Investors will be dealing with conflicting data and the Fed this week.

A wealth of data will be released this week, giving investors evidence of the direction of the U.S. economy. The biggest data point will be the Advance report of second quarter Real GDP. The consensus forecast calls for growth of only 0.5% following the decline of 1.6% in the first quarter. Our forecast has been for growth of 3%. We have been expecting a narrowing trade deficit and growing inventories would offset the decline in housing and slowing consumer final demand. The consensus does not expect the trade deficit to narrow sufficiently to foster overall growth. There is little doubt, based on monthly data, that the economy is slowing as inflation keeps rising and the Fed raises managed rates.