Gold

Every week, my father insists on sending me his weekly updates on the market.  These updates are intended for his colleagues at Grosvenor, who are specialist developers, investors and fund managers in several sectors – residential, retail, office and industrial property.  Until recently I would just ignore the updates – attempting to understand the meaning of the colourful lines and pie charts only confused me more.  Considering that my fathers title is “senior director, research and investment strategy” of the North America department, the update specifically deals with the Canadian and American market in all aspects.

Fortunately I have been able to take things out of the classroom and do my best to understand this gibberish.  I know – my parents must be so proud…

Here is my first attempt at fully attacking and understanding the weekly pdf file that has haunted my inbox for the last year or two.

Included in this update:

The Federal Reserve raised its discount rate – the rate it charges banks for temporary loans.  This occurred on Thursday by 25 basis points to .75%, which was noted as the first increase since June 2006.  On top of this the Fed commented that they intend to keep the rate low for an “extended period” of time in order to push the banks to rely more on money markets for credit rather than the Fed itself.

Secondly the report compares consumer prices in both countries.  In America, prices only rose by 0.2% in January from December.  This number is less than the forecast and an indicator that the “pace of recovery is not fuelling inflation”.  The CPI is now 2.7% higher than where it stood one year ago.  The Canadian consumer price also rose.  The .4% jump in January from December, and 1.9% annual rise is thought to be due to gasoline prices.

Canadian retail sales rose .4% in December, after their decline of .5% in November.  This adds up to a 6.7% increase from one year ago.

US “housing starts” rose in January by 2.8% with an annual increase of 21.1%.  This increase follows the .7% decline in December.

Finally, the Canadian government announced “tighter standards” for mortgages to take effect beginning April 19th, 2010.  This is a response to a housing market that has shown strong improvement since last Spring.  Consequently there exists a fear of a “housing bubble”.

Being able to interpret the numbers and lingo is the next thing on my to-do list.   Maybe that will come to me next week – for now thats my updated update.