S&P 500 - rally into the end of 2005 and early 2006?

So far this year, the S&P 500 return has been lackluster compared to other major stock indices around the world. Some of the major indices around the world have recorded solid growth.

Nikkei 225 index has gone up by 33% for the year mainly on the renewed growth in Japan and the surge in exports. The Hangseng index has gone up by 7.5%. The commodity heavy Australian stock market has gone up by 20%. The Canadian index has gone up by 21%. The emerging markets have also been doing well. The gains exclude dividends.

In comparison the S&P 500 has gone up by 4.74% till date including dividends. Excluding the dividends, the gain has been a miniscule 3.1%. What is the reason for the lowly performance and how do the prospects look moving forward?

As the money magazine points out, the S&P 500 earnings have done well this year. http://money.cnn.com/2005/11/04/markets/2006earnings/ .

The earnings are expected to go up 15% this year - this is above expectations set last year. The earnings arent expected to drop much next year either - it is expected to be in the 10-12% range. There are other articles that point to a bull run in 2006. One such article is quoted in investor insight web site