovation across sectors,” said Stephen C. Byrd, Morgan Stanley's global head of Sustainability Research.

The potential impact is nearly evenly split between two forms of AI, with agentic AI projected to deliver about $490B in annual value, equal to roughly 15% of the S&P 500’s (SP500) consensus 2026 pretax income.

This estimate is net of implementation costs, which Morgan Stanley’s analysis pegs at about 5% of customer benefit. Agentic AI, which refers to AI software capable of performing various virtual tasks, is “likely to affect a broader range of occupations than embodied AI,” Byrd said.

Embodied AI, focusing primarily on AI-enhanced humanoid robotics (ROBO), (BOTZ), (BATS:ARKQ), could generate approximately $430B in annual economic value for S&P 500 (SP500) companies, representing about 13% of projected 2026 pretax income. This type of AI appears to “impact a narrower set of occupations, but with a higher likelihood of automation and job displacement where it does apply.” The analysis estimates the cost to deploy these AI-enhanced robots at approximately $5 per hour.

Several sectors show extraordinary potential for AI-driven value creation, with consumer staples (XLP), distribution and retail (XRT), (RTH), (IBUY), real estate management and development (RWO), (IFGL), (IYR), and transportation (XTN), (IYT), (FTXR) all showing potential savings above 100% of their 2026 consensus pretax earnings.

Findings also reveal that “many sectors have potential savings (pretax, net of indicative implementation costs) above 50% of 2026 consensus pretax earnings,” while technology hardware and equipment (XLK), (IYW), (VGT), and semiconductors (SOXX), (SMH) demonstrate comparatively lower impacts.

Morgan Stanley’s U.S. Equity Strategy team has integrated these findings into an overall AI value creation heat map, identifying healthcare equipment and services (IYH), (IXJ), (XLV), (IHF), (IDNA), (HTEC), transportation (IYT), (XTN), consumer services, software (NYSEARCA:IGPT), (XSW), capital goods, automobiles and components (DRIV), and staples distribution and retail (XRT), (RTH), (IBUY) as sectors with significant AI-driven value creation potential.

“We think industrials is an underappreciated structural beneficiary based on this analysis, which is supportive of our overweight stance,” Byrd emphasized.

Morgan Stanley projects AI-driven efficiency will contribute an incremental 30 basis points and 50 basis points to S&P 500 (SP500) net margins in 2026 and 2027, respectively, with initial assessments pointing to “upside to our baseline estimates for AI-driven margin expansion.”

https://www.msn.com/en-us/money/other/ai-could-create-nearly-1t-in-annual-value-for-s-p-500-companies-ms/ar-AA1KKw4Z

Texas ICE shooting suspects tied to far-left anarchist group formed in 2020 BLM protests

An armed mob arrested for shooting up a Texas immigration detention center last month are reportedly members of a secretive network of far-left “anti-fascists” trained in self-defense and firearms.

An ex-US Marine Corps reservist and 10 others were nabbed after the group, who were clad in black military-style clothing, opened fire outside the Prairieland Detention Center in Alvarado back on July 4 — leaving one cop shot in the neck.

In the wake of the attack, it has emerged that several of the suspects have apparent ties to left-wing extremist groups operating out of Dallas, the Washington Post reported.

Some of them were allegedly trained by Benjamin Hanil Song — the former reservist charged with attempted murder in connection with the attack.

Song would allegedly host weekly sessions to train people for “close quarters combat and large-scale gunfights.”

“The people that were showing up to learn from him — a lot were very young, naïve leftists,” said Corey Lyon, a libertarian who attended some of the sessions but later cut ties with Song.

“They were scared. And Ben was offering them a solution for their fear.”

The group of alleged agitators, which includes some transgender activists, is believed to have met during the Black Lives Matter protests in the summer of 2020.

They initially focused on social justice demonstrations but have since turned their focus to ICE enforcement.

At one point, Song and several others who were arrested had all belonged to the John Brown Gun Club’s Elm Fork chapter – a leftist gun-rights group known for its hard anti-police stance, sources said.

The Elm Fork chapter disbanded in 2023 when three of its members were nabbed for pepper-spraying members of a conservative group who were rallying against drag shows in Fort Worth.

The left-wing gun club, which is among a slew of similar anti-fascist organizations to pop up in recent years, was established largely to counter the right-wing militias during the BLM movement.

It wasn’t immediately clear exactly how many of the alleged ICE attackers were involved with the anti-fascist networks in the area.

A number of these so-called anti-fascist activists are known for joining multiple groups, which routinely split off into factions or disband altogether.

Song, who was arrested after a weeklong search, has been charged with three counts of attempted murder of federal agents and three counts of discharging a firearm in relation to a crime of violence.

He’s also accused of purchasing four of the guns linked to the attack.

Two of the other 10 arrested — Autumn Hill and Meagan Morris — are transgender.

They were all slapped with a slew of charges, including attempted murder of a federal officer, discharging a firearm in relation to a crime of violence and obstruction of justice for concealing evidence.

During the attack, the alleged perps initially set off fireworks, and damaged cars and a guard structure by spray-painting “traitor” and ”ICE pig” on them.

A flag saying “Resist fascism, fight oligarchy,” and flyers with words such as “Fight ICE terror with class war” also were recovered near the center.

The attack “seemed to be designed” to draw ICE personnel outside the facility, Nancy Larson, acting US attorney for the Northern District of Texas, said at the time.

