At this time, the estimated growth rate for the third quarter 2008 stands at 0.8%. On April 1, the estimated growth rate for third quarter 2008 was 17.3%. On July 1, the estimated growth rate was 12.6%.

If the final growth rate for third quarter 2008 is 0.8%, it will mark the first quarter the S&P 500 has recorded earnings growth since the second quarter of 2007 (7.7%).

Since the start of the quarter, most of the decrease in the third quarter 2008 growth rate (to 0.8% from 12.6%) can be attributed to downward estimate revisions in the Financials sector.

At the sector level, the Energy (60%) sector is expecting the highest earnings growth in Q3 2008. The financials (-49%) and Consumer Discretionary (-7%) sectors are expecting the weakest earnings growth.

(Ed’s note: John Butters is director, U.S. earnings for Thomson Reuters Proprietary Research Group. To see the full research on the outlook for third quarter earnings expectations, download the PDF here:

The economy is a key issue in the presidential election, but Congress should hold off on a second economic stimulus package for now, a top supporter of Senator John McCain said Thursday.

“In states like Ohio, I think that jobs and the economy is the first issue and will be right through the election,” said Rob Portman, formerly a Republican congressman from Ohio, White House Budget Director and U.S. Trade Representative.

“One of the concerns I’ve had is that we continue to deepen our deficit for this year and therefore our debt over time by having another stimulus package before we even have the final checks going out under this stimulus package and see what some of the economic feedback is. I think it’s better to take our time, do the right thing and be sure we are addressing the key problems that we might see pop up this fall,” Portman said in an interview with Reuters.

Former House Speaker Newt Gingrich says economic issues will play an increasing role in the campaign for president between John McCain and Barack Obama.

“I think that Senator Obama is going to argue for bigger government, higher taxes and more regulation. I suspect that Senator McCain is going to argue for lower taxes, less regulation,” Gingrich said in an interview with Reuters.

“Senator Obama will argue that government bureaucracies can accomplish a lot of good things for the economy. Senator McCain will argue that entrepreneurs and small business are the key to the economy. And the country is going to have to choose which of those two solutions it thinks will work,” Gingrich said.

President John McCain would use his “maverick” status to strengthen the value of the dollar by bringing fiscal responsibility to the federal government, a top advisor to the Republican presidential candidate’s campaign said Thursday.

Tim Kane said the value of the dollar is based on psychology and convincing investors that the world’s largest economy will have a balanced budget.

“Why would people lose confidence in the US’ ability to pay its debts? Because they’ve lost confidence in the Congress’ ability to have a balanced budget,” Kane said in an interview with Reuters on the fourth day of the Republican National Convention.

“McCain is a different kind of animal. He really is a maverick and he is going to change that culture,” Kane said.

The dollar has lost roughly a third of its value since President George W. Bush took office.

Commerce Secretary Carlos Gutierrez tells Corbett B. Daly, Washington Bureau Chief of Thomson Reuters Markets, that the U.S. economy is “going through a difficult time, there is no question.”

With emerging market stocks taking a beating, now would not seem to be an obvious time to launch new equity funds for the asset class. Benchmarker MSCI’s main emerging market stock index, after all, has lost more than a quarter of its value so far this year and concerns about the U.S. economic slowdown spreading are rife.

Despite this, U.S. investment manager Putnam says it is set to launch two new emerging market equity funds in October - one for U.S. investors, the other for Europeans. Is this perverse or prescient?

Putnam, of course, reckons it is the latter. During a chat with Reuters in London, Boston-based officials said the move reflected the long-term outlook for emerging markets which has not changed during the current market ructions. Growth projections for emerging economies remain far more attractive for equities than do those for developed markets, said Matthew Scales, a senior investment product manager.

His colleague, currency chief Parker King, went further. He said that despite a decade long slump in the 1990s in Japan, anyone investing there after World War II would still have made far more money than they would have in U.S. stocks. A lot of this, he said, was because of currency appreciation and that would happen in emerging economies too. “The mantra out there right now is just insane for emerging markets,” he said.

