"Daniel Greenwald and Sydney Ludvigson from New York University, and Martin Lattau from U.C. Berkeley, offer a different perspective.
After studying the movements of the stock market going back to 1952 they found that nearly all of it can be explained empirically — in other words, by observation, not merely by theory — by three uncorrelated factors:
1. the overall productivity of the economy
2. the degree to which national output ends up in the pockets of either workers, on one hand, or investors on the other
3. fear — or “risk aversion” in the technical parlance
...Changes in these three factors explain 85% of the stock market’s movements over the past 70 or so years...
Profits as a share of GDP are now near record levels. Great for investors, of course. Companies pay out dividends, buy back stock, or spend the money taking over disruptive startups in Silicon Valley. The professors argue that this one factor accounts for most of the stock market’s real gains for the past 35 years."
http://www.marketwatch.com/story/the-3-things-that-make-the-stock-market-tick-2014-10-31