The R&D Index: Market Watch for the week ending Nov. 18, 2016 closed at 1,505.84 for the 25 companies in the R&D Index. The Index was down 0.91 percent (or 13.9 basis points) over the week ending Nov. 11, 2016. Ten companies gained value last week from 0.64 percent (Qualcomm) to 2.25 percent (Microsoft). Fifteen companies lost value last week from -0.55 percent (IBM) to -4.23 percent (Ford). Ford’s loss was mostly due to their plans to move some car production to Mexico and Trump’s issues with U.S. industries moving production out of the U.S. As a conciliation, Ford’s CEO announced it was reversing its plans to relocate production from Kentucky to Mexico in a conversation with Trump on Thursday.
In Congressional testimony on Thursday, Federal Reserve Chair Janet Yellen confirmed the stock market’s view of the U.S. economy (hitting all-time highs) and that the economy is strong enough for an interest rate hike. Yellen stated that the interest rate could be put in place when more positive data is released such as an improving housing market, rising consumer prices and a more robust labor market. Her comments imply that the Fed is likely to increase short-term interest rates at its last 2016 meeting on Dec. 13-14.
The dollar closed for the 10th consecutive day on Friday moving closer to parity with the Euro ($1.0591 to 1 Euro) since the Euro was conceived in 1999. The dollar also moved higher against the yen, which fell to its lowest level against the dollar since May 30. The dollar’s gains were even higher against the currencies of emerging economies, which will make their debt loads even more oppressive when paid in dollars. The dollar’s gains have been driven by Trump’s proposed fiscal spending cuts, his proposed tax cuts and the Fed’s proposed interest rate increase.
Representatives at the U.N.’s Marrakech Climate Change Conference 2016, which ended last Friday, Nov. 18, struggled to define how to move forward as the U.S. is expected to retreat from a leadership role in light of Trump’s election promise to cancel the U.S.’s commitment to cut carbon emissions. Other countries have stated that they would continue to honor their own pledges and hoped the U.S. would do the same. China’s negotiator also stated that they would press ahead with their commitment. Trump has stated that climate change is a hoax created by the Chinese.
R&D Index member Cisco announced last week that its third quarter net income dropped 4.4 percent to $2.32 billion and forecast a sales drop of 2 percent to 4 percent in the fourth quarter due to soft demand from communications service providers. As noted, Cisco’s stock dropped 3.76 percent last week.
| Ticker | Exchange | 2015 R&D billions$ | 11/11/16 | 11/18/16 | 11/18/16 to 11/11/16 | 11/18/16 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 59.02 | 60.35 | 2.25% | 8.78% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 34.61 | 34.95 | 0.98% | 1.45% |
| 3 | Roche Holdings | RHHBY | OTC | 10,242 | 29.61 | 28.67 | -3.17% | -16.83% |
| 4 | Toyota | TM | NYSE | 9,112 | 111.95 | 114.04 | 1.87% | -7.31% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 118.47 | 115.36 | -2.63% | 12.31% |
| 6 | Novartis | NVS | NYSE | 8,935 | 73.49 | 70.64 | -3.88% | -17.94% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 108.43 | 110.06 | 1.50% | 4.56% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 32.59 | 31.48 | -3.41% | -2.81% |
| 9 | General Motors | GM | NYSE | 7,500 | 34.02 | 33.00 | -3.00% | -2.97% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 63.95 | 61.87 | -3.25% | 17.13% |
| 11 | Ford Motor | F | NYSE | 6,700 | 12.28 | 11.76 | -4.23% | -16.54% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 31.36 | 30.18 | -3.76% | 11.12% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 39.45 | 39.86 | 1.04% | 9.12% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 27.98 | 27.12 | -3.07% | -20.12% |
| 15 | Honda | HMC | NYSE | 5,990 | 28.25 | 28.71 | 1.63% | -10.08% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 56.37 | 56.76 | 0.69% | -17.50% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 66.88 | 67.31 | 0.64% | 34.67% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 41.04 | 40.03 | -2.46% | -6.14% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 77.67 | 76.67 | -1.29% | -8.99% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 39.19 | 38.11 | -2.76% | -5.55% |
| 21 | IBM | IBM | NYSE | 5,247 | 161.27 | 160.39 | -0.55% | 16.58% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 64.77 | 65.26 | 0.76% | -16.23% |
| 23 | Siemens | SIE | XETRA | 4,929 | 108.15 | 106.65 | -1.39% | 18.66% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 93.90 | 91.46 | -2.60% | -21.29% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 5.04 | 5.15 | 2.18% | -46.41% |
| Total | 175,313 | 1519.74 | 1505.84 | -0.91% | -1.03% | |||
| Biopharmaceutical | 654.26 | 638.17 | -2.46% | -8.13% | ||||
| Automotive | 252.27 | 252.77 | 0.20% | -10.04% | ||||
| ICT | 501.02 | 503.10 | 0.42% | 12.69% | ||||
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.