It’s been three years since the International Association of Machinists and Aerospace Workers last agreed to a contract with Boeing, the end result of a strike at the aerospace company that lasted about a month.

Boeing said the 2005 strike caused it to deliver 29 fewer planes than expected that year, translating to about $2 billion in lower revenue.

Ahead of the long weekend, the IAM rejected Boeing’s “best and final”. Now the scenario is playing out for another confrontation, with one difference: Boeing’s popular 787 Dreamliner program has no more room for delays.

The first deliveries of the new, composite-built jetliner have been delayed three times, and is already about 15 months behind schedule.

Union negotiators have urged a vote for a strike on Wednesday - a simple majority is needed to reject the contract and a two-thirds majority is needed to OK a strike. The odds of a walkout are not as dire as they seem. Boeing “has too much at stake to allow a strike,” Credit Suisse analysts said Tuesday.

“Whereas one week ago we thought a strike was likely, we now believe one is unlikely,” Wachovia analysts said. That happier outlook was prompted, in part, by Boeing’s $2,500 first-vote ratification bonus offer. It’s payable only if the contract is approved by Wednesday. “Avoiding a work stoppage improves the chance (though hardly ensures) that another 787 delay could be avoided,” the analysts told clients.

Boeing, in an attempt to speak directly to union members, posted details of the final proposal online.

The price of oil was falling sharply on Tuesday after traders stopped worrying about former Hurricane Gustav’s winds, but by at least one calculation it remains very pricey - that is, its link to the price of gold.Some market watchers argue that there is a long-term relationship between the prices of the two commodities. Roughly speaking, this theory would have 10 barrels of crude oil costing the same as one ounce of gold.  Back in March, for example, gold hit a record of $1,030 an ounce and a barrel of oil brought around $105.

By July, however, gold had fallen and oil had risen to the extent that the ratio was not 10 to 1, but 5.9 to1. Some argued at the time that hedge funds noticed this and began to short crude. With the latest tumble, oil is about 27 percent below its high. But against gold, the ratio is still at 7.4 to 1.

The problem is that gold won’t stop falling either, which rather undermines the ratio theory. Perhaps it is all just hooey. If it is not, however, oil would have to dive another 25 percent to reach equilibrium of $79 a barrel against today’s gold price.

As George Bush might say, the EU is addicted to Russian energy. While no member wants to kick the habit totally, Brussels would like the bloc to reduce its growing dependence.

Even before Moscow invaded Georgia, the main non-Russian route for exporting Central Asian and Azeri crude and gas to Europe, the EU watched Russia’s regular cuts in energy supplies to neighbours with concern.

But EU members have been reluctant to take the hard measures that would allow them to bypass Russia, so analysts think their reliance on Moscow will grow.

What should European countries to ensure it has sufficient oil and gas in the future? 

Should EU nations be prepared to put cash behind its energy diversification goals?

Is a common EU energy policy even possible when oil and gas is so important that no country seems prepared to risk its own energy security for that of the bloc?

When stock markets this morning traded the news that Allianz had sold Dresdner Bank to Commerzbank, shares in both companies were down, defying stock market logic. Maybe nobody likes the deal?

Dresdner Kleinwort, the anaemic investment bank that raked up billions of credit write-downs, is not the jewel in the crown Commerzbank was looking for. Commerzbank slashed its own investment bank years ago and has said it will also scale down Dresdner Kleinwort.

Allianz is pulling the plug on bancassurance, a model that some say doesn’t work — though others have succesfully executed it. But the timing seems odd: selling a bank would probably have been a lot easier 18 months ago.

With a 30 percent stake in Commerzbank, it remains exposed to the banking sector in a substantial way. And it will need to put money aside for possible further writedowns.

To the up-side: overbanked Germany will have a second large bank, and a rival to Deutsche. Consolidation in the country is long overdue and the deal with Dresdner is a major step.

Investment bankers may cheer the fact there were some fees to be made in a rare banking deal. Though bankers at Dresdner Kleinwort — whose Kleinwort tag is one of the City’s most venerable — will have little to cheer, with thousands of job cuts announced.