The R&D Index: Market Watch for the week ending Dec. 30, 2016 closed at 1,546.12 for the 25 companies in the R&D Index. The Index was down -0.60 percent (or 9.26 basis points) over the week ending Dec. 16, 2016. Eighteen R&D Index companies lost value last week from -0.08 percent (GlaxoSmithKline) to -5.72 percent (Merck & Co.). Seven R&D Index companies gained value last week from 0.14 percent (Daimler) to 4.93 percent (Sanofi SA).
It should be noted that 12 of the 25 R&D Index companies ended 2016 with stock valuations higher by an average of 12.6 percent than they started at in January 2016. The largest gainer was Qualcomm (30.4 percent) and the smallest was Pfizer (0.3 percent). All seven of the ICT members increased their values, while only three life science and one automotive members (GM) saw increased valuations. The 13 R&D Index members with decreased valuations during 2016 saw their stocks decline by an average of 13.8 percent from -4.6 percent (GlaxoSmithKline) to -39.3 percent (Ericsson).
The post-election stock rally seemed to have waned slightly last week with investors selling stocks and investing in bonds, with 10-year government treasuries and even 10-year German bond yields falling. The DJIA also had its first losing week since the November U.S. elections. The value of the U.S. dollar against foreign currencies also fell slightly last week. Analysts predict that economic indicators will vacillate over the next several months as Trump programs like infrastructure, corporate tax-reform, banking deregulation and healthcare are considered and how fast and how completely they can be implemented.
The big news in stock events last week was the announcement by Japan’s Toshiba that it was likely to lose billions of dollars from its takeover of nuclear construction business CB&I Stone & Webster in late-2015. Toshiba admitted that the cost of the U.S. nuclear projects it purchased will far surpass the original estimates and it also overestimated the value of CB&I. Toshiba stock fell 42 percent last week and wiped out more than $6 billion in market value. Toshiba purchased Westinghouse Electric Corp.’s nuclear business in 2006 for more than $5 billion and hoped to build upon it with the CB&I purchase.
R&D Magazine released its 2017 Global R&D Funding Forecast on Jan. 1, 2017 stating that global R&D will surpass $2.0 trillion in 2017, a 3.4 percent increase over what was spent in 2016. As in previous years, the R&D growth is being driven by R&D investments in Asia, which now accounts for 42.9 percent of all global R&D spending. The U.S. continues as the world’s largest R&D investor with $527.5 billion expected to be spent in 2017. China also continues to gain on the U.S. with $430 billion expected to be spent on R&D in 2017, an increase of 7.1 percent.
| Ticker | Exchange | 2015 R&D billions$ | 12/16/16 | 12/30/16 | 12/16/16 to 12/30/16 | 12/30/16 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 62.30 | 62.14 | -0.26% | 12.00% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 36.31 | 36.27 | -0.11% | 5.28% |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 28.37 | 28.53 | 0.56% | -17.23% |
| 4 | Toyota | TM | NYSE | 9,112 | 121.00 | 117.20 | -3.14% | -4.75% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 115.88 | 115.21 | -0.58% | 12.16% |
| 6 | Novartis | NVS | NYSE | 8,935 | 71.78 | 72.84 | 1.48% | -15.38% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 115.97 | 115.82 | -0.13% | 10.03% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 32.84 | 32.48 | -1.10% | 0.28% |
| 9 | General Motors | GM | NYSE | 7,500 | 36.37 | 34.84 | -4.21% | 2.44% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 62.44 | 58.87 | -5.72% | 11.45% |
| 11 | Ford Motor | F | NYSE | 6,700 | 12.63 | 12.13 | -3.96% | -13.91% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 30.58 | 30.22 | -1.18% | 11.27% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 39.10 | 38.45 | -1.66% | 5.26% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 27.86 | 27.32 | -1.94% | -19.53% |
| 15 | Honda | HMC | NYSE | 5,990 | 30.13 | 29.19 | -3.12% | -8.58% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 58.62 | 58.44 | -0.31% | -15.06% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 66.46 | 65.20 | -1.90% | 30.45% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 38.54 | 40.44 | 4.93% | -5.18% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 73.31 | 73.55 | 0.33% | -12.69% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 38.54 | 38.51 | -0.08% | -4.56% |
| 21 | IBM | IBM | NYSE | 5,247 | 166.73 | 165.99 | -0.44% | 20.65% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 70.62 | 70.72 | 0.14% | -9.22% |
| 23 | Siemens | SIE | XETRA | 4,929 | 115.50 | 116.80 | 1.13% | 29.95% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 97.57 | 99.13 | 1.60% | -14.69% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 5.93 | 5.83 | -1.69% | -39.33% |
| Total | 175,313 | 1555.38 | 1546.12 | -0.60% | 1.61% | |||
| Biopharmaceutical | 645.75 | 645.32 | -0.07% | -7.10% | ||||
| Automotive | 270.75 | 264.08 | -0.99% | -6.01% | ||||
| ICT | 517.45 | 514.09 | -0.65% | 15.15% | ||||
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 percent 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.
