Executive Mosaic’s GovCon Index started February on a losing note, ending lower Friday at $4,805.44 (-0.10%) following a fourth daily loss in five trading sessions. The week also saw breakouts of individual constituents and steep losses by defense stocks.
The index, which tracks the stock performances of 30 major government contractors, lost -1.83% week-on-week for its third consecutive weekly loss since the last two weeks of January. GCI is down -0.67% year-to-date. Trump tariffs and no rate cut by the U.S. Feds were the headwinds on Wall Street. The top three benchmarks registered weekly losses.
Top Decliners
Thursday was the worst day as 23 GovCon Index stocks underperformed leading to a -1.77% negative return. HII (NYSE: HII) plunged -18.32% after reporting lower year-over-year earnings in Q4 and full year 2024. Maximus (NYSE: MMS) tanked -7.89%, while Honeywell (NYSE: HON), Mercury Systems (Nasdaq: MRCY) and Kratos Security & Defense Solutions (Nasdaq: KTOS) declined more than 5%.
Military shipbuilder HII (+5.47%) topped 10 gainers on Friday but is the week’s worst performer with -14.58%.
Breakout Stocks
Palantir Technologies (Nasdaq: PLTR) shone brightest following a +23.99% gain on Tuesday to $103.83 and a +34.38% weekly gain. The AI stock settled at $110.85 to end the week and is now up +46.57 year-to-date.
Mercury Systems was Friday’s worst performer with -4.20%, although it still advanced +8.78% in five days due to the +18.51% explosion on midweek. V2X (NYSE: VVX) and AeroVironment (Nasdaq: AVAV) lost for the week despite the +7.04% and +7.60% jump on Monday and Tuesday, respectively.
Strong Economy
Market analysts see the U.S. tariff war against trading partners as the biggest overhang on Wall Street. The lower-than-expected 143,000 new jobs in January compared to 307,000 in December also show a slowdown in the job market. However, the 2.3% annualized Gross Domestic Product or GDP growth in Q4 2024 and anticipated above-trend growth in Q1 2025 indicates a strong economy.
