FOR much of July, investors have been taking positively to what they hope are rate cuts by the US Federal Reserve at the month's end, as well as hopes that US-China trade talks are getting back on track.

That said, there are concerns that markets are too optimistic about the extent of rate cuts and there are many issues yet to be ironed out between the US and China since the post-G20 truce. Charles Schwab's chief investment strategist Liz Ann Sonders noted: "Rather than climbing the proverbial 'wall of worry', the recent move seems to be more of the riding the escalator of optimism."

Following China's Q2 gross domestic product (GDP) release last week, it is now time to assess the US economic performance - Q2 US GDP is out on Friday - for the effect of trade war escalations on the US economy and on US corporate earnings.