Investors started the year brooding about the risk of an American recession.
Torsten Slok of Deutsche Bank, Germany's biggest lender, says clients around the globe were worried.
Financial indicators were flashing red, the stockmarket was weak and yields on low-grade corporate debt had jumped.
The Federal Reserve's decision to raise interest rates in December had been unsurprising, but unwelcome.
At the end of the year a model from economists at JPMorgan Chase had put the chances of a recession within 12 months,
based on the S&P 500 index and corporate-credit spreads, at 65%. But the mood has now improved.
By April 29th JPMorgan's model was putting the chances of a recession at just 15%.
"It's eye-popping how quickly the narrative has changed," says Mr Slok.
One reason for the improvement in sentiment is the Fed's evolving monetary-policy stance.
In January it turned more doveish, abandoning its plans to raise rates in 2019.
"We don't see any evidence at all of overheating," said Jerome Powell, the chairman of the Federal Reserve, on May 1st
after announcing that the Fed would maintain its patient stance. He also repeated his view that the data do not warrant higher rates.
Investors have been delighted by the Fed's pause. But the timing and extent of their change of mood suggests that is not the full story.
One possibility is that their previous gloom may have been overblown.
"The market collapse in December was driven by the calendar," says Catherine Mann of Citigroup, a bank, as investors repositioned for tax purposes.
The "inverted yield curve"—that is, yields on long-term bonds below those on short-term ones,
historically a sign that a recession is on the way— has been ringing alarm bells recently.
But Ms Mann doubts its continued predictive power after a long period in which central-bank intervention depressed interest rates.