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By Jason Stipp | 07-29-2011 01:08 PM

Best of Times, Worst of Times

Morningstar markets editor Jeremy Glaser says GDP, housing, and corporate earnings tell a tale of two recoveries.

Jason Stipp: I'm Jason Stipp for Morningstar, and welcome to the Friday Five.

We're getting literary on the Friday Five this week and channeling Dickens with A Tale of Two Recoveries.

Joining me with the analysis is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for being here.

Jeremy Glaser: You're quite welcome, Jason.

Stipp: Well, it was the best of times and the worst of times this week. What do you have for the Friday Five?

Glaser: Well, let's start off with the worst of times with GDP and the debt ceiling. And then we'll take a look at some relative good news in the housing market, at Whole Foods, and at the oil supermajors.

Stipp: So we got some pretty dismal news on Friday, perhaps ... showing that we're not pulling out of the worst of times yet; GDP really came in under consensus. How bad was it?

Glaser: The GDP number this morning was not pretty. We had 1.3% growth in the second quarter. People expected it to be pretty bad; they were expecting 1.8%, which is hardly gangbusters growth, and it was even worse than that.

But also there were huge revisions back to previous growth that indicated things were much slower than we thought. For example, in the first quarter, it turns out we only grew 0.4%, and even going back farther, the economy looks much weaker than the government had initially expected or had initially reported.

And that's something that's kind of troubling. I think certainly we were kind of hoping that we were on a really good recovery path, and we might be seeing a slowdown, but that there was some fundamental growth. But it turns out that the economy is still very weak, and it's still very fragile.

Stipp: So, looking at Washington, it really feels like the worst of times. They are still at loggerheads. What's the latest on the debt ceiling, and are we any closer to any sort of agreement that we can hang our hats on?

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