Executive Mosaic’s GovCon Index declined 0.11% to end lower at $4,735.44 for the second straight day. Wall Street barely moved from mid-week, although the Dow Jones Industrial Average (+0.06%) ended in positive territory. The S&P 500 (-0.22%) and Nasdaq Composite (-0.52%) stayed in the negative zone.
The ten-year Treasury yield rose to 4.64% as rate cut uncertainties continue to exert pressure on stocks. Besides inflation risks, the rising tension in the Middle East enhances volatility. Meanwhile, market analysts believe increased military spending on weapons systems, the regional turmoil, and Iran’s missile attack on Israel will impact defense stocks.
Advancers and decliners on the GovCon Index Thursday were even, 15-15. Mercury Systems (Nasdaq: MRCY) and V2X (NYSE: VVX) led the gainers, while BAE Systems topped the underperformers. V2X announced late Wednesday that it was selected as one of the six prime contractors for the $2 billion U.S. Navy’s Global Contingency Services Multiple Award Contract III.
The GCI could see a dramatic movement next week when prime defense contractors, led by Lockheed Martin (NYSE: LMT), RTX (NYSE: RTX), General Dynamics (NYSE: GD), and Northrop Grumman (NYSE: NOC), report their quarterly earnings. Many expect margin growth to be the highlight during the presentations. Boeing (NYSE: BA) will report before the market opens next Wednesday.
JP Morgan (NYSE: JPM) analyst Seth Seifman upgraded Lockheed Martin this week from “hold” to “buy” before its earnings date on April 23. LMT manufactures Israel’s F-35s. Published reports early Friday said Israel launched a retaliatory missile attack on Iran.
During Semafor’s World Economy Summit on April 18, New York Fed President John Williams said that the Feds need to see more progress on inflation before bringing down borrowing costs. “Interest rates will need to be lower, at some point, but the timing of that is driven by the economy,” he added.
Market Summary
| INDEX | PRICE | NET CHANGE | % CHANGE |
|---|---|---|---|
| GovCon Index Daily Average | 4,735.44 | -4.27 | -0.09% |
| Dow Jones Industrial Average | 37,775.38 | 22.07 | 0.06% |
| S&P 500 | 5,011.12 | -11.09 | -0.22% |
| NASDAQ | 15,601.50 | -81.87 | -0.52% |
Top 5 GovCon Index Daily Percentage Performers
| SYMBOL | PRICE | NET CHANGE | % CHANGE |
|---|---|---|---|
| MRCY | 28.31 | 0.85 | 3.10% |
| VVX | 46.99 | 0.74 | 1.60% |
| ACN | 316 | 1.46 | 0.46% |
| CACI | 364.06 | 1.55 | 0.43% |
| TXT | 92.58 | 0.37 | 0.40% |
Top 5 GovCon Index Daily Net Performers
| SYMBOL | PRICE | NET CHANGE | % CHANGE |
|---|---|---|---|
| CACI | 364.06 | 1.55 | 0.43% |
| ACN | 316 | 1.46 | 0.46% |
| MRCY | 28.31 | 0.85 | 3.10% |
| GD | 285.27 | 0.81 | 0.28% |
| VVX | 46.99 | 0.74 | 1.60% |
Top 5 GovCon Index Daily Percentage Decliners
| SYMBOL | PRICE | NET CHANGE | % CHANGE |
|---|---|---|---|
| BAESY | 65.1 | -1.67 | -2.50% |
| CG | 43.68 | -0.95 | -2.13% |
| ICFI | 138.09 | -1.98 | -1.41% |
| SAIC | 123.18 | -1.50 | -1.20% |
| FLR | 39.21 | -0.39 | -0.98% |
