​The heartening outlook for 2017 earnings

With stock market volatility being the rule lately, it's no wonder investors remain spooked. That just adds to market uncertainty, which predictably further undermines investor confidence.

"The U.S. equity markets continue to befuddle a majority of domestic money managers," noted Sam Stovall, managing director and U.S. equity strategist at S&P Global Market Intelligence, resulting in their remarkably shoddy performance so far this year.

S&P Global's Market Mutual Fund Research Group reported that only 21 percent, or 437 out of 2,053, of large-cap fund share classes equaled -- much less beat -- the 3.57 percent total return of the S&P 500 stock index year to date through May 31. Uncertainty and underperformance will likely continue, said Stovall, as investors battle such headwinds as a looming hike in the federal funds rate, as well as Britain's possible exit from the eurozone, slowing growth in China and the upcoming, potentially chaotic, political conventions.

But as discouraging as the situation may be, there's a surprising silver lining that could bring cheer to investors, particularly those among the frustrated bulls. The fundamental metrics the market respects and cares about are the totality of corporate revenues and earnings. And the S&P analysts have made some profit projections for 2017, and if they're on the money, the bulls will be rejoice soon enough.

"It's an opportune time to look at the dramatic improvements to corporate revenue and earnings growth that analysts are expecting in 2017," said Ed Yardeni, president and chief investment strategist at Yardeni Research. According to S&P Global Market Intelligence, S&P 500 companies are expected next year to produce 6.2 percent revenue growth and a 13.5 percent jump in earnings growth -- "quite an improvement over the meager 0.4 percent earnings growth logged in 2015 and the 0.9 percent expected this year," said Yardeni in a recent note to clients. And it would be in stark contrast to the current string of four consecutive quarters of falling earnings for the S&P 500.

The analysts expect all 10 sectors of the S&P 500 stock index to perform remarkably well in 2017. According to their projections, the consumer discretionary sector "will continue to be an earnings machine and punk earnings growth rates in financials, industrials and information technology this year and will pick up nicely next ear," said Yardeni.

If these estimates hold true, he added, the declines in 2016 in the energy and materials sectors will be followed by gains in 2017. Energy earnings are expected to boost the overall S&P 500 results. If the energy estimates are excluded from the equation, the S&P 500 earnings will climb only 10.6 percent, almost three percentage points less than the 13.5 percent with energy earnings included.

Here's how the S&P analysts sum up their earnings outlook for the S&P 500's 10 sectors for 2016 and 2017:

• Energy: down 68.9 percent in 2016 but up a whopping 221.9 percent in 2017.
• Materials: off 0.3 percent this year but expected to be up 15.9 percent next year.
• Consumer Discretionary: up 12.3 percent in 2016 and edge up 12.4 percent next year.
• Technology: up 1 percent this year but then jumps 11.9 percent in 2017.
• Financials: up 1.4 percent in 2016 and leap 11.1 percent in 2017.
• Health Care: up 8.6 percent this year and should rise 10.5 percent next year.
• Consumer Staples: up 3.5 percent in 2016 and advance 9.7 percent in 2017.
• Industrials: up 2.5 percent this year and expected to jump 9.2 percent in 2017.
• Telecommunications: up 2 percent this year and should leap 9.2 percent in 2017.
• Utilities: up 3.3 percent this year and will inch up 3.7 percent next year.

Among the stocks in the Consumer Discretionary sector, the big double-digit gainers are the casinos and gaming stocks. They had been in a slump as a result of the Chinese government's clampdown on corruption and money laundering in Macau, a place that's a magnet for global gamblers. That Chinese move drove earnings down 54.6 percent in 2015, but the group is expected to post earnings growth of 6.1 percent this year and then jump an estimated 34.2 percent in 2017.

That makes gaming one of the fastest growth industries around. MGM Resorts International (MGM) and Wynn Resorts (WYNN) are the among the top names in the gaming group.

In energy, the group's projected robust recovery in 2017 is largely the result of easy comparisons with its results in 2015 and estimates for 2016. S&P analysts see the integrated oil and gas producers posting earnings growth of 116.3 percent next year. Oil and gas equipment stocks are expected to do even better -- up an estimated 646 percent in 2017, after falling 53.8 percent in 2015 and a projected 93 percent decline this year.

Among the producers, Exxon Mobil (XOM) continues to be rated a "buy" at S&P Global Market Intelligence. Among the oil and gas equipment makers, S&P has "strong buy" ratings on Rowan Cos. (RDC) and Atwood Oceanics (ATW).

Don't overlook the rambunctious technology stocks, which contribute the most to S&P 500 earnings, with an estimated 20.7 percent share. Standout earnings growth in the tech sector come from application software makers, which are expected to gain 31.1 percent in 2017, largely benefiting from the growth in cloud computing, and Internet software, expected to leap 20.2 percent next year. Apple (AAPL) and Alphabet's Google (GOOGL) are recommended as a "strong buy" by S&P, and Facebook (FB) is rated a "buy."

With this peek into the 2017 earnings growth picture, the remarkably bullish prospects for S&P 500 stocks should bring cheer to stock investors.