China Evergrande, How Paint Eliminates Air Conditioning and Toast’s IPO

Welcome to “This Week In The Market” where I cover the biggest macro-stories, weirdest articles and the stocks that made moves. This week I cover how a Chinese company’s debt could affect your portfolio, the whitest paint in history and the public debuts of Universal Music Group’s and Toast.

We’re Lucky It Wasn’t Chinese Ever-Venti

The Headline: We were finally delivered the September we were promised. A historically bad month for the market, Monday saw the Dow drop as much as 900 points before recovering slightly at the end of the trading day. The S&P 500 dipped about 2.5% and the Nasdaq got crushed, dropping 3.3%. All indices made recovery plays throughout the rest of the week, highlighted by a 500+ point jump by the Dow on Thursday.

The BFD: The main takeaway from Monday’s sudden sell-off is that sentiment can change quickly in the markets. Sunday night, news reached U.S markets that China’s financial indices were on the decline due to the looming debt default of their largest real estate developer, Chinese Evergrande. As a quick background, most wealth in the United States is concentrated in public equities. Real estate makes up a considerable portion, but it’s only about 7% of GDP. China on the other hand? Real estate makes up about 30% of GDP and is basically their only wealth creation game in town. So when their biggest developer threatens to default on $30 billion worth of debt, this is a problem for the…