Following a turbulent start to the week, the majority of markets ended the week with a flourish following news that Evergrande, the faltering Chinese Real Estate company, managed to repay the interest payment on one of its dollar bonds. The $83.5million payment staved off worry of a default whilst also comforting markets with it seemingly evident that the real estate giant was not prioritising domestic debt. Whilst this repayment is but a small proportion of Evergrande’s overall debt position, far from signifying the flailing business is out of the woods, it does suggest that markets overreacted to the noise. This echoes what we have been saying for weeks, that whilst markets have a tendency to overreact to short term news stories, this volatility introduces an opportunity for investors, particularly with the anti-contagion policies put in place by the Chinese authorities set to isolate Evergrande from the broader economy. Evidence of this can be seen in September’s retail sales data released on Monday, seeing it smashing expectation at 4.4%. This suggests that despite Chinese growth (GDP) missing slightly (which is to be expected given the recent short term shocks), the Chinese consumer is still spending… and we are yet to see the Chinese market fully come back online following the impact of the pandemic!