Executive Mosaic’s GovCon Index tanked 2.64% to $4,822.05 for its second-worst single-day performance since the launch. Major US benchmarks also plunged midweek despite a rate cut announcement. The Nasdaq Composite and S&P 500 fell -3.56% and -2.95%, while the Dow Jones Industrial Average (-2.58%) closed at a six-week low besides logging its tenth straight daily loss.
Lone gainer
The GovCon Index’s worst day was Nov. 14, 2024, when it fell 6.2% on news of potential policy changes in the government contracting industry under the Trump administration. It has been a bumpy road since for GCI stocks, leading to two straight weekly losses in December. The index has lost 6.6% overall since the start of the month.
Only HII (NYSE: HII) was in positive territory with +0.49% at the closing bell. Kratos Defense & Security Solutions (Nasdaq: KTOS) and Fluor Corporation (NYSE: FLR) declined more than 6% to lead 29 decliners. Five other stocks, including V2X (NYSE: VVX), sunk between 4.8% and 5.5%.
Also, midweek, the US Navy awarded prime defense companies new contracts and a modification. Northrop Grumman Systems, a major business of Northrop Grumman (NYSE: NOC), received a $3.45 billion cost-plus-incentive-fee contract for the development of the E-130J aircraft or ‘doomsday’ plane to support the Take Charge and Move Out, or TACAMO, Recapitalization Program.
Lockheed Martin Rotary and Mission Systems, a Lockheed Martin (NYSE: NOC) business segment, obtained a $196.1 million cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract relating to the system design and development supporting the Tactical Tomahawk Weapons Control System.
General Dynamics (NYSE: GD) secured a $62.6 million modification to exercise options on a previously awarded contract for USS Porter fiscal 2025 Extended Dry-dock Selected Restricted Availability.
Lone dissenter
The US Federal Reserve reduced its policy rate by 0.25% as expected. However, Cleveland Fed president and ex-Goldman Sachs (NYSE: GS) executive Beth Hammack voted against lowering the benchmark rate. The lone dissenter said, “I believe we are at or near the point where it makes sense to slow the pace of rate reductions.”
Chairman Jerome Powell intimated in the post-FOMC meeting press conference two cuts only, not four, in 2025. “With today’s action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive,” Powell said. Still, the markets reacted negatively to the rate forecast.
Market Summary
| Index | Price | Net Change | % Change |
|---|---|---|---|
| GovCon Index Daily Average | 4,822.05 | -127.34 | -2.64% |
| Dow Jones Industrial Average | 42,326.87 | -1123.03 | -2.58% |
| NASDAQ | 19,392.69 | -716.37 | -3.56% |
Top 5 GovCon Index Daily Percentage Performers
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| HII | 194.44 | 0.95 | 0.49% |
| MMS | 70.07 | -0.13 | -0.19% |
| BA | 172.62 | -0.41 | -0.24% |
| MRCY | 38.07 | -0.17 | -0.44% |
| BAESY | 58.77 | -0.60 | -1.01% |
Top 5 GovCon Index Daily Net Performers
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| HII | 194.44 | 0.95 | 0.49% |
| MMS | 70.07 | -0.13 | -0.19% |
| MRCY | 38.07 | -0.17 | -0.44% |
| BA | 172.62 | -0.41 | -0.24% |
| BAESY | 58.77 | -0.60 | -1.01% |
Top 5 GovCon Index Daily Percentage Decliners
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| KTOS | 25.51 | -1.74 | -6.39% |
| FLR | 50.11 | -3.34 | -6.25% |
| VVX | 53.11 | -3.08 | -5.48% |
| CG | 48.97 | -2.81 | -5.43% |
| CW | 344.85 | -19.64 | -5.39% |
