Why are the markets going gangbusters? DOW Jones reached a five-year high last night and our own market has soared to four-and-a-half year highs breaking above the key 5000 mark for the first time since the collapse of Lehman Brothers. There is little doubt investor confidence has returned in spades. But what is driving this sudden return to form after a pretty dreary global economic outlook over the last four years? It's all about confidence: Investor confidence, business confidence and consumer confidence all combine to drive markets, economies and company profits. When consumers are confident they spend money which translates to higher profits, better corporate results and this translates into increased merger and acquisition activity. On a simple level this is what we are seeing in the US. Consumers and business are becoming more confident, house prices are starting to rise, and unemployment is starting to fall. In short, investors are seeing some blue sky through the clouded GFC outlook over the last four years and are looking to jump on the next bull run. Our market is heavily influenced by news out of China, US and Europe right now. If we look at Europe, another major determinant of our market, again we are seeing some sort of slow steady resolution of the long protracted debt crisis that has plagued the continent and hurt confidence across the board. Europe isn't out of the woods yet but there has been a stabilisation in places like Spain, Italy and Ireland which feeds through to global confidence - and because Europe buys a lot from China which is good news for our resource-driven economy. Demand from China has remained relatively constant and as our fate is so closely linked to theirs there is hope that with a global recovery our mining sector will remain buoyant. Overall we are seeing a consistent feeling that the global recession of the last few years may be turning a corner. Eoin Doyle is a financial and economic commentator.