The GDPNow model from the Atlanta Fed predicts that real GDP growth for the second quarter of 2025 will be 2.4%. This estimate is unchanged since July 17 after rounding. After the US Census Bureau released data on housing starts, the estimate for second-quarter real residential investment growth dropped to -7.0%, down from -6.4%.

Upcoming Economic Events

The next update for GDPNow is scheduled for July 25. The advance estimate for Q2 2025 real GDP will be released on July 30 at 8:30 a.m. ET, coinciding with the US Federal Reserve’s rate decision. That week will also see the release of the US jobs report and new tariffs. Many companies will report their earnings that week, including Boeing, Procter & Gamble, UnitedHealth Group, Starbucks, Visa, ARM Holdings, and Ford. Other notable companies like Meta Platforms, Microsoft, Bristol-Myers Squibb, Mastercard, Amazon, Apple, MicroStrategy, Chevron, and ExxonMobil are also expected to share their earnings. With the second-quarter growth estimate steady at 2.4%, we expect increased sensitivity in the market. The small dip in the residential investment growth estimate indicates some weakness, making the situation more complex for traders. Upcoming economic reports will be key in shaping the market’s next significant move. We’re particularly focused on the end of the month when the advance GDP estimate aligns with the central bank’s rate decision. Current market forecasts, as shown by the CME FedWatch Tool, suggest there is over a 90% chance that rates will stay the same. This places more emphasis on future guidance. Any change in this expectation may lead to significant volatility in interest rate-sensitive derivatives.

Market Implications and Strategies

The upcoming US jobs report will be closely examined for signs of a slowing labor market, which could impact future policies. Recently, the Volatility Index (VIX) has remained low, between 12 and 14, indicating the market might be underestimating the risk from these events. We see this as a good chance to buy volatility through options before it gets fully priced in. The wave of corporate earnings reports will give us a detailed look at the economy. Companies like Mastercard will show consumer spending, while Meta will reflect enterprise demand. Guidance from these key companies will likely be more impactful than their previous results. We’ll be alert for any outlook revisions that could indicate a broader economic change. The introduction of new tariffs brings more uncertainty, which could affect inflation and costs for companies like Chevron. With so many events on the calendar, we’re considering strategies like straddles or strangles on major indices to profit from significant price movements in either direction. This strategy allows us to take advantage of the expected increased volatility without making a guess about market direction. Create your live VT Markets account and start trading now.

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