The R&D Index: Market Watch for the week ending February 24, 2017 closed at 1,633.62 for the 25 companies in the R&D Index. The Index was up 0.86% (or 13.85 basis points) over the week ending February 17, 2017. Nineteen R&D Index companies gained value last week from 0.10% (Novartis) to 8.22% (Ericsson). Five R&D Index companies lost value last week from -0.51% (Honda) to -2.11% (Bayer AG) – Microsoft was unchanged for the week at 64.32.
For high-tech workers, the improving global economies are resulting in increasingly stressful work environments, according to a recent report in the Wall Street Journal. China’s traditional ‘996’ work schedule—9am to 9pm, six days/week, pioneered by China’s Alibaba Group Holding—is proving to result in worker illnesses, depression and, even in some cases, deaths. China’s laws dictating a 40-hour work week are being circumvented by having employees sign work contracts.
The improving economy also strengthened the U.S. Federal Reserve’s position last week in their latest meeting summaries by stating an increase in short-term interest rates in mid-March is very likely. Fed governor Jerome Powell and Fed Chair Janet Yellen reiterated those comments last week in separate discussions. Yellen is expected to address the Executives Club of Chicago on March 3 and may further explain proposed Fed actions. The Fed expects higher interest rates to hold inflation in rein from the Administration’s proposed tax cuts and new spending plans. The Fed has previously mentioned that it expects to implement three interest rate hikes in 2017 from just one in December 2016 and one in December 2015.
Merger approvals between Dow and DuPont, China National Chemical and Syngenta, and Bayer and Monsanto are continuing in the U.S. and Europe. R&D Index member Bayer announced last week that it was still confident that their Monsanto acquistion could close by the end of 2017 despite some delays and requests for more information from U.S. regulators. Bayer announced a 26% decline in net profit last week from 2016 and their stock fell -2.11% for the week. The Trump administration has tentatively given its approval for the merger following meetings in January with the CEOs stating that new American jobs would be created through the merger.
China’s investment in U.S. tripled to more than $45 billion in 2016 from $15 billion in 2015. Congressional leaders have announced that they will increase their scrutiny of Chinese technology deals in the U.S. including the consideration of economic factors in their assessments. Previous attempts to expand the scope of the Committee on Foreign Investment in the U.S. (CFIUS) have failed, but this year’s Republican strength in Congress and the White House are likely to change that record.
| R&D Index Week Ending February 24, 2017 |
| Ticker | Exchange | 2015 R&D billions$ | 02/17/17 | 02/24/17 | 2/24/17 to 2/17/17 | 2/24/17 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 64.62 | 64.62 | 0.00% | 16.47% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 36.48 | 36.53 | 0.14% | 6.04% |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 30.53 | 30.60 | 0.23% | -11.23% |
| 4 | Toyota | TM | NYSE | 9,112 | 113.70 | 113.77 | 0.06% | -7.53% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 118.86 | 122.73 | 3.26% | 19.48% |
| 6 | Novartis | NVS | NYSE | 8,935 | 77.20 | 77.28 | 0.10% | -10.22% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 135.72 | 136.66 | 0.69% | 29.83% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 33.62 | 34.26 | 1.90% | 5.77% |
| 9 | General Motors | GM | NYSE | 7,500 | 37.22 | 36.90 | -0.86% | 8.50% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 65.39 | 66.16 | 1.18% | 25.26% |
| 11 | Ford Motor | F | NYSE | 6,700 | 12.58 | 12.47 | -0.87% | -11.50% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 33.74 | 34.32 | 1.72% | 26.36% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 42.06 | 43.17 | 2.64% | 18.18% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 29.16 | 29.35 | 0.65% | -13.55% |
| 15 | Honda | HMC | NYSE | 5,990 | 31.61 | 31.45 | -0.51% | -1.50% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 54.59 | 56.44 | 3.39% | -17.97% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 56.46 | 57.22 | 1.35% | 14.49% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 43.16 | 42.70 | -1.07% | 0.12% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 80.39 | 82.87 | 3.08% | -1.63% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 41.34 | 41.56 | 0.53% | 3.00% |
| 21 | IBM | IBM | NYSE | 5,247 | 180.67 | 181.35 | 0.38% | 31.81% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 67.61 | 68.76 | 1.70% | -11.73% |
| 23 | Siemens | SIE | XETRA | 4,929 | 120.60 | 121.75 | 0.95% | 35.46% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 106.50 | 104.25 | -2.11% | -10.28% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 5.96 | 6.45 | 8.22% | -32.88% |
| Total | 175,313 | 1619.77 | 1633.62 | 0.86% | 7.36% | |||
| Biopharmaceutical | 680.74 | 688.20 | 1.10% | -0.93% | ||||
| Automotive | 262.72 | 263.35 | 0.24% | -6.27% | ||||
| ICT | 549.75 | 553.87 | 0.75% | 24.06% | ||||
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.
