The S&P/ASX 200 closed 8 points higher, up 0.12%. 

A modest rally in US equities overnight couldn't inspire enough confidence in local investors to look past several growing challenges for local equities. China's Manufacturing PMI fell into contraction in October, the Bank of Japan allowed 10-year yields to top 1% plus a few broker notes of interest.

Let's dive in.

ASX 200 Session Chart

ASX 200 higher but closed off session highs (Source: Market Index)

Markets

The official records will show the S&P/ASX 200 rose 7.8 points today. However, as you can see from the shape of the intraday chart, it was a day of steady selling for Aussie shares after the initial opening pop. Hardly an inspiring performance after notching 12-month lows yesterday!

Investor confidence sagged under the weight of spiraling 10-year Japanese Government Bond yields, which topped 0.9% for the first time in over a decade. The BOJ pivoted on its previous 1% cap for the yield on the country's 10-year Bond, to using it as a "reference point". Basically, it signals further flexibility in allowing long term yields to rise as the Bank revises higher its inflation expectations. In layperson's terms, imagine a giant vacuum cleaner sucking billions of dollars out of international markets back to Japan - Including Aussie stocks.

The big miners lagged the broader market today as China's NBS reported the country's manufacturing sector was again in contraction. The official manufacturing PMI for October slumped to 49.5 from 50.2 in September. September's blip above 50, which delineates contraction from growth, was the first since April. Our big miners were hardest hit, notably Mineral Resources (-4.1%), BHP (-1.4%) and Rio Tinto (-0.6%).

Economy

As mentioned above, China's manufacturing sector fell back into contraction. The services sector which had enjoyed a substantial bout of revenge spending following the country's COVID-19 reopening, remained in growth in October - just. The Non-Manufacturing PMI came in at 50.6 in but was down from September's 51.7 and well below economists' forecasts for a reading of 51.9.

Tonight in the USA, we'll get readings on consumer confidence as well as the Chicago PMI.

Latest news

Hi, Kerry here. You'll notice a new face for today's Wrap. Please welcome Carl Capolingua. He'll be contributing to awesome content on both Market Index and Livewire Markets. He loves charts as much (if not more) than I do. Please show him some love!

Chrysos: A deal to supply tech to Barrick

Mining is big business, but the oldest saying when it comes to investing in the sector is: "You're better off selling picks and shovels".

This appears to be the case for mining tech company Chrysos (ASX: C79) whose PhotonAssay software allows mining companies to analyse samples faster, safer, more accurately, and more environmentally friendly if you believe the company's own hype. It looks like Barrick Gold is a believer, though. The top 5 global gold producer will use Chrysos' technology at its Nevada Gold Mines (NGM) complex in the USA, which happens to be the world's largest single mining complex.

Chrysos had been on a steady increase prior to today's announcement, so today's pop is a nice reward for those prepared to follow the trend.

Chrysos daily chart

Inghams: A massive update

2022's ugly duckling has turned into a beautiful swan. Or chicken. Ok, that pun went a little astray, but right on point as far as fund managers were concerned was today's first half trading update from poultry company Inghams Group (ASX: ING). The company noted continued improvement through the first quarter across both farming and processing segments. Even better, demand for poultry products continued to steadily improve as increasingly value conscious shoppers switched back to chicken. Looking forward, Inghams forecast the first half would show an underlying net profit after tax (NPAT) of approximately $71 million, substantially higher than the whole of FY23 result of $60.4 million. Another chart here which was largely bottom-left-top-right prior to releasing good news.

Inghams daily chart

Interesting news and movers

Trading higher

• +16.7% NetLinkz (NET) – Quarterly report

• +11.9% Chrysos (C79) – Deliver PhotoAssay Tech to Barrick Mine Sites

• +7.9% Inghams (ING) – 1H guidance, trading update

• +6.7% Northern Minerals (NTU) – Quarterly report

• +3.9% Clarity Pharma (CU6) – Quarterly report

Trading lower

• -18.9% Magnis Energy (MNS) – Quarterly report

• -10.3% St Barbara (SBM) – Quarterly report

• -3.9% Latin Resources (LRS) – Quarterly report

• -3.6% Base Resources (BSE) – Quarterly report

• -1.4% Resolute Mining (RSG) – Quarterly report

• -1.2% Ramelius Resources (RMS) – Macquarie downgrade

Broker notes

A few Macquarie notes of interest:

Cochlear (COH) – Underperform with $215.0 target ($242.51 at Oct 27)

• “While recognising the strength of COH's brand/ market position, we are looking for evidence of sustained higher CI unit sales growth and/or better-than-expected operating leverage. At 43.7x FY24E EPS, we see greater appeal in CSL (23.9x) and RMD (18.5x).”

Ramelius (RMS) – Downgrade to Neutral with $1.70 target ($1.68 at Oct 30)

• “Downgrade to Neutral on share price strength. RMS had a mixed start to FY24 while the company noted a beat to internal expectations.”

Morgan Stanley’s take on IGO (IGO)

• Upgrade to Equal-weight with $9.25 target ($9.69 at Oct 30)

• “After the strong move lower today, we now view most of the risk factors that have kept us UW as priced in. The stock is trading close to our updated base case valuation and price target.”

• “Several key risk factors for IGO – including higher capex, slower ramp-up at Kwinana, pricing issues and related volume build at Greenbushes, as well as poor performance of nickel assets – have largely played out.”

Scans