Option A is correct in this case. The split is between "That" and "in" + "Will avoid" and "to avoid"
Now not considering the portion" growing confidence" we get ..... "the gains in the stock market reflect ..... that the economy will avoid...."
Therefore its either A or E.
The past perfect form had feared is used to keep the logical flow of events. The sequence is jumbled up in the original sentence but can be read like following:
" many had feared earlier in the year" (Past perfect - had feared economy will slow down in past) ....... ( implicit past - economy recovered ) "the gains in the stock market reflect growing confidence" (present - reflect confidence now) ...... "the economy will avoid the recession" (future)
The Past Perfect expresses the idea that something occurred before another action in the past. It can also show that something happened before a specific time in the past. - people feared that economy will slow down but stopped fearing after it recovered.
I hope I am correct. Please let me know your views on this.
many had feared earlier in the year修饰的是recession, 意思是很多人在上半年很担心的经济紧缩
reflect是主句的谓语,主句是说股市的收益reflect一个增长的信心that…经济会避开很多人在上半年很担心的经济紧缩…(同位语)fear这个动作发生在eariler in the year