The R&D Index: Market Watch for the week ending Dec. 16, 2016 closed at 1,555.38 for the 25 companies in the R&D Index. The Index was up 1.14 percent (or 19.48 basis points) over the week ending Dec. 9, 2016. Eighteen R&D Index companies gained value last week from 0.13 percent (IBM) to 8.05 percent (Eli Lilly). Seven R&D Index companies lost value last week from -1.61 percent (Toyota) to -4.60 percent (Sanofi SA).
Following months of speculation, the Federal Reserve in its last meeting of the year unanimously voted to raise short-term interest rates a quarter percentage point to between 0.50 percent and 0.75 percent. They also noted that interest rates would rise at a faster pace than previously projected, stating that there could be three additional rate hikes in 2017. They cited a strengthening labor market that’s nearing full employment and inflation moving faster toward its targeted levels as justification for raising rates now and in the future. The Fed’s discussion of future rate hikes depressed the stock market on Wednesday seeing its worst one-day drop in two months, but the market gained back most of its losses on the next trading day (Thursday). The Fed’s chairwoman Janet Yellen stated that she would take a ‘wait and see’ approach before responding to President-elect Trump’s economic agenda.
The Fed’s rate hike also accelerated the U.S. dollar’s rise against 16 major foreign currencies, hitting a 14-year high. The dollar’s increase puts trillions of dollar-based debt around the world more expensive to pay back and shocked a number of global financial markets. The rate hike also caused China to halt trading on some of its government bonds in which yields soared following the Fed rate announcement on Wednesday. Trading on China’s bonds resumed following the injection of $22 billion into the short-term money market by China’s central bank.
R&D Index member Johnson & Johnson acknowledged it was no longer bidding on Swiss pharmaceutical Actelion, while rumors started concerning R&D Index member Sanofi’s interest in acquiring Actelion. Actelion had 2015 sales of $513 million and R&D investments of $122 million. Actelion focuses its research on rare diseases. Analysts stated that Actelion could eventually resist takeover overtures, as it has in the past.
R&D Index member Apple was reported to have held talks about investing in a $100 billion fund being raised by Japan’s SoftBank Group. If realized Apple would have access to the world’s largest technology fund. An investment of up to $1 billion by Apple has been discussed, according to reports, noting an agreement has yet to be reached. SoftBank is one of Japan’s largest mobile phone providers and owns Sprint Corp. SoftBank looks to be a leader in emerging technologies, including Artificial Intelligence and the Internet of Things.
| Ticker | Exchange | 2015 R&D billions$ | 12/09/16 | 12/16/16 | 12/9/16 to 12/16/16 | 12/16/16 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 61.97 | 62.30 | 0.53% | 12.29% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 35.76 | 36.31 | 1.54% | 5.40% |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 27.86 | 28.37 | 1.83% | -17.70% |
| 4 | Toyota | TM | NYSE | 9,112 | 122.98 | 121.00 | -1.61% | -1.66% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 112.26 | 115.88 | 3.22% | 12.81% |
| 6 | Novartis | NVS | NYSE | 8,935 | 69.74 | 71.78 | 2.93% | -16.61% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 113.95 | 115.97 | 1.77% | 10.17% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 31.70 | 32.84 | 3.60% | 1.39% |
| 9 | General Motors | GM | NYSE | 7,500 | 37.66 | 36.37 | -3.43% | 6.94% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 61.23 | 62.44 | 1.98% | 18.21% |
| 11 | Ford Motor | F | NYSE | 6,700 | 13.17 | 12.63 | -4.10% | -10.36% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 30.06 | 30.58 | 1.73% | 12.59% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 40.52 | 39.10 | -3.50% | 7.04% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 27.16 | 27.86 | 2.58% | -17.94% |
| 15 | Honda | HMC | NYSE | 5,990 | 30.63 | 30.13 | -1.63% | -5.64% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 57.04 | 58.62 | 2.77% | -14.80% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 68.52 | 66.46 | -3.01% | 32.97% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 40.40 | 38.54 | -4.60% | -9.64% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 67.85 | 73.31 | 8.05% | -12.97% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 37.79 | 38.54 | 1.98% | -4.49% |
| 21 | IBM | IBM | NYSE | 5,247 | 166.52 | 166.73 | 0.13% | 21.19% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 68.30 | 70.62 | 3.40% | -9.35% |
| 23 | Siemens | SIE | XETRA | 4,929 | 114.70 | 115.50 | 0.70% | 28.50% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 94.54 | 97.57 | 3.20% | -16.03% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 5.59 | 5.93 | 6.08% | -38.29% |
| Total | 175,313 | 1537.90 | 1555.38 | 1.14% | 2.22% | |||
| Biopharmaceutical | 627.57 | 645.75 | 2.90% | -7.04% | ||||
| Automotive | 272.74 | 270.75 | -0.73% | -3.64% | ||||
| ICT | 517.30 | 517.45 | 0.03% | 15.91% | ||||
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.
