The outlook for North American and European corporate sectors has improved sharply. Upgrades are outpacing downgrades by a factor of three to one. All sectors have seen their net outlook bias (a downgrade risk indicator) improve this year. For just over half, this measure is less negative than it was pre-pandemic. Pent-up demand appears plentiful, and the U.S. experience suggests ending restrictions unleashes this. There are substantial variations in the pace of recovery across and within sectors, and weaker credits remain vulnerable to a loss of economic momentum. The shape of the post-pandemic world is uncertain and questions remain about business-model implications. Concerns around financial policy choices abound. Companies are directing their rapid improving cash flow towards capital spending, acquisitions and, in some cases, shareholder rewards. The improvement in credit metrics is consequently slower.