Executive Mosaic’s GovCon Index declined 0.74% to $4,810.82 and has lost 2.4% since the start of April. Wall Street sold off in reaction to the unfavorable inflation data. The S&P 500 (-0.95%) dropped to a three-low year, while the Dow Jones Industrial Average (-1.09%) shed 423 points and the Nasdaq Composite (-0.84%) closed lower.
Dow Jones component Home Depot (NYSE: HD) pulled back 3% because stubborn inflation and higher-for-longer interest rates could stall the housing market’s rebound. Real estate and most semiconductor stocks also tumbled after Wednesday’s inflation report. However, Meta (Nasdaq: META) edged 0.6% higher after the social media giant unveiled its newest custom AI chip.
The GovCon Index flashed red as 23 stocks finished in negative territory. Defense stocks Lockheed Martin (NYSE: LMT) and Northrop Grumman (NYSE: NOC) led the seven advancers. The worst performer, Accenture (NYSE: ACN), tumbled 3%.
Market analysts are bullish on Lockheed Martin following the announced partnership with Intel (Nasdaq: INTC) and its subsidiary Altera to support the Stimulating Transition for Advanced Microelectronics Packaging program for the research arm of the Department of Defense.
The U.S. Army awarded BAE Systems Information and Electronic Systems a $459.8 million order-dependent contract for AN/ARC-231/A Multi-mode Aviation Radio Suite hardware components, repair services and technical/engineering/logistic support.
CACI (NYSE: CACI) secured a $37.5 million indefinite-delivery/indefinite-quantity, cost-plus-fixed-fee, and firm-fixed-price type contract with the U.S. Navy. The three-year contract supports integrating and operating information operations payloads into unmanned aerial vehicles used by joint forces.
Accelerating inflation dampened investors’ sentiment and caused a downtrend. The Bureau of Labor Statistics’ inflation report released mid-week showed that the consumer price index rose to 3.5% in March from 3.2% in February. Core PCI was flat at 3.8%, while the ten-year Treasury yield rose to nearly 4.5%.
Because inflation is re-accelerating, some market analysts see no rate cuts in the foreseeable future. The Feds must see that inflation is moving sustainably towards its 2% target. Based on the CME FedWatch Tool, the odds of a June rate cut are 27% from 57.4%.
Market Summary
| INDEX | PRICE | NET CHANGE | % CHANGE |
|---|---|---|---|
| GovCon Index Daily Average | 4,810.82 | -35.77 | -0.74% |
| Dow Jones Industrial Average | 38,461.51 | -422.16 | -1.09% |
| S&P 500 | 5,160.64 | -49.27 | -0.95% |
| NASDAQ | 16,170.36 | -136.28 | -0.84% |
Top 5 GovCon Index Daily Percentage Performers
| SYMBOL | PRICE | NET CHANGE | % CHANGE |
|---|---|---|---|
| LMT | 451.71 | 4.14 | 0.93% |
| NOC | 457.91 | 3.25 | 0.71% |
| GD | 290.04 | 1.20 | 0.42% |
| FLR | 41.64 | 0.16 | 0.39% |
| HII | 275.15 | -0.35 | -0.13% |
Top 5 GovCon Index Daily Net Performers
| SYMBOL | PRICE | NET CHANGE | % CHANGE |
|---|---|---|---|
| LMT | 451.71 | 4.14 | 0.93% |
| NOC | 457.91 | 3.25 | 0.71% |
| GD | 290.04 | 1.20 | 0.42% |
| FLR | 41.64 | 0.16 | 0.39% |
| PSN | 80.27 | -0.21 | -0.26% |
Top 5 GovCon Index Daily Percentage Decliners
| SYMBOL | PRICE | NET CHANGE | % CHANGE |
|---|---|---|---|
| ACN | 324.4 | -10.05 | -3.00% |
| MRCY | 28.61 | -0.68 | -2.32% |
| VVX | 44.82 | -1.06 | -2.31% |
| GIB | 104.98 | -2.17 | -2.03% |
| BA | 174.63 | -3.49 | -1.96% |
