The economy was slightly weaker than expected in the April-June period. A flat quarterly performance was a tick less than the market consensus and well down on an unrevised 0.3 percent quarterly increase posted at the start of the year. Annual growth slowed from 1.5 percent to 0.5 percent. Adjusted for sporting events, total output was also flat on the quarter and up 1.1 percent on the year.

Quarterly stagnation masked a 0.4 percent gain in household spending and reflected more a hefty 3.7 percent decline in investment in equipment and software. Construction was also down 0.8 percent although government consumption edged 0.1 percent firmer. Exports of goods (excluding valuables) shrank 1.2 percent but net foreign trade here still made a positive contribution as their import counterpart plummeted fully 7.2 percent. The services side held up much better with exports rising 2.6 percent and imports 2.3 percent.

In terms of output, manufacturing did most of the damage, contracting 2.9 percent. By contrast, most other sectors recorded gains, notably accommodation and food (5.3 percent), trade (2.1 percent), and health and social activities (0.8 percent).

In sum, today's update confirms a significant slowdown in overall growth but still shows significant strength in the service sector. In itself, the report is unlikely to impact the SNB which remains focussed on keeping inflation around the 2 percent mark. To this end, the policy decision due later this month remains uncertain even with the Swiss ECDI (minus 25) and the ECDI-P (minus 30) still languishing quite deep in negative surprise territory.

The economy is seen expanding just 0.1 percent on the quarter, trimming annual growth by a tick to 0.5 percent.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. There is no flash estimate and the first report is typically not issued until around sixty days after the end of the reference quarter. This has the advantage of limiting the size of any future revision and also accommodates the inclusion of the GDP expenditure components.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios.

The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.