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Around 80% of S&P 500 constituents have reported quarterly results so far, and a better picture of economy has emerged.

As well as a whole lot of one word: "bottom."

The US economy has evolved along two distinct tracks over the last two years, with the services sector — just over 70% of the economy — booming. It registered a multiyear high Tuesday, according to the Institute for Supply Management.

On the other hand, the manufacturing sector has been languishing in contraction territory for two years. In fact, the last time the gap between these two parts of the economy was greater was the beginning of this century, in December 2000.

The bifurcation of the economy has been part of the reason this bull market feels "weird."

In a note this week, Bank of America's US Equity and Quant team wrote that some of this dour outlook got worse — but more optimistic.

So far, the continued problems that have plagued cyclical sectors for almost two years have ticked up this earnings season: weak demand, flat sales growth, and high inventories. It's still very hard to be in the goods and manufacturing business.

"Mentions of weak demand jumped," the analysts wrote, "[and are] now tracking the highest level since COVID's 2Q20 slump."

But the team, led by Savita Subramanian, also tracks mentions of the word "bottom" in earnings calls, and they noted that mentions have surged 42% over last year.

"This jump in 'bottom' mentions has usually marked an inflection in [earnings per share]," noted BofA. It says that companies have largely finished reducing their inventory levels and may soon start to rebuild their stock of goods. "Our data suggests that the worst in de-stocking is behind us."

A key factor, of course, is the election, and Subramanian and co. noted that much of the poor corporate sentiment is "malaise ... typical of pre-election uncertainty." But the flip side is that with the election out of the way — regardless of who wins — corporates will have the cloud of uncertainty lifted.

"History suggests that investment activity typically accelerates post-election," the analysts wrote. "We believe the election could be a clearing event for companies to unleash capex."

Throw in a new cyclical recovery backed by a friendly Federal Reserve delivering a long-awaited easing cycle, and even small-cap investors can get excited about the potential for a broad-based rally in stocks.