Rising stock market will brighten the hearts of Investors

Monetary and fiscal stimulus, along with a rebuilding of inventories will be tailwinds for the U.S. economy for the rest of 2009. These positive effects will begin to fade in 2010 at the same time as consumer spending is constrained by high debt levels. A W-shaped recovery will set in, consistent with the muted growth rates.

In the U.S., inflation risk and currency risk are linked. Should U.S. policymakers lack the commitment or the skill to drain the system of emergency liquidity at the appropriate time, confidence in the U.S. dollar as the world’s reserve currency could erode.

Real estate represents collateral for the entire US economic system. At this point, I'm most interested to see what will happen to real estate (private and commercial) now that the stock market trend has turned bullish. The current conventional wisdom is that real estate will remain "down in the dumps" for years to come. Furthermore, thousands of forthcoming foreclosures will make it that much worse.

My own opinion is that a great deal of real estate (homes, condos) are now underpriced -- they are offered for sale at below replacement cost. Interest rates are low (assuming you can get a mortgage).
At certain times, the stock market and the economy will tend to interact with each other. In other words, a rising stock market will brighten the hearts of investors and the public, and in turn a happy public along with optimistic investors will generate bullish pressure on both the economy and the stock market.