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January 31 Market Report: Executive Mosaic’s GovCon Index and Major Indexes Skid, High Rates to Stay and March Cut Unlikely

January 31 Market Report: Executive Mosaic’s GovCon Index and Major Indexes Skid, High Rates to Stay and March Cut Unlikely

Executive Mosaic’s GovCon Index slipped 0.87% to $4,609.38 as major indexes hit session lows. Investors’ mood soured after the Feds held rates steady and dashed hopes of a March cut. The Dow Jones Industrial Average lost 317.01 points (-0.82%), while the S&P 500 (-1.61%) and Nasdaq Composite (-2.23%) fell sharply.

Federal Reserve Chairman Jerome said in the post-FOMC meeting news conference that a rate cut in March is probably not the most likely case. The policymakers need to see “greater confidence” that inflation is on a sustainable path toward its 2% target. Thus, the benchmark lending rate stays at 5.25% to 5.50% until further notice.

Mega-cap tech stocks pulled down Nasdaq, with Google parent company Alphabet (Nasdaq: GOOG, GOOGL) losing more than 7% due to the reported weak ad revenues and margins. The ten-year Treasury yield didn’t top 4%. Instead, it dropped to as low as 3.9435% on Wednesday.

On the GovCon Index, Boeing (NYSE: BA) popped 5.29% after losses in Q4 2023 thinned 95% to $30 million versus the $663 million net loss in Q4 2022. Also, the total company backlog reached $520 billion last year, and free cash flow climbed 94% year-over-year to $4.4 billion.

Four other GovCon stocks advanced, with a less than 1% gain, including Northrop Grumman (NYSE: NOC) and RTX (NYSE: RTX). Palantir Technologies (NYSE: PLTR) and Tetra Tech (Nasdaq: TTEK) led the 25 decliners. Palantir, GCI’s top performer in 2023, will report earnings for the fiscal quarter ending December 2023 on Feb. 5, 2024, after the market close.

All the major averages posted gains in January despite the mid-week decline. Still, the timing of the first rate cut, a tailwind for stocks, is unknown. Powell said the Feds have not yet achieved a soft landing and are not declaring victory.  

Market Summary

INDEX PRICE NET CHANGE % CHANGE
GovCon Index Daily Total 4,609.38 -40.20 -0.87%
Dow Jones Industrial Average 38,150.30 -317.01 -0.82%
S&P 500 4,845.65 -79.32 -1.61%
NASDAQ 15,164.01 -345.89 -2.23%

Top 5 GovCon Index Daily Percentage Performers

SYMBOL PRICE NET CHANGE % CHANGE
BA 211.04 10.60 5.29%
NOC 446.76 3.26 0.74%
RTX 91.12 0.52 0.57%
GIB 111.82 0.61 0.55%
CACI 343.73 0.86 0.25%

Top 5 GovCon Index Daily Net Performers

SYMBOL PRICE NET CHANGE % CHANGE
BA 211.04 10.60 5.29%
NOC 446.76 3.26 0.74%
CACI 343.73 0.86 0.25%
GIB 111.82 0.61 0.55%
RTX 91.12 0.52 0.57%

Top 5 GovCon Index Daily Percentage Decliners

SYMBOL PRICE NET CHANGE % CHANGE
PLTR 16.09 -0.65 -3.88%
TTEK 158.18 -5.83 -3.55%
MMS 81.12 -2.84 -3.38%
BAH 140.77 -3.91 -2.70%
MRCY 29.66 -0.78 -2.56%