A Note From Our President & Founder Jim Garrettson
Thursday’s highly-anticipated and historic “Brexit” vote in the U.K. led investors all over the world and so many other interested stakeholders to speculate over the implications of Britain’s potential departure from the European Union.
Now that the British public has decided to proceed with a Brexit, investors are looking for safe haven investments to protect against volatile markets that have swung all throughout June on speculation over how the U.K. referendum would go.
Government and defense contracting sector stocks have also felt the London-driven headwinds also despite the unique nature and drivers of this industry much discussed in this space and highlighted by many analysts that view GovCon as a relatively insulated arena compared to other arenas.
As of this publication’s send, the GovCon Index had fallen 2.4 percent in intraday trade as of 2 p.m. Friday and was on pace to register a weekly decline of nearly a full percent.
By comparison, the S&P 500 composite index that contains 11 GCI stocks plunged 2.9 percent as of mid-afternoon to show a 1-percent decline from the Friday close.
The GCI rose 3.2 percent over June’s first seven days as polls leaned toward the U.K. staying in the EU, then registered a-2.6 percent fall leading into the start of this week when those same surveys indicated the British public leaning slightly toward a departure.
Over this week, the GCI held flat over three days on investor uncertainty than rose nearly one-half percent Thursday on confidence the U.K. would not go ahead with the Brexit before the Friday plunge along with every major U.S. and European stock benchmark.
Two GovCon Index stocks emerged as clear outliers over all the rest that were dragged into deep red in the form of Lockheed Martin and Raytheon, respectively up 64 and 67 cents after mid-morning spikes to 1-percent gains for each.
BAE Systems PLC suffered the brunt of post-Brexit trade as its shares in the U.S. over-the-counter market plunged 12.73 percent as of mid-afternoon Friday, while the British defense contractor’s stock on the London exchange closed down 4.6 percent.
Some short-term effects from the Brexit are clear but the long-term implications on GovCon will become clearer as U.S.-based contractors with significant global footprints determine what the move means for their operations across the Atlantic Ocean as investors get another gauge to determine the industry’s financial health.
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GovCon Wire is changing its coverage of the GovCon Index and major indices. GovCon Wire will now be providing weekly performance analysis instead of the daily for the GovCon Index, S&P 500, Dow Jones Industrial Average and NASDAQ Composite. In reviewing the past weeks market performance the Executive Mosaic GovCon Index (GCI) ended the week up 0.789
The Executive Mosaic GovCon Index (GCI) continued its strong performance gaining 1.144 percent to set a new high of 108.47 with advancing shares outpacing declining 28 to 2. The markets started off the fourth quarter on a strong note with all three major indices reaching new record highs. The S&P500 was up 0.39 percent to 2,529.12, while the DJIA closed
The Executive Mosaic GovCon Index (GCI) ended the week with two consecutive days of positive moves. The GCI closed on Friday at 98.338, up 0.149 percent, hitting a weekly high. The top five positions on the GCI were held by manufacturing companies. All the major indices closed marginally down Friday with the S&P500 at 2,472.54, while DJIA