The R&D Market Pulse for the holiday-shortened week ending June 9, 2017 closed at 1,645.27 for the 25 companies in the R&D Market Pulse Index. The Index was down -1.44% (or 24.01 basis points) over the week ending June 2, 2017. Only four R&D Index companies gained value last week from 0.71% (Pfizer) to 1.35% (IBM). Twenty-one R&D Index companies lost value last week from -0.08% (Siemens) to -6.87% (Roche Pharm).

Most biopharm and automotive R&D Index stocks slid all week long to close at -1.28% and -1.67% respectively for the week from the previous week’s closing values. The ICT R&D Index stocks were flat for most of the week, but fell dramatically on Friday, along with other related tech stocks, such as Google/Alphabet, Amazon, Advanced Micro Devices (AMD) and Facebook, which all fell more than 3% on Friday. There was no single indicator that drove the sell-off of these particular tech stocks, they all drove each other as one started to fall, they all started to fall following several months of mostly exaggerated growth over the past three months. The tech-heavy Nasdaq took the brunt of this sell-off dropping 2.7% on Friday, while the DJIA closed at a record high, buoyed by banking and energy stocks.

OPEC’s policies to drive U.S. shale oil producers out of business have failed and the current crude oil prices of less than $50/barrel have similarly failed to curtail U.S. shale production. Shale producers have actually increased their productivities, thus lowering their costs. Exports are booming to existing clients such as China which increased their oil imports by nearly 2,400% over 2016 and new clients such as India (1.5 billion barrels imported in 2017), Hong Kong (0.7 billion barrels imported in 2017) and Denmark (0.7 billion barrels imported in 2017).

The Dept. of Labor revised its worker productivity for 1Q to flat (0.0% change) from its previous estimate of a -0.6% annual decline over 2016. This is marginally good news for the economy, however it still reveals a sluggish growth environment.

A report from the World Bank last week revealed their forecast for the fastest growth period in seven years for 2018. The development institution stated that global growth would increase to 2.9% in 2018, up from 2.7% in 2017. The report cautioned that the build-up of China’s internal  debt could jeapardize global growth. Trade-war fears could also affect the economic situation.

The report also warned that while President Trump’s proposed corporate and personal tax cuts could boost near term GDP by nearly 2 percentage points after two years, those cuts would also widen the budget deficit by up to 2.4 percentage points over the same period.

R&D Index Week Ending June 9, 2017

		Ticker	Exchange	2015 R&D billions$	06/02/17	06/09/17	6/9/17 to 6/2/17	6/9/17 to 1/1/16
1	Microsoft	MSFT	NASDAQ	12,448	71.76	70.32	-2.01%	26.75%
2	Intel	INTC	NASDAQ	12,128	36.32	35.71	-1.68%	3.66%
3	Roche Pharm	RHHBY	OTC	10,242	34.37	32.01	-6.87%	-7.14%
4	Toyota	TM	NYSE	9,112	109.37	105.74	-3.32%	-14.06%
5	Johnson & Johnson	JNJ	NYSE	9,046	130.08	131.53	1.11%	28.05%
6	Novartis	NVS	NYSE	8,935	82.23	81.14	-1.33%	-5.74%
7	Apple	AAPL	NASDAQ	8,397	155.45	148.98	-4.16%	41.54%
8	Pfizer	PFE	NYSE	7,690	32.54	32.77	0.71%	1.17%
9	General Motors	GM	NYSE	7,500	34.45	34.34	-0.32%	0.97%
10	Merck & Co.	MRK	NYSE	6,704	65.47	64.39	-1.65%	21.90%
11	Ford Motor	F	NYSE	6,700	11.35	11.13	-1.94%	-21.01%
12	Cisco	CSCO	NASDAQ	6,411	31.98	31.37	-1.91%	15.50%
13	Oracle	ORCL	NYSE	6,042	45.66	45.03	-1.38%	23.27%
14	Astra Zeneca PLC	AZN	NYSE	5,997	35.11	34.17	-2.68%	0.65%
15	Honda	HMC	NYSE	5,990	28.69	27.94	-2.61%	-12.50%
16	Bristol-Myers Squibb	BMY	NYSE	5,920	54.97	53.75	-2.22%	-21.88%
17	Qualcomm	QCOM	NASDAQ	5,833	58.58	57.05	-2.61%	14.15%
18	Sanofi SA	SNY	NYSE	5,519	50.01	48.20	-3.62%	13.01%
19	Eli Lilly Co	LLY	NYSE	5,331	80.13	81.04	1.14%	-3.80%
20	GlaxoSmithKline	GSK	NYSE	5,250	44.37	43.51	-1.94%	7.83%
21	IBM	IBM	NYSE	5,247	152.05	154.10	1.35%	12.01%
22	Daimler	DDAIY	OTC	5,169	65.84	65.46	-0.58%	-15.97%
23	Siemens	SIE	XETRA	4,929	129.50	129.40	-0.08%	43.97%
24	Bayer AG	BAYN	XETRA	4,649	121.60	119.05	-2.10%	2.45%
25	Ericsson	ERIC	NASDAQ	4,124	7.40	7.14	-3.51%	-25.70%
			Total	175,313	1669.28	1645.27	-1.44%	8.13%
			Biopharmaceutical		730.88	721.56	-1.28%	3.87%
			Automotive		249.70	244.61	-2.04%	-12.94%
			ICT		551.80	542.56	-1.67%	21.53%

R&D Magazine’s R&D Index is a weekly stock market summary of the top international companies involved in research and development. 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.