And the primary concern seemed to be the health of the world's largest economy: the US.
But over the last few weeks, the data coming out of the US economy has made clear that while things might not be great, we appear to almost certainly not be heading for imminent recession.
(We'd note that the calls for recession shifted from, "We're heading into a recession" to "We're already in recession" as the data started to turn against the economic bears.)
And with signs the economy is not rolling over, markets have settled down considerably.
In a note to clients on Sunday, Don Rissmiller at Strategas Research Partners captured this shift in markets and the data that has brought us seemingly calmer waters.
Rissmiller writes (emphasis ours):
The case that the U.S. is in an economic recession is fading, with continued growth in payroll employment in Feb. True, the BLS jobs report was not universally good. But, so far, there hasn't been the contagion from financial strain that would link Wall St and Main St. in a negative feedback loop. That doesn't mean risk assets have a clear path forward from here. But of the 3 major sources of uncertainty: oil, China & the Fed, there isn't a lot of new worry now.
A better characterization of the U.S. economic data today is that it has gone from "mixed to bad" to "mixed to good." That's a subtle change, but markets care about the second derivative. Investors may be cautious in what they pay for slowing earnings growth. But stable-to-accelerating numbers are a different story.
That's the whole thing: "mixed to good" from "mixed to bad."
It wasn't that investors needed to know we'd see a huge uptick in US or global economic growth, but simply have their fears about another recession - or worse - allayed. And that's what we got.
And so as a US recession has become a more remote possibility, markets have begun perking back up with US and global stocks rallying about 5% over the last month.
Meanwhile US Treasury yields have started backing up again after a rally to start the year was bolstered by the market's belief the Federal Reserve would be paralyzed on policy this year.