The economy contracted in the third quarter as the value-add from the chemical and pharmaceutical sector weighed heavily. This was due in large part to a payback from the stockpiling that took place ahead of the imposition of US tariffs.

When not adjusted for sporting events, growth fell 0.5 percent in the third quarter after a revised 0.2 percent in the second. Compared to the third quarter of last year, economic growth slowed to 0.5 percent from 1.3 percent during the second quarter.

Exports of goods fell 4.2 percent during the third quarter, less than the 6.1 percent contraction in the second quarter, but certainly a notable decline. This stands in contrast to the 7.2 percent expansion during the first three months of the year. Services exports on the other hand were 3.3 percent higher in the third quarter after a 1.6 percent contraction in the second.

Consumer spending rose 0.4 percent in the third quarter, matching that of the prior three-month period, while government expenditures contracted 0.2 percent after a 0.6 percent increase in the second quarter.

While today's results are hardly favorable, they are by and large the result of the tariff spat with the US, as seen in the chemical and pharma sectors. But with the recent agreement to drop to 15 percent from 39 percent, Switzerland is now in-line with those imposed on the European Union. That could be an impetus for improved business and consumer sentiment, and not least a welcome development for the aforementioned sectors and the Swiss watch industry.

No revision seen from the flash at minus 0.5 percent in Q3.

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.