The R&D Index: Market Watch for the holiday-shortened week ending June 2, 2017 closed at 1,669.28 for the 25 companies in the R&D Index. The Index was up 2.00% (or 32.67 basis points) over the week ending May 26, 2017. Twenty-four R&D Index companies gained value last week from 0.16% (Intel) to 5.87% (Ericsson). Only one R&D Index company lost value last week, IBM (-0.29%).
The unemployment rate for May fell to 4.3%, its lowest level in 16 years, according to the Dept. of Labor’s monthly jobs report announced last Friday. The number of new jobs created in May over April, however, was a seasonally adjusted 138,000. The U.S. economy now has added an average of 121,000 jobs over the past three months, which is about two-thirds of the growth rate recorded in 2016. The Fed targets a higher unemployment rate of 4.7% to 5.0%. It believes that rates below that level negatively affect companies’ ability to hire skilled workers. According to economists, job openings are near an all time high.
R&D Index member GM fell behind R&D Index member Ford in the number of vehicles sold in May. GM sales fell 1.3% in May while Ford sales rose by 2.3% from year-earlier numbers. Toyota’s sales also fell by 0.5%, while Honda’s rose 0.9%. Much of the sales changes were associated with truck sales where GM truck sales have fallen 5.7% in 2017, while Ford truck sales have risen 8.5%. If these trends continue, they could affect the monies available by the companies for 2018 R&D investments.
The Fed continues to indicate that it will raise the short-term interest rate once again at its June 13-14 meeting, but has cautioned that it may not raise rates at its September 19-20 meeting as expected if the administration and the Congress have difficulties in reaching agreement to raise the Federal debt limit in September. The June rate increase would be the fourth rate increase since the Great Recession – Dec 2015, Dec 2016 and March 2017 being the previous 0.25% rate increases to the current 0.75% to 1.00% level.
Most major stock indices hit all-time highs this past week in part due to President Trump’s withdrawal from the Paris Climate Accords on Thursday and the resulting potential financial benefits to corporations. This coming week could also affect the stock market due to a trio of potentially destabilizing events, all occurring on Thursday, June 8—the UK general election, the European Central Bank’s (ECB’s) monetary policy meeting, and former FBI director Comey’s testimony to Congress on Russia’s involvement in the Trump election.
| R&D Index Week Ending June 2, 2017 |
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| Ticker | Exchange | 2015 R&D billions$ | 05/26/17 | 06/02/17 | 6/2/17 to 5/26/17 | 6/2/17 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 69.97 | 71.76 | 2.56% | 29.34% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 36.26 | 36.32 | 0.16% | 5.43% |
| 3 | Roche Pharm | RHHBY | OTC | 10,242 | 33.96 | 34.37 | 1.21% | -0.29% |
| 4 | Toyota | TM | NYSE | 9,112 | 107.10 | 109.37 | 2.12% | -11.11% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 126.92 | 130.08 | 2.49% | 26.64% |
| 6 | Novartis | NVS | NYSE | 8,935 | 80.63 | 82.23 | 1.98% | -4.47% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 153.61 | 155.45 | 1.20% | 47.68% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 32.41 | 32.54 | 0.40% | 0.46% |
| 9 | General Motors | GM | NYSE | 7,500 | 33.07 | 34.45 | 4.17% | 1.29% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 64.92 | 65.47 | 0.85% | 23.95% |
| 11 | Ford Motor | F | NYSE | 6,700 | 10.93 | 11.35 | 3.84% | -19.45% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 31.50 | 31.98 | 1.52% | 17.75% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 45.26 | 45.66 | 0.88% | 24.99% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 33.85 | 35.11 | 3.72% | 3.42% |
| 15 | Honda | HMC | NYSE | 5,990 | 27.63 | 28.69 | 3.84% | -10.15% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 53.97 | 54.97 | 1.85% | -20.10% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 57.52 | 58.58 | 1.84% | 17.21% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 49.00 | 50.01 | 2.08% | 17.26% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 78.05 | 80.13 | 2.66% | -4.88% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 42.67 | 44.37 | 3.98% | 9.96% |
| 21 | IBM | IBM | NYSE | 5,247 | 152.49 | 152.05 | -0.29% | 10.52% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 65.45 | 65.84 | 0.60% | -15.48% |
| 23 | Siemens | SIE | XETRA | 4,929 | 125.90 | 129.50 | 2.86% | 44.08% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 116.55 | 121.60 | 4.33% | 4.65% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 6.99 | 7.40 | 5.87% | -23.00% |
| Total | 175,313 | 1636.61 | 1669.28 | 2.00% | 9.71% | |||
| Biopharmaceutical | 712.93 | 730.88 | 2.52% | 5.21% | ||||
| Automotive | 244.18 | 249.70 | 2.26% | -11.13% | ||||
| ICT | 546.61 | 551.80 | 0.96% | 23.60% | ||||
About the R&D Index
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 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 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 $4.1 and $12.4 billion annually on their R&D efforts.
