Goodbye to a possible recession: the markets are finally breathing relatively easy.

Over the past few months, there has been one "star" word in the markets: tariffs . And the second word on this list was also clear: recession. It's true that the latter was more of a question mark, but the context of the global economy and geopolitics unfortunately required careful consideration.

With time passing and calmer waters, is it time to say goodbye to the possibility of a recession ? Markets always prefer to be cautious and not take anything for granted, but there's certainly optimism and a sense that such a recession will definitely not happen.

This is how Rodrigo Utrera , Head of Equities at Santander Asset Management , explains: “Global equity markets continue to consolidate the rebound that began in mid-April, supported by a cooling of the US administration's tariff rhetoric and better-than-expected corporate results in both Europe and the United States.”

And in May, "the fears of an imminent recession that arose in early April with the so-called Liberation Day " have dissipated," although it should be remembered that, in this context, "the United States has performed better than Europe, although the profitability differential in favor of Europe since the beginning of the year remains close to double digits."

However, proof of the market's increased confidence in the lower risk of recession can be found in "the leadership of the more cyclical sectors over the defensive ones, as they had suffered much more in the corrections of early April," he says.

The correction in credit spreads also reflects this recovery in market optimism, and we see how "on both sides of the Atlantic, risk premiums have fallen substantially and are back to March levels, and also in line with levels from twelve months ago."

On the other hand, it's worth remembering that "first-quarter business results were better than expected on both sides of the Atlantic, and although company guidance reflected the uncertainty surrounding the US tariffs, sales figures, and especially profits, were very solid, with business margins showing no signs of weakness," he insisted.

Sales and profit figures were very solid, with business margins showing no signs of weakness.

Meanwhile, earnings estimates , which had been substantially revised downwards in April, "are moderating their declines, and the earnings estimate revision rate is now approaching positive territory in the United States and approaching neutrality in Europe."

And in this context, what can we expect? We have a meeting pending: "In the coming weeks, it will be important to monitor the evolution of the main macroeconomic indicators to sustain this positive trend and determine the evolution of the markets."

Over the past few months, there has been one "star" word in the markets: tariffs . And the second word on this list was also clear: recession. It's true that the latter was more of a question mark, but the context of the global economy and geopolitics unfortunately required careful consideration.