The French economy grew 0.3 percent in the second quarter, helped by consumer and government expenditures following a 0.1 percent expansion in the first quarter.

Household consumption also increased 0.1 percent in the quarter, recovering some of the first quarter decline of 0.3 percent. Government spending rose 0.2 percent during the second quarter, matching the first quarter gain.

Net foreign trade subtracted 0.2 percent in the second quarter as imports rose 0.8 percent and exports 0.2 percent. Encouragingly, exports improved from the first quarter result of a 1.1 percent decline.

Gross fixed capital formation fell 0.3 percent in the second quarter, extending the first quarters 0.1 percent drop, with the biggest decline coming in manufacturing. The sector saw a 0.9 percent second quarter decline after 0.5 percent in the first quarter.

Inventories contributed 0.5 percent to GDP in the second quarter after 0.7 percent in the previous three months. This appears to be more of a case of buildup due to lack of demand that companies producing more to fill increased customer orders.

With the EU and US agreeing to a trade deal, businesses have a bit more clarity for their planning. The second quarter increase is a welcome result after the marginal first quarter economic performance. Still, there are inventories to work off and the dust still has to settle from the framework trade deal.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. The flash estimate, released a relatively short 4-5 weeks after the end of the reference quarter, is an effort to speed up delivery of key economic data. In contrast to most European flash releases, the French version provides an early look at 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. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anaemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower. Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.