The R&D Index: Market Watch for the week ending July 22, 2016 closed at 1,531.54 for the 25 companies in the R&D Index. The Index was up 1.22 percent (or 18.4 basis points) over the week ending July 15, 2016, or a gain of more than 8 percent over the past four weeks. Fifteen of the 25 R&D Index companies saw gains from Toyota (0.8 percent) to Qualcomm (11.7 percent). Ten stocks had losses for the week from GSK (-0.1 percent) to Ericsson (-5.3 percent).
All three R&D Index categories rose in value last week with all five members of the automotive category (GM, Ford, Daimler, Honda and Toyota) increasing in value. Interestingly, the U.S. Environmental Protection Agency (EPA) issued a report last week stating that automakers can draw on a number of existing technologies to meet the mandated fleet fuel economy regulations by 2025 of 54.5 miles per gallon. Current technological trends reveal that automakers may fall short of that regulation by 2 to 4 miles per gallon. Current low-fuel costs are driving consumers to purchase larger cars, trucks and SUVs, thereby failing to meet current mileage plans.
The report, highly anticipated by automakers as providing some relief, stated that the Administration’s fuel economy program can continue to “incentivize innovation and reduce fuel consumption” and should remain as is. According to the report, the technologies exist for meeting the anticipated fuel-economy requirements and at a lower development and production cost to automakers than was originally anticipated.
Some of the development technologies being considered for lower fuel consumption for future car and light truck designs include higher efficiency transmissions, advanced-engine camshaft phasing, advanced-transmission shifting logic, additional weigh reductions, transitions from single-overhead engine valve (OHV) assemblies to advanced double overhead valve (DOHV) assemblies, advanced tire designs and reduction in engine friction systems, among others.
Last week’s EPA report said that the EPA and the National Highway Traffic Safety Administration (NHSTA) plan to conduct a comprehensive mid-term evaluation of the 2025 CAFE (Corporate Average Fuel Economy) standards by no later than April 2018. The agencies plan to assess current fuel-efficient vehicle technologies with up-to-date information as part of this mid-term evaluation.
The head of the NHSTA, Mark Rosekind, also commented on Friday that his agency is eager to get self-driving technologies to the marketplace as quickly as possible. His agency’s concern is to reduce traffic fatalities. Most major automakers are working on these technologies, along with Alphabet Inc. (Google) to reduce human-induced driving errors. Tesla came under scrutiny within the past month from an auto-pilot induced fatality, which is being investigated by the NHSTA.
| Ticker | Exchange | 2015 R&D billions$ | 07/15/16 | 07/22/16 | 7/22/16 to 7/15/16 | 7/22/16 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 53.70 | 56.57 | 5.34% | 1.98% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 35.07 | 34.66 | -1.17% | 0.61% |
| 3 | Roche Holdings | RHHBY | OTC | 10,242 | 32.50 | 31.69 | -2.49% | -8.06% |
| 4 | Toyota | TM | NYSE | 9,112 | 108.82 | 109.68 | 0.79% | -10.86% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 123.00 | 125.03 | 1.65% | 21.73% |
| 6 | Novartis | NVS | NYSE | 8,935 | 81.61 | 83.51 | 2.33% | -2.99% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 98.78 | 98.66 | -0.12% | -6.27% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 36.77 | 36.74 | -0.08% | 13.43% |
| 9 | General Motors | GM | NYSE | 7,500 | 30.77 | 32.16 | 4.52% | -5.44% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 59.63 | 58.82 | -1.38% | 11.36% |
| 11 | Ford Motor | F | NYSE | 6,700 | 13.57 | 13.84 | 1.99% | -1.77% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 29.82 | 30.71 | 2.98% | 13.07% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 41.77 | 41.08 | -1.65% | 12.46% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 30.24 | 31.13 | 2.94% | -8.31% |
| 15 | Honda | HMC | NYSE | 5,990 | 26.47 | 26.82 | 1.32% | -16.00% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 76.00 | 75.68 | -0.42% | 10.00% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 54.75 | 61.15 | 11.69% | 22.35% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 41.68 | 42.31 | 1.51% | -0.80% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 80.22 | 81.59 | 1.70% | -3.15% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 43.92 | 43.88 | -0.09% | 8.75% |
| 21 | IBM | IBM | NYSE | 5,247 | 159.78 | 162.07 | 1.43% | 17.80% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 58.39 | 59.51 | 1.92% | -23.61% |
| 23 | Siemens | SIE | XETRA | 4,929 | 94.20 | 94.82 | 0.66% | 5.50% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 93.89 | 92.07 | -1.94% | -20.77% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 7.77 | 7.36 | -5.28% | -23.41% |
| Total | 175,313 | 1513.12 | 1531.54 | 1.22% | 0.66% | |||
| Biopharmaceutical | 700.46 | 702.45 | 0.28% | 1.12% | ||||
| Automotive | 238.02 | 242.01 | 1.68% | -13.87% | ||||
| ICT | 473.67 | 484.90 | 2.37% | 8.61% | ||||
About the R&D Index/Market Pulse
R&D Magazine’s R&D Index is a weekly stock market summary of the top international companies involved in research and development. The top 25 industrial spenders of R&D in 2014 were selected based on the latest listings from Schonfeld & Associates’ June 2015 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (7) and conglomerate (2) organizations who invested a cumulative total of more than $170 billion in R&D in 2014, or approximately 10.8% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2014 Global R&D Funding Forecast. The stock prices used in the R&D Index are tabulated from NASDAQ, NYSE, XETRA and OTC common stock prices (in U.S. dollars) for the companies selected at the close of stock trading business on the Friday preceding the publication of the R&D Index in R&D Magazine’s R&D Daily eNewsletter.
The companies used in the R&D Index include Microsoft, Intel, Roche Holdings, Novartis, Johnson & Johnson, Pfizer, Toyota Motor, General Motors, Merck & Co., Ford Motor, Cisco, Apple Computer, Sanofi SA, Qualcomm, IBM, Astra Zeneca plc, Honda Motor, Daimler, Oracle, GlaxoSmithKline, Siemens, Eli Lilly Co., Ericsson, Bristol-Myers Squibb and Bayer AG. Stock prices are based on those stocks traded on the U.S. exchanges. R&D Index trends (in the stock prices) are just one indicator of the amount of capital available to these high-technology companies to invest in R&D and should not be implied to indicate the absolute value of R&D investments made by these organizations. The companies chosen for the R&D Index have very large sophisticated internal and global R&D organizations with each company investing between $4.3 and $11.7 billion annually on their R&D efforts.
