Market Watch for the week ending May 26, 2017 closed at 1,636.91 for the 25 companies in the R&D Index. The Index was up 0.02% (or 0.39 basis points) over the week ending May 19, 2017. Eleven R&D Market Pulse Index companies gained value last week from 0.26% (Novartis) to 6.07% (Ericsson). Fourteen Index companies lost value last week, from -0.06% (Johnson & Johnson) to -3.59% (Daimler).
The U.S. Dept. of Commerce (DOC) stated Friday that the U.S. gross domestic product (GDP) rose at an inflation- and seasonally adjusted annual rate of 1.2% for 1Q, up from their previous estimate of 0.7%, with the pace picking up in 2Q. Forecasting firm, Macroeconomic Advisors, in fact, on Friday stated that the U.S. GDP would expand at an annual rate of 3.3% in 2Q. Consumer spending, which accounts for two-thirds of the U.S.’s economic output, also rose at a 0.6% annual rate, up from an earlier estimate of 0.3%. Business investment, exports, and consumer spending were all up from previous estimates. Imports and the change in private inventories were down from previous estimates.
On Wednesday, Moody’s Investors cut China’s credit rating to A1 from Aa3, citing deterioration of the country’s financial strength in coming years as its debt keeps rising and its economy slows. Moody’s, however, did change the outlook for China to stable from negative. China’s total debt reached 253% of GDP in 2016, up from 213% in 2013 and 149% in 2008. China criticized the U.S.-based Moody’s for discriminating against developing countries and noted that Moody’s rating methods are flawed and their reputation questioned.
The number of new drugs approved by the U.S. Food and Drug Administration (FDA) in 2017 has rebounded from their six-year low point in 2016, according to a recent analysis by Thomson Reuters. Twenty-one new drugs have been approved by the FDA already in 2017, compared to just 22 for all of 2016. The European Medicines Agency (EMA) has recommended 42 so far in 2017, compared with 81 for all of 2016 – the EMA includes generics, which the FDA approval do not include. There also are a number of drugs awaiting approval this year from Index members Roche, Sanofi, Astra Zeneca, Novartis and GlaxoSmithKline which are expected to generate sales in the multi-billion dollar blockbuster regimes.
The Fed’s notes on their May 2-3 policy meeting, which were released last week suggest that the central bank is still on track to raise short-term interest rates at their June 13-14 regularly scheduled meeting (with appropriate cautionary caveats). This would leave four Fed meetings (July, September, October/November and December) in which to announce a third rate increase for 2017. There has been no talk of any rate increases scheduled for 2018.
| R&D Index Week Ending May 26, 2017 |
| Ticker | Exchange | 2015 R&D billions$ | 05/19/17 | 05/26/17 | 5/26/17 to 5/19/17 | 5/26/17 to 1/1/16 | |
| Microsoft | MSFT | NASDAQ | 12,448 | 67.69 | 69.97 | 3.37% | 26.12% |
| Intel | INTC | NASDAQ | 12,128 | 35.40 | 36.26 | 2.43% | 5.25% |
| Roche Pharm | RHHBY | OTC | 10,242 | 34.30 | 33.96 | -0.99% | -1.48% |
| Toyota | TM | NYSE | 9,112 | 107.56 | 107.10 | -0.43% | -12.96% |
| Johnson & Johnson | JNJ | NYSE | 9,046 | 127.00 | 126.92 | -0.06% | 23.56% |
| Novartis | NVS | NYSE | 8,935 | 80.42 | 80.63 | 0.26% | -6.33% |
| Apple | AAPL | NASDAQ | 8,397 | 152.96 | 153.61 | 0.42% | 45.93% |
| Pfizer | PFE | NYSE | 7,690 | 32.46 | 32.41 | -0.15% | 0.06% |
| General Motors | GM | NYSE | 7,500 | 32.72 | 33.07 | 1.07% | -2.76% |
| Merck & Co. | MRK | NYSE | 6,704 | 63.78 | 64.92 | 1.79% | 22.91% |
| Ford Motor | F | NYSE | 6,700 | 10.87 | 10.93 | 0.55% | -22.43% |
| Cisco | CSCO | NASDAQ | 6,411 | 31.21 | 31.50 | 0.93% | 15.98% |
| Oracle | ORCL | NYSE | 6,042 | 44.31 | 45.26 | 2.14% | 23.90% |
| Astra Zeneca PLC | AZN | NYSE | 5,997 | 33.90 | 33.85 | -0.15% | -0.30% |
| Honda | HMC | NYSE | 5,990 | 27.68 | 27.63 | -0.18% | -13.47% |
| Bristol-Myers Squibb | BMY | NYSE | 5,920 | 54.02 | 53.97 | -0.09% | -21.56% |
| Qualcomm | QCOM | NASDAQ | 5,833 | 57.67 | 57.52 | -0.26% | 15.09% |
| Sanofi SA | SNY | NYSE | 5,519 | 49.31 | 49.00 | -0.63% | 14.89% |
| Eli Lilly Co | LLY | NYSE | 5,331 | 77.80 | 78.05 | -0.32% | -7.35% |
| GlaxoSmithKline | GSK | NYSE | 5,250 | 43.60 | 42.67 | -2.13% | 5.75% |
| IBM | IBM | NYSE | 5,247 | 151.98 | 152.49 | 0.34% | 10.84% |
| Daimler | DDAIY | OTC | 5,169 | 67.89 | 65.45 | -3.59% | -17.27% |
| Siemens | SIE | XETRA | 4,929 | 128.15 | 125.90 | -1.76% | 40.08% |
| Bayer AG | BAYN | XETRA | 4,649 | 116.95 | 116.55 | -0.34% | 0.30% |
| Ericsson | ERIC | NASDAQ | 4,124 | 6.59 | 6.99 | 6.07% | -27.26% |
| Total | 175,313 | 1636.22 | 1636.61 | 0.02% | 7.56% | ||
| Biopharmaceutical | 713.54 | 712.93 | -0.09% | 2.63% | |||
| Automotive | 246.72 | 244.18 | -1.03% | -13.09% | |||
| ICT | 541.22 | 546.61 | 1.00% | 22.44% | |||
About the R&D Market Pulse Index
The R&D Market Pulse 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 Market Pulse Index R&D Magazine’s daily eNewsletter.
The companies used in the 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.
