GovCon Index Notched 4th Straight Weekly Loss

Executive Mosaic’s GovCon Index struggled for most of December, with only seven daily gains in 19 trading days. The index, which tracks the stock performances of 30 major government contractors, declined 0.69% to $4,877.81 before the weekend. While the -0.13% overall loss from Dec. 23 to Dec. 27 was the lowest week-on-week decline this month, it was the fourth straight weekly loss. 

Wall Street’s Santa Claus rally began on Tuesday, Dec. 24. However, after the significant gains on Christmas Eve, all major US indexes settled on the flat line Thursday and closed in the red in the following session. Nonetheless, the Dow Jones Industrial Average (+0.4%), S&P 500 (+0.7%), and Nasdaq Composite (+0.8%) eked out weekly gains.

Headline GCI stock 

The GovCon Index posted gains before (+0.46%) and after (+0.41%) Christmas but lost steam on Friday. Except for Boeing (NYSE: BA) and BAE Systems, 28 GCI stocks underperformed. Palantir Technologies (Nasdaq: PLTR) lost 2% during the week, although the artificial intelligence stock hit an all-time high of $84.80 in intra-day trading on the 24th and then finished at $82.38, a new closing high.

Palantir remains the top-performing GCI stock. Its year-to-gain is +360.55%, besting NVIDIA’s (Nasdaq: NVDA) +176.74%. Some market analysts see the software and data analytics firm as the next Oracle (NYSE: ORCL) and Salesforce (NYSE: CRM). Dan Ives, global head of technology research at Wedbush Securities, said the company is “transforming the AI revolution” and is hard for rivals to compete with.

Final Stretch

Next week will be another holiday-shortened trading week. The markets will be closed on New Year’s Day, Jan. 1, 2025, but open with regular hours on Monday and Tuesday. The Santa Clause rally will culminate on Friday, Jan. 3.  

The GovCon Index has never risen above $5,000 since Dec. 16. Its year-to-date gain peaked at +20.82% in the second week of Nov. but is down to only +4.48%. With only two sessions remaining in 2024, the index needs to finish strong in the final stretch to hit $5,000 at least.