You always feel the stock market and the real economy have a symbiotic relationship.
The success of each is widely seen as helping the success of the other. So it is a current curiosity that many UK businesses are pretty sanguine about prospects even though things turned a tad apocalyptic in stock markets this week. There is a disconnect. The word is that business is still investing notwithstanding the rollercoaster ride on the trading screens. They are probably also only likely to get really anxious about Brexit when a definite EU referendum date is set – witness the Scottish independence plebiscite.
You can understand why corporate optimism has far from fallen off a cliff. Business profits are decent, UK employment is high, interest rates are still at historic lows, inflation is well under control, and consumers benefiting from real wage rises in the past year are spending freely.
And the commodities crash – apart from oil given the North Sea – does not really affect us as we don’t produce many. Canada, Australia, South Africa or Russia we are not.
Yet the banner headlines have all been about threats of a new global recession, a possible rerun of the 2008 banking crisis, and people flooding out of equities to the havens of gold and government bonds. China has sneezed and we have all caught the bug.
Bank stocks have been savaged, bounced back, then been savaged again as despite banking sector balance sheets being much, much stronger the shadow of the last crash is a long one.
Businesses do not look to be panicking so far, but they are probably a little wary. It is a case of taking comfort from the UK economic fundamentals, which even with the slight slowdown in growth are still far from shabby, while keeping a weather eye on the macro-picture and whether a cyclone out of the East could change the whole game.
Are we watching the opening credits for a film sequel to the financial crash of eight years ago or the sovereign bond crisis of five years back?
Or is the current market volatility an overreaction to a slowing China and a single US Federal Reserve rate rise in December? Business seems, for now, to have decided to hold its nerve.