Why Investors Will Keep Up a 'Dash for Trash'

Gold last traded at $1,722 an ounce. Silver at $25.85 an ounce.

NEWS SUMMARY: Precious metal prices dipped Thursday as rising inflation boosted interest rates and the dollar. U.S. stocks fell as bond yields jumped and rising rates sapped the momentum of a tech stock rebound.

Institutional Investor---"Investors will keep reaching for riskier assets to get returns in a U.S. economy poised for growth this year, according to Natixis Investment Managers.

The 'dash for trash' will continue, Jack Janasiewicz, portfolio manager and strategist at Natixis Investment Managers, predicted Tuesday during the firm's web event discussing markets amid the easing Covid-19 crisis. Financial conditions are 'highly accommodative,' he said, adding that 'it's tough to see anything but a continued stretch for risk assets.'

At the same time, some investors worry that massive fiscal stimulus and easy monetary policy could stoke high inflation, according to Janasiewicz. The Natixis portfolio manager said the concern often comes up in client conversations, particularly with the recent jump in Treasury yields, but that he isn't expecting a meaningful rise anytime soon....

The jump in yields reflects a positive outlook for U.S. growth as the world moves closer to ending the pandemic, according to Dwek. She pointed to the accelerating rollout of Covid-19 vaccines, the $1.9 trillion coronavirus relief package, and expectations for higher company earnings as reasons for investor optimism....

Meanwhile, financial conditions remain 'very, very loose,' which means companies have access to capital to avoid default, according to Janasiewicz. 'When you look at this all rolled up, you can still get your hands on money if you need it and are willing to pay up for it.'

Janasiewicz said he expects the Federal Reserve's monetary policy to remain easy, partly because of the slack that remains in the labor market. This, together with the fiscal support and a reopening of the economy, should bode well for investors, according to Dwek."