The R&D Index: Market Watch for the holiday-shortened week ending July 7, 2017 closed at 3,436.78 for the 25 companies in the R&D Index. The Index was up 0.54% (or 18.51 basis points) over the week ending June 30, 2017. Twelve R&D Index companies gained value last week from 0.03% (General Motors) to 3.57% (Volkswagen AG). Thirteen R&D Index companies lost value last week from -0.01% (Eli Lilly Co.) to -2.97% (Bayer AG).
The U.S. added a seasonally adjusted 222,000 jobs in June, according to a report from the U.S. Labor Dept. Additionally, the numbers reported earlier for April and May were revised upwards to about 121,000. The unemployment rate rose to 4.4% in June from 4.3% in May as more people were actively looking for work. The Fed’s summary of its June meeting (when it raised short-term interest rates to 1% to 1.25%), which was released last week, pointed to September as the time when the Fed would start to sell off its holdings in Treasury’s and mortgage bonds. Analysts expect the Fed to allow $6 billion in treasury securities and $4 billion in mortgage bonds to be released per month rising each month to a maximum of $30 billion/month for treasuries and $20 billion for mortgages. The Fed is waiting until September to measure if inflation rates are meeting their expectations.
Volvo announced last week that it plans to phase out conventional engines in its cars with all new models in 2019 being electric or gas-electric hybrids. Volvo is owned by China’s Geely Holding Group. The company stated that five new electric/hybrid models would be introduced between 2019 and 2021 with two of them being produced by Polestar, the high-performance unit that Volvo is spinning off as a separate branded electrified performance global car company.
China’s aging and declining internal oil fields have forced the country to seek out other sources of petroleum. The beneficiary has been U.S. oil producers who have seen their exports to China increase 10-fold since 2016. U.S. crude is now cheaper than that from Middle East producers such as Saudi Arabia, although Saudi Arabia reduced its price to Asian customers last Wednesday to shore up its exports. Driven by this growing demand, U.S. exports are expected to rise to 3 million barrels/day by 2019, up from just 500,000 barrels/day in 2016.
U.S. exports in May, in part due to the oil production, rose to their highest level ($192 billion) in more than two years (April 2015), according to a report by Commerce Dept. last week. The foreign trade gap also narrowed 2.3% from April reflecting an overall improvement in the global economy.
| R&D Index Week Ending July 7, 2017 |
| Ticker | Exchange | 2017 R&D billions$ | 06/30/17 | 07/07/17 | 7/7/17 to 6/30/17 | 7/7/17 to 1/1/17 | ||
| 1 | Amazon | AMZN | NASDAQ | 17,774 | 968.00 | 978.76 | 1.11% | 30.52% |
| 2 | Alphabet/Google | GOOGL | NASDAQ | 15,845 | 929.68 | 940.81 | 1.20% | 18.72% |
| 3 | Microsoft | MSFT | NASDAQ | 13,987 | 68.93 | 69.46 | 0.77% | 11.78% |
| 4 | Intel | INTC | NASDAQ | 13,499 | 33.74 | 33.88 | 0.41% | -6.59% |
| 5 | Apple | AAPL | NASDAQ | 11,506 | 144.02 | 144.15 | 0.09% | 24.46% |
| 6 | Volkswagen AG | VLKAY | OTC | 11,260 | 31.12 | 32.23 | 3.57% | 12.38% |
| 7 | Roche Pharm | RHHBY | OTC | 10,174 | 31.80 | 31.37 | -1.35% | 9.95% |
| 8 | Toyota | TM | NYSE | 9,170 | 105.02 | 108.47 | 3.29% | -7.45% |
| 9 | Johnson & Johnson | JNJ | NYSE | 9,060 | 132.29 | 132.54 | 0.19% | 15.04% |
| 10 | Novartis | NVS | NYSE | 7,870 | 83.47 | 82.32 | -1.38% | 13.01% |
| 11 | General Motors | GM | NYSE | 7,468 | 34.93 | 34.94 | 0.03% | 0.29% |
| 12 | Pfizer | PFE | NYSE | 7,288 | 33.59 | 33.35 | -0.71% | 2.68% |
| 13 | Bristol-Myers Squibb | BMY | NYSE | 6,942 | 55.72 | 55.91 | 0.34% | -4.33% |
| 14 | Cisco | CSCO | NASDAQ | 6,827 | 31.30 | 30.90 | -1.28% | 2.25% |
| 15 | Qualcomm | QCOM | NASDAQ | 6,723 | 55.22 | 55.35 | 0.24% | -15.11% |
| 16 | Oracle | ORCL | NYSE | 6,702 | 50.14 | 49.35 | -1.58% | 28.35% |
| 17 | Honda | HMC | NYSE | 6,519 | 27.39 | 27.26 | -0.47% | -6.61% |
| 18 | Astra Zeneca PLC | AZN | NYSE | 6,363 | 34.09 | 33.75 | -1.00% | 23.54% |
| 19 | Merck & Co. | MRK | NYSE | 5,759 | 64.09 | 63.16 | -1.45% | 7.29% |
| 20 | Daimler | DDAIY | OTC | 5,084 | 63.37 | 63.48 | 0.17% | -10.24% |
| 21 | Bayer AG | BAYN | XETRA | 4,880 | 113.20 | 109.95 | -2.87% | 10.92% |
| 22 | Sanofi SA | SNY | NYSE | 4,755 | 47.91 | 47.90 | -0.02% | 18.45% |
| 23 | IBM | IBM | NYSE | 4,628 | 153.83 | 152.94 | -0.58% | -7.86% |
| 24 | GlaxoSmithKline | GSK | NYSE | 4,508 | 43.12 | 42.26 | -1.99% | 9.74% |
| 25 | Eli Lilly Co | LLY | NYSE | 4,489 | 82.30 | 82.29 | -0.01% | 11.88% |
| Total | 209,080 | 3,418.27 | 3,436.78 | 0.54% | 14.90% | |||
| Biopharmaceutical | 721.58 | 714.80 | -0.94% | 10.77% | ||||
| Automotive | 261.83 | 266.38 | 1.74% | -5.08% | ||||
| ICT | 1,466.86 | 1,476.84 | 0.68% | 13.03% | ||||
