REUTERS/Beck Diefenbach

The S&P 500 is up a whopping 200% from its March 2009 low. At 2,003, the S&P has already exceeded many analysts' forecasts.

Morgan Stanley strategist Adam Parker and economist Ellen Zentner believe that the conditions are just right for the bull market to keep going for years.

"Our best guess is that an S&P 500 peak of near 3000 is possible should the U.S. expansion prove to have five or more years left to it, based on 6% per annum EPS growth through that time frame and a 17x price-to-earnings ratio," Parker writes.

Like many experts on Wall Street, Parker reminds us that our recent experience of crisis to recovery is not like most of history's boom-and-bust cycles. He also reminds us that bull markets and economic recoveries don't just end because they have gone on for a long time.

"We believe a prolonged period of deleveraging in the U.S., coupled with an uneven global recovery, are just two of the reasons why this could prove to be the longest US expansion — ever," he writes.

In a meaty 27-page research note titled "2020 Vision: Long Live the Expansion," Parker and Zentner argue that the U.S. economy is actually only in the early parts of its growth cycle. It is also uniquely positioned in the world, benefiting from low volatility, healthier balance sheets, and a lack of corporate exuberance.

Here's their bulleted summary (verbatim):

• The world economy is not in sync. Major regional economies are at different points along the growth cycle. In general, DM is leading while EM is lagging.

• Volatility in the U.S. continues to trend lower, which can extend the life of expansions.

• Deleveraging in the U.S. is ongoing, albeit largely complete, and balance sheet priorities have shifted.

• Interest payments on debt burdens are ultra-low, and household debt dynamics suggest there exists a sizable cushion protecting consumers in a rising interest rate environment.

• Capital spending and inventories do not look stretched.

• Corporate management hubris and other corporate metrics of overheating remain muted.

• Several broad economic indicators in the U.S. have only just reached “normal” expansionary levels and are far from looking unsustainable.

A couple of things are worth highlighting from the analysts' note.

The Capital Spending Comeback

First is their comment about capital expenditures, or business investment. The capex recovery has been one of the most highly anticipated and controversial aspects of this recovery. And recent data show that it's finally happening.

However, Parker notes that capex levels are still at reasonable levels when considered relative to sales. For Parker, this is a sign that "hubris" is absent.