The R&D Index: Market Watch for the Holiday-shortened week ending January 20, 2017 closed at 1,558.39 for the 25 companies in the R&D Index. The Index was down -0.84% (or 13.22 basis points) over the week ending January 13, 2017. Ten R&D Index companies gained value last week from 0.06% (Microsoft) to 1.98% (IBM). Fifteen R&D Index companies lost value last week from -0.39% (Johnson and Johnson) and to -12.43% (Bristol-Myers Squibb, which has now lost 17.9% over the past two weeks).
Bristol-Myers Squibb stock has been declining since last summer when it was about $75 to its current $49.23. Much of its losses are attributed to its cancer drugs Opdivo and Yervoy, which are not performing as well as they were expected. They were being prescribed as a combination approach and now are no longer being pursued in that manner.
R&D Index member IBM last week announced its 19th consecutive quarter of falling revenues. Fourth quarter revenue slid 1% from the previous year to $21.8 billion. Net profit rose 1% to $4.6 billion. The company is attempting to rid itself of old line systems with newer businesses, such as cloud computing. The new businesses now account for more than 40% of total revenues. IBM spent $4.9 billion on R&D in 2016 and is expected to spend $4.6 billion in 2017, a 6% decline. IBM’s stock, however, at $170, is currently about 24% higher than it was a year ago.
Samsung is expected to release a report on Monday identifying the causes of the battery failures and ignition in its Galaxy Note 7 smartphones last year, which ultimately resulted in a recall of 2.5 million products. The failures were traced by an independent QC team to irregular sized batteries which caused overheating and other manufacturing problems.
The dollar fell to its lowest level in a month, following comments on Monday by then President-elect Trump that he favored a weaker dollar. The dollar fell 1.3% on Tuesday and recovered slightly during the week. The WSJ dollar index closed on Friday at 91.57, down -1.47% YTD. The DJIA opened the year near 19,750 and came within pennies of broaching the 20,000 threshold, but retreated to close Friday at 19,827.
R&D Index member General Motors announced last week that it will invest at least $1 billion and hire more than 1,000 new employees in U.S. factories, in the wake of Trump’s criticism of its continued stance on manufacturing some vehicles in Mexico. GM did not specify which factories would be affected, but did state that these actions had been in the planning stages for “some period of time.” GM invested $7.5 billion in R&D in 2016 and was expected to maintain that level in 2017.
| R&D Index Week Ending January 20, 2017 |
| Ticker | Exchange | 2015 R&D billions$ | 01/13/17 | 01/20/17 | 1/20/17 to 1/13/17 | 1/20/17 to 1/1/16 | |||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 62.70 | 62.74 | 0.06% | 13.09% | |
| 2 | Intel | INTC | NASDAQ | 12,128 | 36.79 | 36.94 | 0.41% | 7.23% | |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 29.62 | 29.19 | -1.45% | -15.32% | |
| 4 | Toyota | TM | NYSE | 9,112 | 119.81 | 118.92 | -0.74% | -3.35% | |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 114.60 | 114.15 | -0.39% | 11.13% | |
| 6 | Novartis | NVS | NYSE | 8,935 | 72.40 | 70.65 | -2.42% | -17.93% | |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 119.04 | 120.00 | 0.81% | 14.00% | |
| 8 | Pfizer | PFE | NYSE | 7,690 | 32.52 | 31.77 | -2.31% | -1.91% | |
| 9 | General Motors | GM | NYSE | 7,500 | 37.34 | 37.01 | -0.88% | 8.82% | |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 62.34 | 62.53 | 0.30% | 18.38% | |
| 11 | Ford Motor | F | NYSE | 6,700 | 12.63 | 12.36 | -2.14% | -12.28% | |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 30.07 | 30.10 | 0.10% | 10.82% | |
| 13 | Oracle | ORCL | NYSE | 6,042 | 39.26 | 39.87 | 1.55% | 9.14% | |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 28.58 | 27.07 | -5.28% | -20.27% | |
| 15 | Honda | HMC | NYSE | 5,990 | 30.08 | 30.44 | 1.20% | -4.67% | |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 56.22 | 49.23 | -12.43% | -28.44% | |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 66.88 | 62.88 | -5.98% | 25.81% | |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 41.47 | 40.35 | -2.70% | -5.39% | |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 77.40 | 76.81 | -0.76% | -8.82% | |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 39.22 | 38.72 | -1.27% | 4.04% | |
| 21 | IBM | IBM | NYSE | 5,247 | 167.34 | 170.65 | 1.98% | 24.04% | |
| 22 | Daimler | DDAIY | OTC | 5,169 | 71.33 | 70.64 | -0.97% | -9.32% | |
| 23 | Siemens | SIE | XETRA | 4,929 | 116.40 | 117.00 | 0.52% | 30.17% | |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 101.65 | 102.50 | 0.84% | -11.79% | |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 5.92 | 5.87 | -0.84% | -38.92% | |
| Total | 175,313 | 1571.61 | 1558.39 | -0.84% | 2.42% | ||||
| Biopharmaceutical | 656.02 | 642.97 | -1.99% | -7.44% | |||||
| Automotive | 271.19 | 269.37 | -0.67% | -4.13% | |||||
| ICT | 522.08 | 523.18 | 0.21% | 17.19% | |||||
About the R&D Index
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 2015 were selected based on the latest listings from Schonfeld & Associates’ June 2016 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 $175 billion in R&D in 2015, or approximately 11% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2016 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 $4.1 and $12.4 billion annually on their R&D efforts.
