Executive Mosaic’s GovCon Index closed 0.83% higher at $4,884.32 before the weekend. It was a rare second-straight daily gain in December but not enough to reverse course. The index, which tracks the stock performances of 30 major government contractors, lost 1.31% overall for the week following a sharp 2.64% drop on midweek.
On Wall Street, the Dow Jones Industrial Average advanced nearly 500 points Friday after ending its ten-day losing run on Thursday. Like the GovCon Index, the blue-chip index notched a third consecutive weekly loss this month. However, the Dow Jones declined 2.38% week-on-week. The broader S&P 500 (-2%) and tech-heavy Nasdaq Composite (-1.8%) were also negative for the week.
GovCon Index Top Performer
Palantir Technologies (Nasdaq: PLTR) shone brightest on the GovCon Index. Besides advancing +5.89% in five days and popping +8.54% Friday, the AI stock hit $80.55, a new closing high. The week’s worst performer, V2X (NYSE: VVX), tanked -12.18%.
On Thursday, Palantir Technologies announced a US Army artificial intelligence contract extension, raising the total contract value to $618.9 million. In addition to its AI platform, big data services are key growth drivers for the software and data analytics company.
The GovCon Index’s year-to-date gain is down to +4.62% after four consecutive weekly losses since the last week of November. It recorded 10 losses in 15 sessions in December. Meanwhile, the major US indexes achieved multiple records during the post-election rally. As of Dec. 20, 2024, the Nasdaq Composite, S&P 500, and Dow Jones are up +30.4%, +24.3%, and +13.7% year-to-date, respectively.
Anticipated Contracting Landscape Change
Market analysts expect the government contracting landscape to change in 2025, including budget priorities. The incoming administration said it will streamline operations and focus on efficiency and cost-savings. President-elect Donald Trump created and tasked the Department of Government Efficiency, or DOGE, to propose cost-effective solutions and optimize resource allocations.
The GovCon Index began its downturn in mid-November due to potential policy changes in the government contracting sector. GCI stocks have seven trading days left in 2024 to improve their gains.