“It was a planned ambush with the intent to kill ICE corrections officers,” she said.

https://nypost.com/2025/08/18/us-news/texas-ice-shooting-suspects-tied-to-secretive-far-left-group-formed-during-violent-2020-blm-protests/

Merck KGaA Drops up to $2B in Skyhawk Collab for RNA-Targeting Tech

Waltham, Massachusetts–based Skyhawk Therapeutics has been collecting collaborations with larger companies in spades since launching in 2018.

Merck KGaA is broadening its neuro pipeline with a collaboration with Skyhawk Therapeutics aimed at developing new small molecule RNA-targeting drugs. Though financial details were not disclosed, the deal could be worth as much as $2 billion.

According to Monday’s announcement, the Waltham, Massachusetts–based biotech would design small molecules against RNA targets selected by Merck. The indications were not announced, with the companies simply stating the targets would be “in select neurological indications with high unmet medical need,” according to the statement.

Merck will dole out milestone payments as well as tiered royalties on any potential sales on molecules developed in the deal. Skyhawk will lead the discovery and preclinical efforts, after which Merck will pick up development and commercialization efforts for molecules it chooses.

Skyhawk’s pipeline is based on small molecule drugs that influence RNA expression inside cells. The deal will see the biotech use its SkySTAR platform—Skyhawk Small molecule Therapeutics for Alternative splicing of RNA—to develop molecules to alter splicing and gene expression at the RNA level. The biotech’s pipeline is focused on neurology and oncology targets, with a Huntington’s drug in Phase I and another for multiple myeloma and non-Hodgkin’s lymphoma, both drugs being splicing modulators.

The collaboration is the latest big ticket agreement Skyhawk has picked up from a larger company in recent years. In April 2024, the biotech struck a $1.8 billion pact with French pharma Ipsen, also in neurological indications. The startup has also signed a $2.2 billion deal with Vertex that includes a $40 million upfront payment as well as two deals with Merck & Co.

Skyhawk launched in January 2018 with a rather modest $8 million in financing.

Merck KGaA has been relatively quiet on the dealmaking front this year, with the only big splash so far being the $3.9 billion acquisition of Connecticut-based SpringWorks Therapeutics in April. The only other deal the company has made was the acquisition of HUB Organoids B.V., a next-gen drug testing company, for an undisclosed sum announced in early January.

https://www.biospace.com/business/merck-kgaa-drops-up-to-2b-in-skyhawk-collab-for-rna-targeting-tech

Over 300 Arrested In DC Amid Federal Crackdown On Crime: Bondi

by Aldgra Fredly via The Epoch Times,

More than 300 people have been arrested following the federal takeover of law enforcement at the District of Columbia police department, according to U.S. Attorney General Pam Bondi.

Bondi said that 68 people were arrested overnight on Aug. 16 after President Donald Trump federalized policing in the nation’s capital. This brings the total number of arrests to more than 300 since the operation began earlier this month.

“Just last night, our federal and DC law enforcement partners made 68 arrests and seized 15 illegal firearms,” Bondi stated in an Aug. 17 post on X.
“Homicide suspects, drug traffickers, and more are being charged. I’ll continue to stand with you as we make DC safe again!”

Those arrested face charges including assault on a federal officer, aggravated assault, felony grand larceny, and driving under the influence (DUI), according to FBI Director Kash Patel.

Trump announced a federal takeover of D.C.’s Metropolitan Police Department (MPD) on Aug. 11, deploying hundreds of National Guard troops to the nation’s capital to curb crime.

Bondi then appointed DEA administrator Terry Cole as D.C.’s “emergency police commissioner,” granting him full authority over the MPD.

Bondi, however, revised the order following a federal judge’s ruling issued in response to legal challenges from D.C. Attorney General Brian Schwalb, who alleged that the federal government violated the Home Rule Act by attempting to replace MPD Chief Pamela Smith.

In her updated order, Bondi stated that Cole will serve as her “designee” at the MPD, and allowed Smith to remain in charge of its operations. The order will still require D.C. Mayor Muriel Bowser to assist with enforcing federal immigration law and locating illegal immigrants.

Spokesperson for the U.S. AG’s office, Chad Gilmartin, said the revised order is stronger than the initial one “because instead of requiring D.C. to rescind just one MDP order, @AGPamBondi has now REQUIRED full cooperation with federal immigration authorities.”

Trump also ordered law enforcement to patrol the nation’s capital around the clock. He invoked Section 740 of the Home Rule Act, which allows the president to control the city’s police department for up to 30 days, with any extension requiring congressional approval.

Schwalb has accused the Trump administration of infringing on the district’s right to self-governance and abusing its authority under the Home Rule Act by declaring “a hostile takeover” of the MPD.

“These orders far exceed the President’s limited authority to request services from MPD, which can only be done on a temporary basis, under emergency circumstances, and solely for federal purposes,” his office said on Aug. 15.

White House spokesperson Abigail Jackson has defended the federal takeover of the MPD, saying it’s necessary “due to the emergency that has arisen in our nation’s capital as a result of failed leadership.”

“The Democrats’ efforts to stifle this tremendous progress are par for the course for the Defund the Police, Criminals-First Democrat Party,” Jackson told The Epoch Times.

https://www.zerohedge.com/political/more-300-arrested-washington-amid-federal-crackdown-crime-bondi

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