The S&P500, currently at around 1255, has finally returned to levels last seen before the collapse of Lehman Brothers triggered a huge stock market crash and global recession. This is something few people are talking about as the media appears to still be obsessed with talking about how miserable everything is!
We’re back to the sort of levels seen in 2006 (although we did hit this level back in the dotbom bubble of 1999) but we are still around 20% below the peak of insanity in late 2007. My feeling is there is some more upside to come in 2011, assuming no significant setbacks to the EU or US economies. The eurozone debt crisis appears to be the biggest threat to the global economy right now.
Many constituents of the S&P500 are global multi-nationals and so likely to grow despite any stagnation in the US or EU. Latin America, an economy bigger than China if taken as whole, is motoring ahead as are India and China (although there are concerns of a bubble in the Chinese economy). We must be likely to see the 1500 level again in the next 2-3 years.
UPDATE: Another piece of overlooked information is that US GDP has now fully recovered (even when adjusted for inflation) to pre-recession levels. Some think that due to the extreme pessimism in the consumer investing community, the stock market rebound may continue much longer than it typically would. Several predict annualised returns of 11% over the next five years.