Bank of America indicated in the third quarter earnings conference call that corporate profits will increase significantly by 2025.

The bank's strategist, Savita Subramanian, stated in a report on Monday that as more than one-third of the S&P 500 index component companies reported earnings, the mention of the word 'bottom' during earnings conference calls increased significantly.

Subramanian stated, 'Due to softness in commodities/manufacturing, companies have been experiencing a soft demand environment for nearly two years. However, we see signs indicating that the worst period may be over.'

Bank of America studied records of the third quarter earnings conference calls and found a 56% year-on-year increase in the mentions of the word 'bottom.' Additionally, the number of mentions of 'soft demand' has dropped to the lowest level in two years, which is a good sign for cyclical companies in the manufacturing sector.

Subramanian said, 'Historically, a sharp increase in mentions of 'bottom' often signals a turning point in earnings per share.'

The report states that following significant increases in the mention of the word 'bottom' in earnings conference calls in 2009 and 2020, the S&P 500 index saw quarterly EPS growth of over 75%. These signals suggest that Subramanian believes manufacturing activity will rebound in the first half of next year, the Fed may continue to cut interest rates, and the uncertainty of the presidential election will also pass.

Subramanian mentioned that the frequency of the word 'election' mentioned in earnings conference calls increased by 62% compared to the 2020 election cycle, indicating that 'given the uncertainty, some companies are 'waiting and seeing.'

"Interestingly, history shows that investment activities typically accelerate after the election," Subramanian said. "We believe the election may be an event for companies to release capital expenditure, especially in a low interest rate environment."

In addition, the options market has priced in the trend of technology giants' earnings days this week similar to past volatility, with limited investor demand to guard against sell-offs.

Among the five major technology companies reporting earnings, only Meta shows a significant difference between implied options volatility and past volatility. Meta has risen more than 20% on two out of the past eight earnings days and experienced a significant drop of 25%, making it incomparable even with an implied volatility of 7%.

Celine Zhao, Head of US Stock Research at Optiver, stated: "We see that the range of implied options volatility is roughly in line with the historical average levels for technology giants. However, we have not seen a significant increase in skewness for these companies, indicating limited hedging demand against downside risks. This may be due to reduced concerns in market concentration, capital spending, or valuation compared to the past two quarters."