Changing of the guard. Why I think Australian and China facing shares could outperform the US in Q4. Six considerations

Firstly – hedge funds are facing margin calls after China’s market rose 8.5% yesterday, its biggest one-day gain since 2008. So stocks exposed to China could also see sizeable wild moves to upside.

Secondly - The Aussie share seems to be breaking out higher. Today the ASX200 is lower amid profit taking, which is natural. But October, November December are traditionally months for the market.But institutional moves could flow to Australia’s market which is tipped to be a major beneficiary of on China’s V-shape growth recovery.

Third - watch iron ore stocks. Iron ore price is up 20% in five days, up 8.5% yesterday with Commodity prices to probably search for higher ground despite Chinese markets being on holiday for a week.

Five - Watch for earnings growth and stock upgrades. In China facing stocks. Watch not just BHP, Rio and Forestcue who make most of their money from China. But consider lithium stocks that could be upgraded with lithium prices seeming have found a new bottom as lithium demand is lithium to increase. So the supply deficit that is expected to hit markets in 2027, 2029 is probably going to be brought forward. So worth watching stocks like Min Res. Its shares are up 41% in five days as its earnings from iron ore and lithium are expected to grow in 2025.

Six- Australia building approvals are on watch todayand are expected to pull back following July’s 10.4% rise. The bottom line is consumer, who is borrowing to build is strong and this is supports Australia’s economic growth story. So watch stocks like Brickworks and Johns Lyng which have gained 9% in 5 days