Markets closed flat after a short trading session on Christmas Eve. There was an unexpected drop in unemployment claims last week. The Labor Department announced that people filing for unemployment benefits fell 9,000 to a seasonally adjusted 280,000. This is the lowest rate in seven-weeks for unemployment claims. Chris Rupkey, chief financial economist with MUFG Union Bank, said, “The labor market is tightening up. Any job losses are just normal frictional unemployment in a healthy growing economy.” There was also a large drop in the four-week moving average of 8,500 to 290,250. This is a more reliable gauge of unemployment claims as it takes out large weekly swings.
Shares of Exxon Mobil (XOM) closed lower after oil prices dropped again. Crude oil prices dropped as much as $2 per barrel to levels around $55. There was also a surprise increase in U.S. inventories. The Energy Information Administration said that supplies were up by 7.3 million barrels last week to a record high during the month of December. Economist had projected a 2.3 million drop. Phil Flynn, an analyst at Price Futures Group, said, “It’s a Christmas flood of oil at a time when refiners and producers usually are letting inventories get lower for end-of-year tax reasons, but with this flood of supply there’s no place to put it.”
In more recall news, the high-end London based vehicle maker, announced yet another recall. This will affect 7,256 cars. The recall is being placed due to a faulty electronic module in the front seats. There is a chance they that passenger seat heating mechanism could not turn off. This would cause the seats to become hot enough of overheat and smolder. The years being recalled range from 2006-2014 and include models DB9, V12 Vantage, V8 Vantage, DBS and Virage.
That’s all for today,
Warren Gates, Normandy Research