The R&D Index: Market Watch for the week ending Nov. 4, 2016 closed at 1,457.31 for the 25 companies in the R&D Index. The Index was down -2.15 percent (or 32.0 basis points) over the week ending Oct. 28, 2016. Only three companies gained value last week—BMS (+0.02 percent), Oracle (+0.29 percent) and Sanofi (2.83 percent). Twenty-two companies lost value from -0.03 percent (Merck) to -7.08 percent (Honda). Market anxiety over the upcoming U.S. presidential election was noted as being the major influence in market drops last week. The S&P 500 dropped for the ninth day in a row on Friday—its longest losing streak since 1980—losing about 3.1 percent of its value during this time. The current loss is considerably less than other S&P losing streaks over the past 36 years.
At its November meeting last Wednesday, the federal reserve decided to leave interest rates unchanged. They did hint, though, that rates could increase for the first time in a year at their next meeting on Dec. 13-14, 2016. Some investors expect inflation rates to increase—a key for increasing interest rates—but they still remain low. The U.S. Presidential election results and the resulting responses are likely to also have an effect on the fed’s interest rate decision in December.
Automakers reported strong demand for light trucks last Tuesday, buoying their overall sales forecasts, despite cooling demand for other market sectors.
The Dow Chemical-DuPont merger, which was announced last December, was slowed for the second time last week with European Union regulators asking for more information concerning reduced competition in crop protection, seeds and petrochemicals. Regulators have also slowed the merger process for Swiss Syngenta and China National Chemical Corp., which was announced in February 2016. The Sygenta merger is likely to be delayed until early 2017 by EU regulators (it basically has been signed off by U.S. regulators), while the Dow-DuPont merger now could be delayed until mid-2017. The third merger in this industry—the Bayer-Monsanto deal announced in September 2016—will also face tough regulatory scrutiny in the U.S. and EU, especially following the other two deals.
According to analysts last week, the U.S. Dept. of Justice is considering possible criminal charges for price-fixing in the generic drug industry. The companies being investigated include Teva Pharma, Mylan, Dr. Reddy’s Labs, Taro Pharma, Endo Intl., and Actavis (recently sold by Allergan to Teva). Most of these stocks fell dramatically last week on the news of the two-year old investigation by the regulators.
| Ticker | Exchange | 2015 R&D billions$ | 10/28/16 | 11/04/16 | 11/4/2016 to 10/28/16 | 11/4/16 to1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 59.87 | 58.71 | -1.94% | 5.82% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 34.74 | 33.61 | -3.25% | -2.44% |
| 3 | Roche Holdings | RHHBY | OTC | 10,242 | 28.82 | 28.16 | -2.29% | -18.31% |
| 4 | Toyota | TM | NYSE | 9,112 | 114.81 | 110.56 | -3.70% | -10.14% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 115.33 | 115.11 | -0.19% | 12.06% |
| 6 | Novartis | NVS | NYSE | 8,935 | 71.07 | 70.25 | -1.15% | -18.39% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 113.72 | 108.84 | -4.29% | 3.40% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 31.93 | 30.00 | -6.04% | -7.38% |
| 9 | General Motors | GM | NYSE | 7,500 | 31.32 | 31.16 | -0.51% | -8.38% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 58.84 | 58.82 | -0.03% | 11.36% |
| 11 | Ford Motor | F | NYSE | 6,700 | 11.72 | 11.34 | -3.24% | -19.52% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 30.59 | 30.19 | -1.31% | 11.16% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 38.17 | 38.28 | 0.29% | 4.79% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 28.60 | 27.66 | -3.29% | -18.53% |
| 15 | Honda | HMC | NYSE | 5,990 | 29.82 | 27.71 | -7.08% | -13.22% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 51.00 | 51.01 | 0.02% | -25.86% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 68.40 | 66.73 | -2.44% | 33.51% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 38.84 | 39.94 | 2.83% | -6.35% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 74.53 | 72.49 | -2.74% | -13.95% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 40.14 | 38.63 | -3.76% | -4.26% |
| 21 | IBM | IBM | NYSE | 5,247 | 152.61 | 152.43 | -0.12% | 10.79% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 65.34 | 61.85 | -5.34% | -20.60% |
| 23 | Siemens | SIE | XETRA | 4,929 | 103.55 | 101.05 | -2.41% | 12.43% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 90.72 | 87.92 | -3.09% | -24.34% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 4.87 | 4.86 | -0.21% | -49.43% |
| Total | 175,313 | 1489.35 | 1457.31 | -2.15% | -4.22% | |||
| Biopharmaceutical | 629.82 | 619.99 | -1.56% | -10.75% | ||||
| Automotive | 253.01 | 242.62 | -4.11% | -13.65% | ||||
| ICT | 498.10 | 488.76 | -1.88% | 9.48% | ||||
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.
