The major averages are higher at midday following stronger than expected final PMIs out of the Eurozone, China, and Japan that lifted the respective regional indexes ahead of similarly encouraging reports from Markit and ISM in the U.S. In Europe, the Stoxx 50 has rallied, while Germany's DAX, France's CAC 40 and the UK's FTSE 100 all in the green. In Asia, Japan's Nikkei 225 and China's CSI 300 notched gains as well. Global equity markets are taking a glass half full approach today, although uncertainty remains over the virus, U.S. relations with China and prospects for another U.S. fiscal package.
ECONOMIC EVENTS: In the U.S., Markit's manufacturing PMI rose to 50.9 in the final July print from the 49.8 reading in June. However, that was a downward revision from the flash 51.3 print for July. The ISM manufacturing index rose 1.6 points to 54.2 in July, which was stronger than expected. The construction spending report undershot market estimates with a 0.7% June drop.
The latest data from the Johns Hopkins Whiting School of Engineering shows there are now 18.1M confirmed cases of COVID-19 worldwide, including 4.68M in the U.S., and 690,181 deaths due to the disease.
TOP NEWS: Shares of Microsoft (MSFT) are 4% higher near noon after the company confirmed that it has held talks with ByteDance to acquire TikTok in the U.S. In a statement, Microsoft said that, "Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States. Microsoft fully appreciates the importance of addressing the President's concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury...Among other measures, Microsoft would ensure that all private data of TikTok's American users is transferred to and remains in the United States. To the extent that any such data is currently stored or backed-up outside the United States, Microsoft would ensure that this data is deleted from servers outside the country after it is transferred."
Shares of Kansas City Southern (KSU) are adding another 2% following the big advance in the stock late Friday that was prompted by The Wall Street Journal's report Blackstone Group's infrastructure arm and Global Infrastructure Partners are together exploring a potential takeover bid for the railroad operating company. Citi analyst Christian Wetherbee understands why there could be interest, "particularly as the company has greatly improved profitability and free cash flow and it is not trading at a premium to peers," but he believes an offer would need to be "substantially higher" than the $185 per share price that the Journal's report implies.
In other M&A news, Varian (VAR) announced that it has entered into a definitive agreement for Siemens Healthineers (SMMNY) to acquire all of the company's outstanding shares for $177.50 per share in an all-cash transaction valued at $16.4B. Meanwhile, Marathon Petroleum (MPC) announced the sale of Speedway to the parent of 7-Eleven for $21B in cash and ADT (ADT) and Google (GOOG, GOOGL) announced they are entering into a long-term partnership that will see the search giant owning 6.6% of ADT's outstanding aggregate common equity.
In news on the search for pharmaceutical answers to COVID-19, Eli Lilly (LLY) announced the initiation of a Phase 3 trial studying LY-CoV555 for the prevention of SARS-CoV-2 infection and COVID-19 in residents and staff at long-term care facilities in the U.S. LY-CoV555, the lead antibody from Lilly's collaboration with AbCellera, is a neutralizing antibody against the virus that causes COVID-19.
In executive change news, both Tyson Foods (TSN) and Clorox (CLX) appointed new CEOs.
MAJOR MOVERS: Among the noteworthy gainers was Jernigan Capital (JCAP), which rose 22% after it agreed to be acquired by NexPoint in a $900M all-cash transaction.
Among the notable losers was Eastman Kodak (KODK), which slid 24% after it said it will issue 29.9M shares as part of a notes conversion. Also lower was Alarm.com (ALRM), which fell 18.5% and saw its shares downgraded by William Blair analyst Bhavan Suri after customer ADT announced a $600M investment from Google.
INDEXES: Near midday, the Dow was up 221.86, or 0.84%, to 26,650.18, the Nasdaq was up 144.82, or 1.35%, to 10,890.10, and the S&P 500 was up 23.94, or 0.73%, to 3,295.06.
Microsoft
+8.795 (+4.29%)
Eli Lilly
+2.55 (+1.70%)
Marathon Petroleum
-0.405 (-1.06%)
KSU
+
Varian Medical
+31.19 (+21.90%)
Siemens Healthineers
+ (+0.00%)
ADT Inc.
+4.84 (+56.21%)
Alphabet
-12.845 (-0.87%)
Alphabet
-12.24 (-0.82%)
Tyson Foods
+0.44 (+0.72%)
Clorox
-4.67 (-1.98%)
Jernigan Capital
+3.25 (+23.30%)
Eastman Kodak
-5.52 (-24.75%)
Alarm.com
-12.24 (-17.53%)