IBD/TIPP Economic Optimism Index Falls To Yearly Lows

Key Insights

• IBD/TIPP Economic Optimism Index fell from 41.3 in July to 40.3 in August. 
• U.S. Dollar Index tests session highs as demand for safe-haven assets grows. 
• SP500 is under strong pressure after Moody’s downgraded U.S. banks. 

On August 8, traders had a chance to take a look at IBD/TIPP Economic Optimism Index report for August. The report indicated that IBD/TIPP Economic Optimism declined from 41.3 in July to 40.3 in August, compared to analyst consensus of 43.

The IBD/TIPP Economic Optimism Index fell to its lowest level in more than one year. Interestingly, inflation concerns were an important driver for the pullback of IBD/TIPP Economic Optimism index, while recession fears waned.

All three major subindexes of the IBD/TIPP Economic Optimism Index declined. Personal finances fell to the lowest level since November. Support for federal economic policies and the six-month outlook for the U.S. economy have also moved lower.

U.S. Dollar Index tested session highs after the release of IBD/TIPP Economic Optimism Index report. The American currency is moving higher despite rising Treasury yields. Higher demand for safe-haven assets supports the U.S. dollar.

Gold pulled back towards the $1925 level as traders focused on stronger dollar and higher Treasury yields. Rising demand for safe-haven assets provided limited support to gold markets today.

SP500 tested session lows below the 4475 level as traders reacted to the report. Major indices are moving lower as Moody’s downgraded U.S. banks. The disappointing report may serve as an additional bearish catalyst for SP500, NASDAQ, and Dow Jones.

For a look at all of today’s economic events, check out our economic calendar.