Economic growth in Switzerland slowed to 0.1 percent in the second quarter, while gaining 1.2 percent from the second quarter of last year when not adjusted for sporting events. First quarter results were weaker than originally reported, as the quarterly increase was revised to 0.4 percent from 0.5 percent, while year-on-year growth was 1.8 percent, lower than the 2.0 percent reading.

With the impasse on tariffs with the US, still at 39 percent, it comes as no surprise that goods exports were down by 4.7 percent in the second quarter. To be sure, tariffs didn't take effect until August, but export gains of 6.9 percent in the first quarter and 5.1 percent in the fourth quarter illustrate how dramatic the decline is. Exports of services were positive, gaining 3.0 percent in the second quarter and somewhat erasing the 4.7 percent contraction in the first quarter.

The chemical and pharmaceutical industries experienced a value-added contraction of 4.8 percent, as exports declined after a strong first quarter which was driven by businesses accelerating sourcing in anticipation of the tariffs.

Private consumption was up 0.3 percent in the second quarter, a slight improvement from 0.2 percent in the first. Increased government spending of 0.9 percent also helped to mitigate a larger contraction.

Today's data show that tariffs are eating into economic growth, even before the full effect of tariffs, making a strong case for weaker economic growth. In fact, in its June economic forecast, the government's group on business cycles forecast below average growth of 1.3 percent this year and 1.2 percent next year. largely resulting from the tariffs.

The result today gives the Swiss National Bank a further argument for cutting its benchmark rates at its September meeting, pushing them into negative territory once again.

A muted 0.1 percent increase expected on quarter, unchanged from the flash.

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.