Executive Mosaic’s GovCon Index registered its largest single-day loss this week and a massive 9.31% weekly loss. Besides the 6.2% plunge Thursday, the substantial gains (+4.7%) from the previous record-setting week were gone. The index, which tracks the stock performances of 30 major government contractors, closed 1.78% lower at $5,160.07 Friday.
Major U.S. stock benchmarks flashed red, marking the end of the post-election rally. The tech-heavy Nasdaq Composite (-3.15%) declined the most during the week, followed by the broader S&P 500 Index (-2.08%). The blue-chip Dow Jones Industrial Average (-1.24%) shed 544 points overall.
Weekly Performance
The GovCon Index suffered its worst beating in the week of Nov. 11 to 15. On Thursday, only Fluor Corporation (NYSE: FLR) out of 30 constituents, ended positive. Science Applications International Corporation (Nasdaq: SAIC) and KBR (NYSE: KBR) declined more than 14%, while ICF (Nasdaq: ICFI) led Friday’s 25 losers with -11.48%. Leidos (NYSE: LDOS) lost -13.6% on Thursday and -19.24% in five days.
Palantir Technologies (NYSE: PLTR), GCI’s top performer thus far in 2024, popped 11.14% to $65.77 before the weekend and advanced 12.64% in five days. The big data analytics firm announced moving its listing to the Nasdaq 100, effective Nov. 26. As of mid-November, the AI stock is up 283.05% year-to-date compared to the +10.53% of the GovCon Index.
Restructuring of Federal Agencies
Market analysts said the uncertainty over the policy changes in the federal contracting industry in 2025 caused the selloff of defense and government contractor stocks. The Department of Government Efficiency’s plan to restructure federal agencies could lead to massive cuts for contractors. The newly formed advisory department’s task is to overhaul government spending.
