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.
