The reason the stock market has shown a 50+% increase since March 2009 is that the consumer has shown signs of life. The following picture shows the year-over-year change in retail sales. While the annual rate is still down, you can clearly see that in March there was an inflexion point and the losses slowed and the drop is now "only 6% per year". What investors see is that within a few months there will be positive growth in the economy as consumers return to buying.
Think back to the 2001-2003 recession. That shows in the graph as a minor blip as sales nosed down to -2%. That gives you a healthy appreciation of why everybody was so scared of a depression because in Oct 2008 to March 2009 the drop was down at -12% year-over-year and no sign of the shrinkage stopping...
The above picture is from the
Calculated Risk web site.
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