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January 12 Market Report: Executive Mosaic’s GovCon Index Bounces Back, Nearly All Constituents Advance

January 12 Market Report: Executive Mosaic’s GovCon Index Bounce Back, Nearly All Constituents Advance

Executive Mosaic’s GovCon Index surged 1.46% to $4,639.99 and upstaged the major indexes. The Dow Jones Industrial Average inched lower (-0.31%), while the S&P 500 (+0.08%) and Nasdaq Composite (+0.02%) posted modest gains. Still, moderating inflation and corporate earnings could buoy the markets this week and after.

UnitedHealth Group (NYSE: UNH) and Boeing (NYSE: BA) dragged the blue-chip Dow Jones down after falling 3.3% and 2.2%, respectively. The health insurer reported higher medical costs, while a class-action lawsuit was filed against the aircraft manufacturer. 

Nearly all GovCon Index constituents advanced except for Boeing and Honeywell International (NYSE: HON). Notably, six GCI stocks gained more than 2% and most are defense companies. Kratos Defense & Security Solutions (NYSE: KTOS), Northrop Grumman (NYSE: NOC), Parsons (NYSE: PSN), and L3 Harris Technologies (NYSE: LHX) led the 28 gainers.  

The ten-year Treasury note ticked lower to 3.946% and the two-year yield sunk to 4.150%, the lowest since May 2023. Also on Friday, the Bureau of Labor Statistics reported that the producer price index in December fell 0.1%, the third straight monthly decline. Data also showed wholesale inflation closed in 2023 at 1%. The latest PPI release coincided with the start of the earnings season. 

Financial institutions reported the first wave of earnings, although most bank stocks finished lower due to missed consensus estimates, higher provision for credit losses or a net loss. However, global asset manager BlackRock (NYSE: NRK) beat fourth-quarter earnings expectations.

Expect investors to focus on corporate earnings in the weeks leading to the Federal Open Market Committee meeting on January 30-31, 2024. Several Federal Reserve officials are due to speak this week. Favorable corporate profits and the possible start of rate cuts are tailwinds for the stock market.

Market Summary

GovCon Index Daily Total 4,639.99 67.61 1.46%
Dow Jones Industrial Average 37,592.98 -118.04 -0.31%
S&P 500 4,783.83 3.59 0.08%
NASDAQ 14,972.76 2.57 0.02%

Top 5 GovCon Index Daily Percentage Performers

KTOS 18.96 0.55 2.99%
NOC 481.08 13.74 2.94%
PSN 65.22 1.73 2.72%
LHX 207.8 4.88 2.40%
ACN 356.33 8.36 2.40%

Top 5 GovCon Index Daily Net Performers

NOC 481.08 13.74 2.94%
LMT 463.18 10.05 2.22%
ACN 356.33 8.36 2.40%
LHX 207.8 4.88 2.40%
GD 254.81 4.87 1.95%

Top 5 GovCon Index Daily Percentage Decliners

BA 217.7 -4.96 -2.23%
HON 201.1 -0.57 -0.28%
GIB 106.84 0.10 0.09%
FLR 37.66 0.06 0.16%
CG 39.36 0.09 0.23%