Depending on the day, or even the hour, the global economic outlook sounds either encouraging or discouraging. 

Yesterday, it sounded discouraging with Moody's cutting Ireland to junk status and policymakers in Europe seemingly fumbling over how to craft a solution to contain the eurozone debt crisis.  Today, it sounds encouraging as China reported a batch of stronger-than-expected economic data, highlighted by 9.5% growth from a year earlier in Q2 GDP and a 15.1% increase in industrial production for June.

The headlines out of China have reportedly mitigated fears of a hard landing there, which only days ago were prominent after China reported higher-than-expected consumer price inflation for June.

The S&P futures are 0.4% above fair value, so the market should get off to a good start at least in the first hour of trading.  After that, it will go where the latest headline with global reach suggests it should go -- and there will be such headlines with Fed Chairman Bernanke testifying before the House Financial Services Committee at 10:00 a.m. ET on monetary policy and the state of the economy.

Yesterday, we got a kick out of reports that the market spiked after the minutes from the June 22 FOMC meeting revealed the committee might have to consider providing additional monetary policy stimulus depending on how economic conditions evolve.  It was particularly amusing knowing that the aforementioned thought was immediately followed by an acknowledgment that economic conditions might evolve in a way that warrants the committee taking steps to begin removing policy accommodation sooner than currently anticipated.

Well, duh.  The Fed chairman has said incoming economic data will dictate policy decisions, yet some traders apparently took the thought of QE3 and ran with it as if it was some new revelation and a clear conclusion.

Let's be clear.  Nothing is clear right now as it relates to the monetary policy outlook.  If it was, the Fed wouldn't have to talk in "on the one hand and on the other hand" terms.  The Fed also wouldn't be in the same position the rest of us are, which is in a wait-and-see mode with each passing economic report.

Strikingly, there are some mixed messages on the economic front that are making it challenging to get a good read on things (e.g. strong ADP report, weak employment report... weak regional manufacturing surveys, strong ISM index... weak wage growth, but continued expansion in household spending).

Today, we see the same mixed-up chameleon in China, the same mixed-up state of things in dealing with the eurozone debt crisis, and the same mixed-up debate about raising the U.S. debt ceiling.

It is little wonder that the equity market is trading in a mixed-up fashion (i.e., feeling good one moment and feeling bad the next).  It is also little wonder to see trading volume remain relatively light.

Financial markets are mixed up right now as the attention to macro headlines and scary-sounding scenarios are overriding otherwise good fundamentals that offer attractive, long-term return potential for patient-minded investors.

Give it an hour or two and those fundamentals might resonate again -- or not.  Said another way:  expect the choppiness to continue.

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is the Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial please email researchsales@briefing.com.