My 2yr old is "reading"

At daycare they noted my little guy "read" the story, "The monster at the end of this book" to the class today. He "reads" other books, like "Goodnight moon" and "The Big Red Barn" and almost can recite "Hand Hand Fingers Thumb" w/out even looking at the book. It's like he's seeing the monkeys in his head and telling me what scene he's recalling - and they're pretty much in order.