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 As massive the selloff was in global financial markets in the wake of June 23’s “Brexit” vote in the U.K., so was the reversal in equities after investors took a deep breath to more fully gauge what Britain’s departure from the European Union means.
The U.S. stock bellwether S&P 500 composite index plunged 5.3 percent Friday June 24 and Monday into negative territory on a year-to-date basis but has risen 5.2 percent over the past three full trading sessions and today’s as of 12:30 p.m. to go back above the YTD gain line.
In conjunction, Executive Mosaic’s GovCon Index of 30 defense and government contracting stocks fell 4.7 percent over the first two post-Brexit trading days then has swung back up 5.2 percent from Tuesday’s open into midday Friday.
On a year-to-date basis, the GCI has climbed 10.6 percent on investor confidence in the long-term stability of defense and government spending worldwide and belief activity in the sector will increase in a heightened global security environment.
Many of the usual prime suspects have led the GCI’s charge this week with Lockheed Martin, General Dynamics, Northrop Grumman, shipbuilder Huntington Ingalls Industries and medical supply contractor McKesson as among the Index’s top net gainers.
Newport News, Virginia-based Huntington Ingalls hit new 52-week highs during intraday trade both Wednesday and Thursday, while Lockheed and Northrop reached that benchmark Thursday, as did the government services contractor Vectrus that spun out of Exelis in September 2014.
TheStreet.com’s Lou Whiteman argued this week that the defense and GovCon sector is also place of refuge due to relative long-term stability of U.S. military spending and other factors here:
“Most all big-ticket defense items sold overseas are priced in U.S. dollars, further minimizing defense exposure to ‘Brexit’ ramifications, and any economic decline in the region could arguably necessitate higher U.S. government European defense spending, offsetting any order weakness.”
In other words, defense can be a very good offensive play for your investments.
THE WEEK’S OTHER TOP 10 GOVCON STORIES
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As massive the selloff was in global financial markets in the wake of June 23’s “Brexit” vote in the U.K., so was the reversal in equities after investors took a deep breath to more fully gauge what Britain’s departure from the European Union means.
TheStreet.com’s Lou Whiteman 
