This week market attention is poised to turn to U.S. economic data, which include second-quarter gross domestic product on Friday.

The rest of the week is full of releases as well, with new home sales released today, the Case-Schiller house prices and consumer confidence on Tuesday, durable goods and the Fed's Beige Book on Wednesday. The week ends with second-quarter GDP, Chicago Purchasing Managers Index and final University of Michigan-Reuters consumer confidence on Friday.

The releases this week will be closely watched following Fed Chairman Bernanke's remarks last week that the U.S. economy is heading for a period of unusual uncertainty. His comments, before Congress, follow a string of disappointing economic indicators.

Things We Should Learn by the End of this Week

In addition to the first look at GDP figures which should show an economy growing slightly slower than what as we saw in the 2nd quarter, a couple of key points we should look out for. One is consumer confidence. We know that with government stimulus waning monetary policy makers and government officials would like to see consumer and business spending take the baton from loose monetary policy/government stimulus. We have had two months of weak retail sales and firms were reluctant to hire the past several months as the sovereign debt crisis in the Euro-zone intensified.

With a retrenching housing market & construction sector because of the end of the government's home tax credit, that added housing to employment and consumer spending/confidence as weak readings recently. We also saw the pace of manufacturing activity slow in June.

Overall, that has put the US economy in the cross hairs, especially as we've seen some pick up in Euro-zone of late - strong manufacturing and services PMI, industrial new orders, and German business confidence. With the fear of sovereign debt and the concerns of the solvency of the European banking sector fading, the contrast has been rather sharp between Europe and US of late.

Also, in the UK we saw a very surprising 2nd quarter GDP report which has further underscored the weak data from the US. With emerging economies doing well and raising rates on fear of inflation (think India) and Chinese officials trying to cool their overheating economy, the US looks like an island of weakness right now and that has been reflected by weakness in the greenback, first in early June, but again throughout July.

US Releases this Week

Tue. 9AM
S&P/CS 20-City House Price Index y/y (May)
Prior: 3.8%
Forecast: 3.9%

CB Consumer Confidence (Jul)
Prior: 52.9
Forecast: 51.3

Richmond Manufacturing Index (Jul)
Prior: 23
Forecast: 14

Wed 8:30AM
Durable Goods Orders m/m (Jun)
Prior: -0.6%
Forecast: 1.0%

-ex Transportation
Prior: 1.6%
Forecast: 0.4%

Fed Beige Book

Thu 8:30AM
Jobless Claims (Jul 10)
Prior: 464K
Forecast: 456K

Fri 8:30AM
Gross Domestic Product q/q Annualized (2Q Advance)
Prior: 2.7%
Forecast: 2.5%

Employment Cost Index y/y (2Q)
Prior: 0.6%
Forecast: 0.5%

Chicago PMI (Jul)
Prior: 59.1
Forecast: 56.1

UMich Consumer Sentiment (Jul final)
Prior: 66.5 (prelim)
Forecast: 67.5

This week's data than could be a turning point.

Tuesday - Consumer Confidence & Housing Prices

While we don't have consumer spending figures this week, we do have consumer confidence on Tuesday. Now, it's not a guarantee that sentiment translates to weaker or stronger spending, but it does have a close correlation to the labor market. If its harder to get jobs, we tend to see weaker confidence, however if the job market is tightening than confidence tends to go up.Currently, the forecast is for a slide in the Conference Board consumer confidence index to 51.3 in July.

So, have firms gotten over the uncertainty due to Europe in May/June? We don't have employment data either this week, except for weekly jobless claims so we have to wait for the first week of July for that. But we do have some figures that can help paint us a picture of domestic demand on Wednesday in the from of durable goods orders.

Also, the housing sector has been very beat up as of late, but prices have been rising from their levels one year ago. We get the latest data on prices from the S&P/Case-Shiller 20-city house price index. Expectations are for prices to be 3.9% higher in May compared to a year ago.

Wed - Durable Goods and Beige Book

Durable goods orders are one of those indicators that rise , in that those are the goods that consumers and businesses purchase when they are feeling more confident as they are good designed to last 3 years or more. The expectations is that durable goods will be up 0.9% in June, following a 0.6% decline in May.

The Beige Book is a good measure of the overall economy, as it assesses how the Fed sees things shaping up. It gives important anecdotal information on current economic conditions, bringing together various data on various industries broken down by regions. While it's not necessary to read through the whole report it will give us a clear idea of what policy makers are reading. Will it show an economy that is weakening, or one that had hit a rough patch in the wake of the Euro-zone sovereign debt crisis and may now get back to recovery? How is lending and borrowing conditions?

Therefore Wednesday's look at durable goods and the Beige Book will be a nice appetizer for the 2nd quarter GDP report.

Fri- GDP and Chicago and Chicago Fed

The economic slowdown in the US will be evident in Friday's GDP release. The first look at the second quarter should show the U.S. economy grew at an annual rate of 2.5%, from a 2.7% pace in the first quarter.

The mix of growth will be important in setting the tone for the second half. For instance, if the inventory sector contributed significantly to second-quarter growth, stock rebuilding could be a drag in 2010's latter two quarters. On the other hand, if consumer spending grew by less than personal income did, a bounceback could occur this quarter.

For an early look into the third-quarter manufacturing sector, investors and economists will have July factory reports from regional Federal Reserve banks in Dallas, Kansas City and Richmond and from the Institute for Supply Management in Chicago due out Friday. The Chicago PMI is a good leading indicators for the ISM manufacturing and services PMI's and is expected to weaken to 56.1 from 59.1. Still, a level above 50 indicates expanding activity. The Richmond Fed, which comes out earlier in the week is also expected to decrease.