The R&D Index: Market Watch for the week ending Dec. 2, 2016 closed at 1,478.72 for the 25 companies in the R&D Index. The Index was down 1.85 percent (or 27.87 basis points) over the week ending Nov. 25, 2016. Only three companies gained value last week, Sanofi (+0.48 percent), Ford (+1.66 percent) and General Motors (3.39 percent). Twenty-two companies lost value from -0.14 percent (Honda) to -4.46 percent (Astra Zeneca).
The Department of Labor announced on Friday that the U.S. added a seasonally adjusted 178,000 jobs in November and the unemployment rate dropped to 4.6 percent, the lowest level since August 2007. These figures are deceptive, however, in that they continue to include people who have given up trying to get a job and have left the workforce. Job creation is also heavily weighted in the professional and business services sector, while the manufacturing sector continues to lose jobs.
The OPEC nations also agreed on Wednesday in Vienna, Austria, to cut their production by about 1 percent, which was greater than analysts expected. Non-OPEC oil producers, such as Russia, were also expected to follow the OPEC lead and cut their production as well. As a result of these decisions, oil prices surged more than 10 percent following the agreement.
British Prime Minister Theresa May pledged more investment in science and technology last week at the Confederation of British Industry conference. She insisted that the benefits of private enterprise must be more evenly spread around the country. She warned those attending the conference that business has been undermined by a limited few who have damaged the regulation of many and noted that things had to change.
Indonesia announced last week that R&D Index member Apple has plans to open a new R&D center in Jakarta in 2017. The project is said to be in its final design and regulatory stages and construction is expected to begin in late December. Apple has R&D centers in Germany (a secret project Titan R&D lab that is focusing on software for self-driving cars and possibly Apple’s own iCar vehicle), France, Japan and China. A second Apple R&D center is planned to open in 2017. The focus of the Jakarta R&D center has not been announced.
Stimulus efforts by Chinese regulators also appeared to be working as Chinese factory output rose to 51.7 in November, compared to October’s 51.2. The factory output index has now remained above 50—which is the break point for manufacturing growth and decline—for four consecutive months. Chinese real estate sales also increased in November.
|Ticker||Exchange||2015 R&D billions$||11/25/16||12/02/16||12/2/16 to 11/25/16||12/2/16 to 1/1/16|
|5||Johnson & Johnson||JNJ||NYSE||9,046||114.13||111.96||-1.90%||9.00%|
|10||Merck & Co.||MRK||NYSE||6,704||62.21||61.13||-1.74%||15.73%|
|14||Astra Zeneca PLC||AZN||NYSE||5,997||27.10||25.89||-4.46%||-23.74%|
|19||Eli Lilly Co||LLY||NYSE||5,331||69.12||67.71||-2.04%||-19.62%|
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.