The R&D Index: Market Watch for the week ending March 3, 2017 closed at 1,647.16 for the 25 companies in the R&D Index. The Index was up 0.83% (or 13.54 basis points) over the week ending February 24, 2017. Sixteen R&D Index companies gained value last week from 0.64% (Merck & Co.) to 5.95% (Roche). Nine R&D Index companies lost value last week from -0.09% (Cisco) to -1.76% (Novartis).
Fed Chief Janet Yellen again confirmed last week her intent to raise short-term interest rates this month, as long as inflation and employment data continue to meet the Fed’s expectations. The next Fed meeting is March 14-15 and the Fed could likely raise rates from the current 0.75% to 1.00%. The Fed has other meetings in June, September and December when Economic Projections are made and when they could raise rates again to 1.25% and then 1.50% by the end of the year. Reinforcing the Fed’s plans was the Dept. of Labor’s recent announcement that unemployment filings fell to near a 44-year low for the week ending February 25—down 19,000 to a seasonally adjusted 223,000. The current unemployment rate is 4.8% This was the 104th week that claims have remained below 300,000—the longest stretch since 1970.
According to economists, the Fed’s increased interest rates have multiple benefits including holding inflation in check, increasing lending levels, strengthening the dollar, increasing home buying from tentative individuals, raising returns for those saving money and returning stock trading to more traditional fundamentals (instead of the knee-jerk reactions to economic announcements).
China’s National Development and Reform Commission (NDRC) stated last week that it would reduce steel production by 50 million metric tons, or 3%, this year to reduce air and water pollution in the country. The NDRC also mentioned that aluminum production would be reduced by 5% and that coal production would be cut by at least 150 million tons this year. China had also announced earlier that it was cutting coal imports from North Korea as well.
On Friday, Japan announced that core consumer prices (inflation) rose in January for the first time in more than a year, increasing by 0.1% from last year. Petroleum costs was considered the primary factor, increasing by 9.2% compared to just 0.5% in December. Japanese economists expect their country’s inflation rate to exceed 1.0% within a year, riding the U.S.’s economic boom and a weaker yen. Just last year, Japanese economists had been stating that their economy was likely to see a deflationary spiral.
| R&D Index Week Ending March 3, 2017 | ||||||||
| Ticker | Exchange | 2015 R&D billions$ | 02/24/17 | 03/03/17 | 3/3/17 to 2/24/17 | 3/3/17 to 1/1/16 | ||
| Microsoft | MSFT | NASDAQ | 12,448 | 64.62 | 64.25 | -0.57% | 15.81% | |
| Intel | INTC | NASDAQ | 12,128 | 36.53 | 35.90 | -1.72% | 4.21% | |
| Roche Pharm | RHHBY | OTC | 10,242 | 30.60 | 32.42 | 5.95% | -5.95% | |
| Toyota | TM | NYSE | 9,112 | 113.77 | 113.34 | -0.38% | -7.88% | |
| Johnson & Johnson | JNJ | NYSE | 9,046 | 122.73 | 123.79 | 0.86% | 20.51% | |
| Novartis | NVS | NYSE | 8,935 | 77.28 | 75.92 | -1.76% | -11.82% | |
| Apple | AAPL | NASDAQ | 8,397 | 136.66 | 139.78 | 2.28% | 32.80% | |
| Pfizer | PFE | NYSE | 7,690 | 34.26 | 34.52 | 0.76% | 6.58% | |
| General Motors | GM | NYSE | 7,500 | 36.90 | 38.23 | 3.60% | 12.41% | |
| Merck & Co. | MRK | NYSE | 6,704 | 66.16 | 66.58 | 0.64% | 26.05% | |
| Ford Motor | F | NYSE | 6,700 | 12.47 | 12.65 | 1.44% | -10.22% | |
| Cisco | CSCO | NASDAQ | 6,411 | 34.32 | 34.29 | -0.09% | 26.25% | |
| Oracle | ORCL | NYSE | 6,042 | 43.17 | 42.69 | -1.11% | 16.86% | |
| Astra Zeneca PLC | AZN | NYSE | 5,997 | 29.35 | 29.92 | 1.94% | -11.87% | |
| Honda | HMC | NYSE | 5,990 | 31.45 | 31.15 | -0.95% | -2.44% | |
| Bristol-Myers Squibb | BMY | NYSE | 5,920 | 56.44 | 57.26 | 1.45% | -16.77% | |
| Qualcomm | QCOM | NASDAQ | 5,833 | 57.22 | 56.44 | -1.56% | 12.92% | |
| Sanofi SA | SNY | NYSE | 5,519 | 42.70 | 44.24 | 3.61% | 3.73% | |
| Eli Lilly Co | LLY | NYSE | 5,331 | 82.87 | 83.78 | 1.10% | -0.55% | |
| GlaxoSmithKline | GSK | NYSE | 5,250 | 41.56 | 41.99 | 1.04% | 4.06% | |
| IBM | IBM | NYSE | 5,247 | 181.35 | 180.05 | -0.71% | 30.87% | |
| Daimler | DDAIY | OTC | 5,169 | 68.76 | 69.97 | 1.76% | -10.18% | |
| Siemens | SIE | XETRA | 4,929 | 121.75 | 124.75 | 2.46% | 38.80% | |
| Bayer AG | BAYN | XETRA | 4,649 | 104.25 | 106.65 | 2.30% | -8.22% | |
| Ericsson | ERIC | NASDAQ | 4,124 | 6.45 | 6.60 | 2.33% | -31.32% | |
| Total | 175,313 | 1633.62 | 1647.16 | 0.83% | 8.25% | |||
| Biopharmaceutical | 688.20 | 697.07 | 1.29% | 0.34% | ||||
| Automotive | 263.35 | 265.34 | 0.76% | -5.56% | ||||
| ICT | 553.87 | 553.40 | -0.08% | 23.96% |
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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.
